The shortened US holiday week means a somewhat compressed economic data schedule that could impact the inflation and interest rate outlook and, in turn, the outlook for Bitcoin (BTC) and other cryptocurrencies.
Minutes of the mid-June meeting of the US Federal Reserve’s Federal Open Market Committee (FOMC), which sets interest rates, will be released at 2 p.m. ET on Wednesday. At that meeting, the Fed paused its more than year-long streak of rate hikes that had raised its benchmark fed fund rate to between 5% and 5.25% from 0% in early 2022.
In public comment since that meeting, Fed officials – including Chairman Jay Powell – have made it clear that the pause in rate hikes was in fact just a pause. Central bank policymakers currently expect to raise interest rates at least twice more in 2023. Rate traders are unanimous: The CME’s Fed Watch tool currently forecasts an 89 percent chance that the Fed will resume rate hikes at its next meeting in late July, with a probability of 25 basis points (bps) Fed Funds Rate hike.
Market participants can get a preview of the June employment situation Thursday at 8:15 am ET in the ADP Employment Report. Forecasts are for a significant drop in private sector recruitment to 160,000 in June from 278,000 in May.
Just a few minutes later, the number of initial jobless claims from the government will be released on Thursday. Although this indicator has increased in recent months, it remains below the level that would be associated with a general job loss in the economy. Economists are forecasting initial jobless claims to come in at 245,000 in Thursday’s report, up from 239,000 previously.
Ninety minutes later on Thursday comes the Job Openings and Labor Turnover Survey (JOLTs), a previously overlooked report that has gained prominence lately as market participants tried to leave no stone unturned in search of signals on the employment outlook. That number has fallen slightly over the past year, indicating the mildest slowdown in the labor market. Forecasters expect Thursday’s print data to show JOLTs at 9.9 million, down from 10.1 million previously.
This week’s main event takes place on Friday morning at 8:30am ET with the US Nonfarm Payrolls report for June. This indicator has beaten expectations for a staggering 14 straight months and continues to show strength amid rising interest rates, which many had come to expect would slow the economy and lead to a larger drop in hiring. Economists expect 250,000 new jobs were added in June, up from 339,000 in May. The unemployment rate is expected to remain at 3.7%.
While many eased ahead of July 4th, a key economic indicator, the ISM’s Manufacturing Purchasing Mangers Index (PMI) was released on Monday. That reading slowed from 46.9 to 46.0 in June and was the weakest reading since May 2022 when many Covid lockdowns were still in place. Readings below 50 for this report are associated with a decline in manufacturing and this was the seventh straight month below the 50 mark.
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