The crypto scene this week could face a stiff ripple, not due to the code disruption or a sudden BTC vault, but on the basis of good old-fashioned economic data. The U.S. Federal Reserve’s scheduled meeting on Wednesday will be a toast to the eyes for many crypto investors. After a long spell of rate hikes that rocketed the federal funds rate from a previously cosy 0% to a heart-stopping 5-5.25% back in early 2022, the Fed decided on a pause. But as Chairman Jay Powell discerningly put it, this pause is “only a pause”. Policymakers reveal an 89% chance of resuming rate hikes in the upcoming July meeting as per the CME’s Fed Watch tool. Inversely proportional, should we say?
Thursday’s auspicious unveiling of June’s employment data coupled with initial jobless claims forecasted at 245,000, a rise from 239,000 only intensifies the anticipation stirring among crypto enthusiasts. Against the backdrop of shifting interest rates, economic trends are not to be discounted. The ADP Employment Report indicates a perceived shrink in private sector hiring in June, turning the tables from May’s 278,000 jobs to 160,000. Evidently, a pinpoint on a map awakens the sleuth inside a crypto investor.
In tandem with Thursday’s jobless claims is the Job Openings and Labor Turnover Survey (JOLTs), a measure that’s garnered more attention recently as market watchers search for pointers on the employment landscape. It’s been a downhill journey for JOLTs since last year, nodding to a slight cooling off in the labour market. Predictions reckon a further dip to 9.9 million from 10.1 million.
The simmering centrepiece comes in the form of Friday’s U.S. Nonfarm Payrolls report. For 14 months straight, this robust indicator has surpassed expectations, defying the surge in interest rates and maintaining the economy’s heart rate. The magic number for June is expected to be 250,000 jobs, a retreating shuffle from May’s 339,000. Meanwhile, the unemployment rate could be a persistent 3.7%.
No light should be shed on the ISM’s Manufacturing Purchasing Managers Index (PMI), which was quietly released on Monday. A milestone was hit as the PMI fell to its lowest level since the pandemic-induced lockdowns of May 2022, showcasing the cold reality of a contracting manufacturing sector. This marks the seventh month that the PMI has shied away from the comfort of the 50 level.
So, wheeling back to the crypto forecast for the week – might it be a calm sea or a tumultuous tempest? Time will tell. What remains certain is that rate hikes and employment data will be scrutinised for any hints of their impact on our beloved digital coins. C’est la vie in the world of cryptocurrency.
Source: Coindesk
