In the United States, prior to the release of inflation data in June, there was a fall in the overall pressure on risk assets and the encryption market. At the same time, the market is waiting for Federal Reserve Chairman Kevin Walsh to testify in Congress that the uncertainty about the interest rate path has increased, leading to a general decline in mainstream currencies such as Bitcoin, the Ether and XRP.
Mainstream currency is falling.
CoinDesk data show that bitcoin has fallen by over 2 per cent in the past 24 hours, reporting $62380 near. There has also been a near decline in the Ether, XRP and other major coins.
The market recalculation is at the heart of a rapid upward revision of the Fed's July interest rate hike. According to the Bloomberg compilation data, the money market currently expects an interest rate increase of about 50 per cent this month, compared to about 10 per cent a few days ago.
The interest-rate bet pushes high rates of return on United States debt
The expected changes in interest rates are also rapidly transmitted to the debt market. In the United States,2 annual sovereign debt return rose to 4.29 per cent, a high since the beginning of the year. This deadline is usually the most sensitive to short-term policy expectations and is therefore seen by the market as an important indicator of the Fed ' s path.
This hawk is expected to warm up in connection with rising oil prices and the tense situation in the Middle East. The report mentions that tensions between the United States and Iran have increased, and that the recent marked increase in the price of superheavy crude oil has raised market concerns about a rebound in inflation.
WTI crude oil futures have risen from US$ 67 at the beginning of this month to close to US$ 80 per barrel. Higher energy prices usually raise inflation expectations and reduce the market ' s imagination of interest rates.
Market Focus CPI and Congressional Testimony
The U.S. Department of Labor will publish the Consumer Price Index in June on Tuesday. Economists from the Bloomberg survey predict that the overall CPI annual rate will fall to less than 4 per cent, and both core and aggregate inflation may fall for the first time since January.
However, even if the data meet expectations, the market may still consider them to be lagging behind recent oil price changes. Concerns about the continued tightening of the Fed's policy could rise further if inflation was to be stronger than expected.
The focus of the market will then turn to the testimony of Walsh on the Hill of Congress. Since he has consistently released clear guidelines less early, investors will focus on his presentation of inflation and interest rate prospects.
According to ING analysts, there is still room for Walsh to emphasize the relative moderation of inflation expectations and to opt for a temporary hold. But even if there was an eventual interest rate hike, the market was concerned about whether it would then be redirected to a lower interest rate.