Tehran hit again, Fed's PCE index release incoming: 5 things to know about Bitcoin this week

On Saturday, the United States launched direct strikes on three Iranian sites, following a week of Israeli bombardments targeting Iran’s air defense systems, missile facilities, and uranium enrichment centers. 

This week, all eyes will be on how Iran reacts, and the response will likely affect how Bitcoin and financial markets move, alongside several economic data releases and commentary from central bank officials.

Markets react to US strikes on Iran

President Donald Trump, speaking after the US strikes, has floated the possibility of pursuing “regime change” in Tehran. His administration had alluded that it was willing to return to negotiations, but the US attacks over the weekend show that the POTUS may not be in the mood to talk.

On Monday, the impact of the geopolitical developments was felt across financial markets. The US Dollar Index (DXY) rose to 99.287, up 0.37% from Friday’s close. Meanwhile, the 10-year Treasury bond yield inched up to 4.39%, a slight uptick of 0.01 percentage points. Over the past month, yields have declined by 0.12 points, still higher than a year ago.

The US stock market index S&P 500 dropped 0.22% to 5,978.47 in the pre-market sessions, bringing its four-week slide to 0.96%. 

On the crypto front, Bitcoin fell below the $100,000 mark for the first time since May, hitting an intraday low of approximately $98,000. However, it rebounded to just under $102,000 later in the day. 

Derivatives markets saw liquidations totaling over $600 million in the last 24 hours, according to data from Coinglass. 

May home sales could plunge, rate uncertainty clouds house businesses

Housing market data released by the National Association of Realtors showed that existing US home sales declined by 9.7% in May to an annualized rate of 3.91 million units. House realtors saw a 26.6% year-over-year drop, which missed analyst expectations of 3.90 million.

The median price for existing homes slipped 0.7% from April to $284,600, though it remained up 2.3% from a year earlier. Prices in the Northeast rose 4.9% to $327,900, up 7.8% from a year ago. 

The Midwest experienced a 0.4% monthly decrease but still saw a 3.0% annual gain, with a median price of $227,400. In the South, prices fell 1.0% to $247,400, while in the West, the median dropped 2.3% to $408,400, now slightly lower than May 2024 levels.

The mean sales price also declined slightly by 0.6% to $319,300. Economists are expecting home sales data from Washington to be released on Tuesday, to show more of the same.

Consumer confidence post-Fed statement

June’s Consumer Confidence Index and remarks from Federal Reserve Chair Jerome Powell are slated to come later on this week. Data from the Cleveland Fed’s real-time inflation “nowcast” suggests that CPI may be accelerating again. 

According to economic analysis firm the Market Mosaic, the nowcast shows an annualized CPI gain of 2.6% for June, up from May’s 2.4%, likely due to resurgent inflationary pressures.

Since the start of June, oil prices have increased by $13 per barrel. According to Federal Reserve estimates, every $10 rise in oil adds approximately 0.4% to overall inflation. Inflationary pressures will be the centre of Chair Powell’s two-day testimony before Congress starting Tuesday, June 24.

GDP and PCE Data 

The week rounds off with two data releases: Q1 2025 GDP and May’s Core PCE inflation reading.

The Commerce Department is scheduled to publish the first-quarter GDP estimate on Thursday at 8:30 a.m. ET, with markets anticipating a contraction of 0.2% on an annualized basis. 

Canada will also release its own inflation data on Wednesday, with headline CPI expected at 1.5% and Core CPI at 2.6%. 

On Friday, May’s Core Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, will be released. Analysts expect a modest 0.1% increase month-over-month. 

In other markets, European Central Bank President Christine Lagarde will speak at the European Parliament in Brussels on Monday. Bank of England Governor Andrew Bailey is scheduled to appear at the British Chambers of Commerce conference on Thursday. 

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