US retail sales and producer prices will draw investor interest on Thursday. A larger-than-expected rise in retail sales could test bets on an H1 2024 Fed rate cut. Upward consumer spending trends fuel demand-driven inflation and may force the Fed to delay rate cuts. A higher-for-longer rate path could impact disposable income and curb consumer spending.

Economists forecast retail sales to increase by 0.7% in February after falling by 0.8% in January.

However, producer price trends may influence bets on an H1 2024 Fed rate cut. Producers increase prices in a tighter demand environment, passing prices onto consumers. Economists expect producer prices to increase by 1.2% year-on-year in February compared with 0.9% in January.

On Friday, the focus will shift to US consumer confidence. A downward trend in consumer confidence may signal a pullback in consumer spending, dampening demand-driven inflation. A softer inflation outlook could allow the Fed to cut interest rates for price stability.

Economists forecast the Michigan Consumer Sentiment Index to fall from 76.9 to 76.6 in March. However, investors must consider the sub-components, including consumer and inflation expectations.

There are no FOMC member speeches to consider. The Fed entered the blackout period on March 9.

Short-term Forecast

Near-term USD/JPY trends will hinge on wage negotiations in Japan. However, inflation numbers from Japan and the US could also impact the timelines for central bank policy moves. Favorable updates on wage negotiations could tilt monetary policy divergence toward the Yen. While the Fed considers interest rate cuts, the BoJ plans to exit negative rates.

USD/JPY Price Action

Daily Chart

The USD/JPY sat below the 50-day EMA while remaining above the 200-day EMA, sending bearish near-term but bullish longer-term price signals.

A USD/JPY return to the 148 handle would support a break above the 148.405 resistance level and 50-day EMA. However, selling pressure could intensify at the 148.405 resistance level. The 50-day EMA is confluent with the resistance level.

GDP, inflation, wage negotiations from Japan and US inflation, retail sales, and consumer confidence need consideration.

However, a break below the 146.649 support level would give the bears a run at the 200-day EMA. A fall through the 200-day EMA would bring the 144.713 support level into play.

The 14-day RSI at 63.73 indicates a USD/JPY break above the 148.405 resistance level and the 50-day EMA before entering overbought territory.

With inflation in focus, investors must track ECB member commentary. ECB Chief Economist Philip Lane is on the calendar to speak on Friday. ECB Executive Board members Piero Cipollone (Mon/Wed), Luis de Guindos (Tues/Thurs), Claudia Buch (Tues), Kerstin af Jocknick (Wed), Frank Elderson (Thurs), Isabel Schnabel (Thurs) will also deliver speeches.

The Pound

On Tuesday, UK labor market data will influence buyer demand for the Pound. Softer-than-expected average earnings and a higher unemployment rate could influence bets on a Bank of England rate cut.

However, the GDP Report for January also needs consideration. A resilient UK economy could enable the BoE to keep rates elevated to ensure a sustainable fall in inflation toward the target.

On Friday, house price figures will draw investor interest. Downward trends in house prices could signal a deteriorating macroeconomic environment.

Beyond the numbers, Bank of England commentary will also move the dial. Monetary Policy Committee member Catherine Mann is on the calendar to speak on Monday and Tuesday. Views on the timeline for interest rate cuts need consideration.

The Loonie

On Friday, housing sector data from Canada could influence buyer demand for the Loonie. A downward trend in housing starts could fuel bets on a Bank of Canada rate cut. The housing sector is a leading economic indicator for developed economies.

Other stats include wholesale sales and foreign securities purchases. The numbers are unlikely to influence BoC monetary policy goals.

However, crude oil inventories and the OPEC Monthly Report could impact near-term USD/CAD trends.

The Australian Dollar

On Monday, Australian building approvals and business confidence figures will influence the buyer appetite for the  Aussie dollar. The housing sector is a focal point for the RBA, with inflation and interest rates impacting households. A deteriorating housing sector could affect consumer confidence and spending.

However, business confidence also needs consideration. A fall in business confidence could signal a pullback in job creation that could impact private consumption.

On Friday, consumer inflation expectation numbers for March warrant investor attention. The RBA left a rate hike on the table in February, citing concerns about household spending. Expectations of an elevated inflation environment may impact consumer spending.

From elsewhere, the PBoC will announce the 1-year MLF on Friday, with housing sector data (Fri) and chatter from Beijing also needing consideration.

Beyond the numbers, investors must consider RBA commentary. RBA Chief Economist Sarah Hunter is on the calendar to speak on Tuesday. Views on inflation, the economic outlook, and the RBA rate path could move the dial.

The Kiwi Dollar

On Tuesday, electronic card retail sales numbers for New Zealand may impact buyer demand for the Kiwi dollar. An unexpected jump in sales could refuel bets on an RBNZ rate hike.

Food inflation figures also need consideration on Wednesday. The numbers will influence the RBNZ interest rate trajectory. In March, the RBNZ stated that inflation risks were more balanced. Softer-than-expected numbers could fuel bets on a 2024 RBNZ rate cut.

On Friday, Business PMI for February will also draw investor interest. However, investors must consider the sub-components, including employment and new orders. A weaker labor market environment could impact consumer spending and dampen demand-driven inflation.

From elsewhere, economic data from China, PBoC moves, and chatter from Beijing also need consideration.

The Japanese Yen

On Monday, finalized Q4 GDP numbers for Japan could impact the appetite for the Japanese Yen. According to preliminary numbers, the Japanese economy contracted in Q4. Revisions may influence the timeline for a Bank of Japan pivot from negative rates.

Producer price figures for February also need consideration on Tuesday as a leading indicator for consumer price inflation. Upward trends in producer prices may signal a higher consumer price inflation environment. Producers increase prices in a tighter demand environment, passing prices onto consumers.

With the Japanese economy and inflation trends in focus, investors must track BoJ commentary. Views on wage negotiations and the timeline for a pivot from negative rates would move the dial.

Out of China

On Monday, vehicle sales figures from China will garner investor interest. Downward trends in sales could impact riskier assets. New loans also need consideration on Tuesday. An increase in new loans could signal an improving demand environment.

Housing sector data will draw investor attention on Friday. The House Price Index will reflect the impact of policy measures to bolster the housing sector.

However, central bank activity and chatter from Beijing will likely impact riskier assets more. On Friday, the PBoC will set the 1-year MLF.

Production Trends and Adjustments

The U.S. has seen a substantial reduction in natural gas production. Current data indicates that output in the Lower 48 states has declined to approximately 100.2 billion cubic feet per day (bcfd), a notable decrease from February’s average of 104.1 bcfd. This trend is largely a response to the ongoing drop in natural gas prices, prompting significant production cuts by major players in the industry.

Chesapeake Energy, soon to be the largest U.S. gas producer post-merger with Southwestern Energy, plans a drastic 30% reduction in its 2024 production. Similarly, EQT, the top natural gas producer currently, announced a curtailment of nearly 1 bcfd of production through March. These measures are indicative of a strategic industry response to align supply with the current market conditions, which are characterized by a significant surplus.

LNG Export Reductions

The natural gas market is also contending with challenges in the LNG export sector. The ongoing outage at the Freeport LNG facility in Texas has notably reduced the volume of gas flowing to LNG export plants. This has led to a decline in external demand for U.S. natural gas, exacerbating the oversupply situation domestically. The resumption of operations at the Freeport facility, expected potentially by mid-March, could provide some relief, but the timing remains uncertain.

Rig Count Declines Indicate Future Output Trends

The latest Baker Hughes report reveals a decrease in the number of operational oil and natural gas rigs, a critical indicator of future production levels. The total rig count has reduced to 622, the lowest in recent weeks, reflecting a 16.6% decrease from the same period last year. This decrease in drilling activity is a direct consequence of the downturn in natural gas prices, coupled with increased operational costs, signaling a more cautious approach from the industry.

Weekly Forecast

Given the current market conditions, including high storage levels, significant production cuts, and reduced LNG exports, the short-term outlook for the U.S. natural gas market remains bearish.

Excitement is brewing in the cryptocurrency community as both Bitcoin (BTC) and Bitcoin Cash (BCH) gear up for their respective halving events.

With these highly anticipated milestones on the horizon, investors and enthusiasts are eagerly counting down the days until the reward for mining, along with its inflation rate, is cut in half.

Halving events, which occur typically every four years for both Bitcoin and Bitcoin Cash, are programmed into the protocols of these cryptocurrencies as a means of controlling inflation and supply entering the market.

By reducing mining rewards by half and then decreasing the rate at which new coins are generated, halvings serve to increase scarcity and establish a deflationary supply model, frequently leading to upward pressure on prices.

Bitcoin halving countdown

For Bitcoin, the next halving event is expected to occur in April 2024, when the block reward for miners will be reduced from 6.25 BTC to 3.125 BTC per block.

This reduction in reward for Bitcoin miners is anticipated to have a significant impact on the supply dynamics of Bitcoin, potentially driving up demand and pushing prices higher.

Multichain crypto and blockchain explorer OKLink gives the current countdown to the Bitcoin halving event as 42 days and 10 hours, with an estimated date of April 20, 2024. The remaining blocks left for this event are currently 6,114.

Bitcoin Cash (BCH) halving countdown

Similarly, Bitcoin’s hard fork, Bitcoin Cash, is also gearing up for its halving event, which is scheduled to take place in April 2024 as well, albeit earlier than the Bitcoin halving event.

According to OKLink, the Bitcoin Cash halving event is expected to occur in the next 26 days, with a countdown of 26 days and 9 hours as of this writing. The expected date for the BCH halving event is April 4, 2024.

At that time, the block reward for miners will be halved from 6.25 BCH to 3.125 BCH per block, mirroring the reduction in mining rewards seen with Bitcoin.

Insights into Federal Reserve’s Policy

Jerome Powell, the Federal Reserve Chairman, in his recent addresses to Congress, signaled the potential for lowering interest rates later in the year, subject to further economic analysis. The Fed has elevated interest rates by a cumulative 5.25 percentage points from March 2022. Powell’s latest statements suggest an approach focused on deliberate and careful economic management, striving to balance the challenge of controlling inflation with fostering sustainable economic growth.

Influences of Economic Figures

An increase in U.S. unemployment and moderated wage gains, despite a surge in job growth in February, suggest the possibility of a rate reduction by the Fed, potentially around June. Silver’s positive reaction to these economic figures was later tempered, influenced by actions of gold traders who sold silver to hedge their long gold positions, considering gold’s relative market strength.

Comparison of Silver and Gold Performance

In contrast to silver’s 3-month peak, gold (XAU/USD) reached a record high at $2195.235, concluding the week at a groundbreaking $2179.105, an upsurge of $96.375 or +4.63%. This disparity in performance illustrates a trend of central bank preference for gold, influencing the silver market largely driven by commodity traders and speculators. The upcoming CPI and PPI reports are vital, poised to influence the direction of both metals’ prices.

Impact of Dollar and Treasury Yields

Last week’s 1.10% decline in the dollar index enhanced silver’s attractiveness to international investors. Additionally, the yield on the 10-year U.S. Treasury note reduced by 2.51%, hitting a low not seen in over a month. These conditions, along with the current climate of low-interest rates, provide a supportive backdrop for silver by minimizing the cost of holding the metal.

Market Projections

The futures market suggests a 30% chance of a Federal Reserve rate reduction in May, with a stronger likelihood of 73% for June. Silver’s market performance is expected to be swayed by these probabilities and the outcomes of important economic reports. If CPI and PPI readings exceed expectations, it could prompt a reevaluation of the chances for a June rate reduction, potentially influencing silver’s short-term market behavior.

To conclude, silver’s market path is closely connected to the strategies of the Federal Reserve, economic reports, and its comparative performance against gold. The current market environment, with gold traders using sales of silver as a hedge, suggests a cautiously positive future for silver.

When trading volume reduces faster than price declines could be an indicator that existing Ethereum investors are cutting back on trading at the current prices, instead holding out for another swift rebound phase  above $4,000 in the coming week.  

Additionally, key fundamental bullish catalysts, such as the positive sentiment surrounding the upcoming Dencun upgrade, and progress of ETH ETF filings  also further reinforce the optimistic outlook for an imminent Ethereum price rebound.

ETH Price Prediction: Bulls to Defend $3,850 Fiercely 

The curtailed selling pressure observed among Ethereum investors after breaking the $4,000 barrier puts ETH in prime position to avoid a major downswing below $3,750. 

The 7-day Exponential Moving Average (EMA) also confirms this outlook. It shows that traders who acquired ETH in the past week paid an average price of $3,740. 

With them still holding approximately 20% profits, the majority of them could hold out for more gains as the broader crypto markets remain dominantly bullish. 

A successful consolidation above that key $3,750 area could see Ethereum price advance by another 15% above the next milestone target at $4,500.

In a major move, BlackRock, the world’s largest asset manager, has seen its Bitcoin (BTC) holdings soar to an astonishing $12.3 billion. This remarkable milestone comes amid a historic surge in inflows into the BlackRock iShares Bitcoin ETF (IBIT).

According to Arkham Intelligence, BlackRock received its highest ever one-day on-chain inflow during the week, amounting to 12,600 BTC worth $842 million. With this unprecedented inflow spike, BlackRock now holds 183,300 BTC worth $12.3 billion.

The BlackRock iShares Bitcoin ETF (IBIT) added 12,600 BTC in record-breaking inflows, exceeding previous daily highs of roughly 10,000 BTC, as the fund’s investors appeared to buy the fall in the world’s largest cryptocurrency, Bitcoin, as it tumbled from all-time highs.

Bitcoin reached a fresh all-time high of $69,000 on Tuesday, only to drop drastically within minutes. The price fell by more than 10% at one time, dropping to lows of $59,224 on Coinbase, before recovering modestly.

With over 183,300 Bitcoins, Blackrock is closing in on Michael Saylor’s MicroStrategy’s 193,000 stash.

Investors have flocked to spot Bitcoin funds since the SEC allowed them in January. This year, the 10 funds have netted $8.9 billion. Excluding Grayscale’s spot fund, which existed in a previous fund structure, the newly approved funds have around $26 billion in assets. BlackRock iShares Bitcoin ETF (IBIT) has been the most popular Bitcoin ETF since its launch on Jan. 11.

BlackRock’s considerable Bitcoin holdings are a positive sign for BTC, indicating that the cryptocurrency is maturing as an asset class. Bitcoin was initially dismissed as a speculative asset with little fundamental worth, but it has proven to be a resilient and viable store of value in the face of economic instability.

At the time of writing, Bitcoin was trading at $67,552, up 1.16% in the previous 24 hours.