Crypto Surge & Market Volatility: Key Events Driving the Week Ahead

March is here, and the crypto market is off to a wild start. Bitcoin has surged over 10% in less than 24 hours after suffering a 20% decline in the past month. This kind of extreme volatility is what makes the crypto market so unpredictable.

One major driver of this price movement is a recent post from Donald Trump. In a statement, he expressed strong support for Bitcoin and Ethereum, suggesting that cryptocurrencies could be at the heart of a US strategic reserve. His remarks have fuelled speculation that the US might take a more favourable stance on crypto, elevating the industry after years of regulatory pressure under the Biden administration. The market reaction has been swift, with Bitcoin rebounding sharply from its recent drop.

In terms of macroeconomic data, it’s NFP week, meaning increased volatility is likely by Friday. Tonight, we have European CPI data, with expectations of a slight decline from 2.5% to 2.3%. Tomorrow, we’ll see the RBA meeting minutes along with Australian retail sales, which are forecasted to improve from -0.1% to 0.3%.

On Wednesday, Australia’s GDP figures will be released. Thursday brings the ADP non-farm employment change, S&P Global Services PMI, and a speech from the RBNZ governor. Then, on Friday, the ECB will announce its interest rate decision, with expectations of a 25-basis-point cut, reducing the rate from 2.9% to 2.65%. This will be followed by the ECB press conference, a key event given the market’s anticipation of policy easing.

The US labor market remains a critical focus. Non-farm payrolls are expected to show continued strength, which could impact inflation expectations. Last week's PCE data indicated some cooling, but not as much as the Federal Reserve had hoped. If job growth remains strong, it could delay any anticipated rate cuts in the US.

Adding to the mix, Trump has reintroduced tariffs on Canada and Mexico, set to take effect on March 4th. This could create additional volatility, especially for the US dollar and trade-related assets.

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