Surviving "Liberation Week"

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Surviving "Liberation Week"

Aurelie Barthere

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Key Takeaways

5 min read

This week will be rich in data disclosure and political announcements that have the potential to determine the market trajectory of crypto and other financial assets. Aside from the details on reciprocal and sectorial tariffs on Wednesday 2, markets will assess:

whether the slowdown in US growth is continuing via the ISM PMI Manufacturing on Tuesday 1, and ISM PMI Non-Manufacturing on Thursday 3 (critical for business activity outlook),
and, of course, via US payroll data to gauge whether a pessimistic US consumer can still count on a solid job market (Friday 4).
To conclude the week, Fed Chair Powell will speak on Friday and deliver hints on whether rate markets have gone too far on Fed rate cut pricing (three rate cuts priced for FY 2025 as we write).
We will look at these various cues for confirmation of our 70% probability scenario of a bottom in crypto prices between now and June.

Let’s dive in on what to look for to understand future price trajectory.

Growth: Worries about the consumer and private investment

Investors and economists are worried about private consumption which makes up 66% of the US growth. There are three sources of concern: What if tariff-driven inflation eats into real income? What if the consumer is too worried to spend significantly? What if the stock market correction affects household assets too negatively?

On concern #2, confidence and spending, we are seeing signs that a downbeat consumer (Conference Board Confidence Survey published last week at 8th 10-year percentile) started to put a break on spending: on a 3m3m% annualised basis, real private spending decelerated to 2.1% in...