Yesterday's data, which showed the number of Americans filing for unemployment benefits last week was lower than expected, eased concerns about a deteriorating labor market, but was of less importance.
However, the release of the data does not have much impact on the crypto market. Concerns about economic recession still put some pressure on risky assets, and cryptocurrencies continue to trend downward. Bitcoin fell more than 4% on Thursday, then rebounded to $56,500, down 2.9% in the past 24 hours. $BTC
It should be noted that Bitcoin has been fluctuating sideways from 73,000 to 55,000 in March for half a year, which shows that 55,000 currently has strong support. Whether the bull market has not started yet or has already gone, the recent negative factors still outweigh the positive conditions, and the anxiety of sideways trading seems to be brewing a big wave in October.
There are less than two weeks until the September interest rate meeting, and the market is paying close attention to whether the performance of the labor market supports the Fed's substantial interest rate cuts. Therefore, the US August non-farm payrolls data released at 8:30 tonight is particularly concerned. So will September be a chance to get on board or a chance to escape? #非农就业数据即将公布
Tonight at 8:30 non-agricultural data highlights
Some people predict that September will be an important node in the market, especially before the important employment data and non-agricultural data come out, market sentiment will still be unstable. #美联储何时降息？
Non-farm payrolls data and speeches by Williams and Waller will be released tonight.
Time: September 6, 20:30
Definition: Changes in the number of non-agricultural employees in the United States
Data: Previous value 11.4 Expected 16
Impact: An important reference for whether the interest rate cut is 25 or 50
After the data is released in early September, the market will price in the extent of the rate cut. If the data is poor, the market may price in a 50 basis point cut, otherwise a 25 basis point cut.
Will the upcoming data be good or bad?
On the eve of Friday's heavyweight non-farm report, employment data fell far short of expectations, with private employment hitting a new low since 2021. On Wednesday, August manufacturing data shrank for the fifth consecutive month, and expectations of a U.S. recession were heightened.
Now it depends on whether the interest rate cut is 25 or 50. At present, the short-term is more about cooperation with the trading level. The upward slow bull market is all good news; the downward adjustment is also bad news.
For a long time in the future, one factor that will affect the direction of the US economy is whether it will go into recession or return to normal, and whether it will be a soft landing or a hard landing.
According to the current trend of US stocks, the market as a whole tends to believe that the US economy will achieve a soft landing, so it has not priced the US stock market downwards under the expectation of a hard landing. Based on the assumption of a soft landing, some funds chose to withdraw from the "Big Seven" that had previously risen sharply (most of which underperformed the Nasdaq this month) and entered other blue-chip stocks with smaller gains, pushing the Dow Jones Index to a record high.
Look at the expectations of institutions for the data market
Bloomberg's consensus forecast is that non-farm payrolls will increase by 164,000, compared with 114,000 in the previous period, and the unemployment rate will drop from 4.3 in the previous period to 4.2.
Generally speaking, if such non-farm employment data is released, it can be said that relatively speaking, the unemployment rate will not rise so fast, or the magnitude and pace of the economic recession will not be so large. In this case, the global markets of U.S. stocks and U.S. bonds will react.
The other one is from Bank of America, which gives a forecast for non-farm employment. Its new non-farm employment data is more, at 200,000. So overall, at present, the market's consensus expectation for the August non-farm employment data is still relatively optimistic, unless the data is significantly lower than expected, such as the unemployment rate jumping to 4.4% or even 4.5. In that case, the entire market will become very panic and worry about the imminent arrival of a recession.
Another is the U.S. ADP in August, which is also known as the small non-farm data. The small non-farm data is relatively poor, unexpectedly falling to 99,000, setting a three-and-a-half-year low. You can see the figure below. Basically, it has been declining month by month in recent months. It has now dropped to 99,000, which does reflect the weakness of the U.S. labor market. However, the small non-farm data is not as important as the big non-farm data. The big non-farm data is still a core data that determines everything.
Federal Reserve mouthpiece: Non-agricultural data will affect the extent of the Fed's interest rate cut
Nick Timiraos, the "Fed Mouthpiece", said in his latest article that the U.S. August jobs report, scheduled for release on Friday, will play a greater role than usual in determining the extent of the Fed's interest rate cut this month. At the Fed's September meeting, the focus of the debate was whether to start cutting interest rates by 25 or 50 basis points to prevent an undesirable weakness in the job market.
Views on the September interest rate cut basis point
If a 25 basis point rate cut is announced in September, it will be in line with expectations. The negative and positive factors are not very obvious, and we still need to look at some economic indicators, so tonight's non-agricultural data will be the main focus. #9月降息
If a 50 basis point rate cut is announced in September, it is not a positive sign. It means the economy is in recession, which is a negative sign.
In addition, it is impossible to raise interest rates, and the probability of not lowering interest rates is almost zero!
Performance of the Fed in previous years when it started a rate cut cycle
January 3, 2001, cut interest rates by 50 basis points, lowering the federal funds rate from 6.5% to 6.0%: the impact was the "Internet bubble"
On September 18, 2007, the interest rate was cut by 50 basis points, reducing the federal funds rate from 5.25% to 4.75%. The impact was the "subprime crisis"
On July 31, 2019, the Fed cut interest rates by 25 basis points, lowering the federal funds rate from 2.25%-2.50% to 2.00%-2.25%. The economy was relatively normal at the time.
On March 3, 2020, the interest rate was cut by 25 basis points, from 1.50%-1.75% to 1.00%-1.25%. You should remember that the U.S. stock market was circuit-breakered several times after the interest rate cut, and then the crypto market ushered in the 312
But there is another possibility! The September rate cut will most likely be delayed until after the November election! After all, the election will be held in November, and the best result should be that the new incumbent announces a rate cut after the election. I have said before that Trump still wants to take the credit for the rate cut!
Soft landing vs hard landing, should we get on board in September?
The non-farm payrolls data is one of the five major financial reports of the US stock market. Every time it is released, it will bring great fluctuations to the market. The reason for paying attention to this non-farm payrolls is that the interest rate cut was decided in September, and the employment data will be the focus of the market.
If the unemployment rate rises sharply beyond expectations, such as to 4.4 or even 4.5, I believe that the US stock market will choose a direction, and then Bitcoin BTC will naturally be affected, which will be reflected in the price. If it is better than expected, if the unemployment rate drops to 4.2,
I think the entire US stock market may continue to fluctuate for a while. So the best strategy is to keep a short position and wait and see!
