As the cryptocurrency markets exhibit signs of recovery over the weekend, all eyes are now turning to a busy week ahead on the economic calendar in the United States, with particular focus on the Personal Consumption Expenditures (PCE) inflation data.

Key Economic Events:

Tuesday: New home sales figures will be released, providing insights into overall economic confidence. Additionally, April's S&P Global Manufacturing PMI and S&P Global Services PMI preliminary readings will offer valuable insights into business conditions.

Thursday: The Q1 GDP Growth Annualized preliminary estimate will be revealed, giving an initial glimpse into the economy's health in the previous quarter.

Friday: The Core Personal Consumption Expenditures (PCE) report, a primary gauge for inflation, is due, with the March figure estimated to remain at 2.8%. Additionally, the Michigan Consumer Sentiment Index and Consumer Inflation Expectations reports for March will be released. These events hold significance for Federal Reserve policymakers, particularly amidst concerns over persistently high inflation.

Market Impact: The Federal Reserve is closely monitoring inflation trends, and any deviation from expectations in the PCE figures could strongly influence market sentiment. Moreover, the earnings reports of around 20% of S&P 500 companies, including Microsoft and Alphabet (Google), will provide further insights into the health of the economy and potentially impact market dynamics.

Crypto Market Outlook: The cryptocurrency market cap returned to and held the $2.5 trillion level over the weekend, with Bitcoin leading the charge following its fourth halving event. BTC prices have been range-bound since the end of February, trading above $66,000 at the time of writing. Ethereum recovered to reclaim $3,200, while altcoins like LINK, NEAR, and DOT showed impressive gains.

Final Thoughts: As investors await crucial economic data releases, including the PCE report, market volatility is expected to persist. Any significant surprises in the data could have ripple effects across both traditional and cryptocurrency markets, shaping investor sentiment and influencing trading strategies in the week ahead.