Tonight, the major non-farm payroll and employment rate data will be announced. I initially wanted to take it easy but have been urged to update, so let’s quickly put together a piece.
Currently, the expected value for the U.S. unemployment rate in October is 4.1%. If tonight's announced value is also 4.1%, it would indicate relatively stable data. If it is 4%, it would be favorable for the market.
The adjusted non-farm employment population (in ten thousand) for the U.S. in October has a previous value of 25.4, which caused significant market fluctuations last month, and the expected value is 11.3. The market generally expects a significant decline in employment due to the impact of strikes and hurricanes. If there is indeed a substantial decline, it would actually strengthen the expectations for interest rate cuts, which would be positive for the market.
In the crypto space, we need data that does not indicate recession but can increase expectations. But we also need to consider what kind of data the Republican Party, the Democratic Party, and the Federal Reserve need.
As we all know, November 11th is the U.S. election day. Tonight’s data is the only important macro data before the election. Ignoring various other factors and assuming Trump’s election as a default, we can infer what he needs. He needs data that can undermine the legitimacy of the Democratic administration and facilitate a large influx of liquidity after he takes office. With only four days left until the election, Harris is fundamentally powerless to turn things around. Under normal circumstances, Trump is about to take office, so Powell would have strong motivation to cooperate for political speculation and alignment. If this is the case, a poorer non-farm data (for example, less than the previous value of 25.4, or less than or equal to the expected value of 11.3) would weaken the Democratic administration's capability and enhance expectations for interest rate cuts, which would be beneficial for risk markets including U.S. stocks and the crypto space.