Employment data is coming out on Thursday.

Most likely it will be the same tune: moderate cooling, not too hot and not too cold, with little impact on the market and interest rate cut expectations.

Simply put:

Employment is not hot enough for the Fed to worry about inflation;

Nor is it bad enough to call for a recession.

July data: unemployment rate 4.2%, wage year-on-year +3.9%, looks okay. The problem is:

Job vacancies are falling;

The turnover rate is very low (people are afraid to change jobs easily);

Unemployment claims are slowly rising.

This means that the August unemployment rate, released in early September, may slightly rise to 4.3%. Wage growth is still around 4%, which is "controllable but sticky".

How to monitor? It's actually very simple:

Initial claims > 245,000 or continued claims > 2 million → weak employment, rising interest rate cut expectations, good for crypto;

Conversely → stable employment, bad for crypto.

But the overall volatility will not be too large.

I personally prefer the "weaker employment" scenario, after all, lower interest rates are the spring for risk assets. However, if wages remain stuck at 4%, the Fed cannot completely relax.