This week’s US economic calendar is short but packed with crucial data that could significantly influence the crypto market.
The week begins with markets closed for Labor Day on Monday.
On Tuesday, 3 September 2024, the August ISM Manufacturing PMI will set the tone, followed by the July JOLTs Job Openings data on Wednesday. Thursday is pivotal, featuring both the ADP Nonfarm Employment data and Initial Jobless Claims.
Finally, the August Jobs Report on Friday will be the highlight, with analysts closely watching for indications of labor market strength or weakness.
Key Events This Week:
1. Markets Closed For Labor Day – Monday
2. August ISM Manufacturing PMI data – Tuesday
3. July JOLTs Job Openings data – Wednesday
4. August ADP Nonfarm Employment data – Thursday
5. Initial Jobless Claims data – Thursday
6. August Jobs Report -…
— The Kobeissi Letter (@KobeissiLetter) September 1, 2024
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Crypto Markets Could React Sharply To Data Releases
Crypto markets, which have been on a downward trend, may react sharply to these data releases.
If the August ISM Manufacturing PMI data shows strong manufacturing growth, it might signal economic strength, potentially reducing the likelihood of Federal Reserve rate cuts. In this case, it could negatively affect crypto prices as higher interest rates often reduce risk appetite.
Furthermore, strong job growth or lower jobless claims could signal a robust labor market, again lowering expectations for rate cuts and pressuring crypto markets. Conversely, weaker data could support rate cuts, potentially boosting crypto.
The August Jobs Report is the most influential. A strong report could reduce the chances of Fed easing, negatively impacting crypto, while a weaker report could spark a rally as markets anticipate lower interest rates, which generally favor riskier assets like cryptocurrencies.
Recently , at the Jackson Hole symposium, Fed Chair Jerome Powell said that the “time has come for” the US Federal Reserve to cut interest rates.
According to Investec economist Lottie Gosling, very weak data could make a 50 basis-point rate cut more likely, and on the other hand, strong data could rule out a bigger cut.
He commented, “Even though Powell refused to comment on whether the door could be open to a 50 basis-point [rate] cut in September, we do suspect that a further clear deterioration in the labor market could steer the FOMC into more aggressive easing.”
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Crypto Market Continues to Bleed
Over the weekend, crypto markets experienced a significant downturn, with a total loss of approximately $75 billion in market capitalization. The decline extended into Monday morning, with the market seeing a further 3.7% drop, bringing total capitalization down to $2.11 trillion.
Bitcoin has declined by 10.77% over the past week. It is currently trading at around $58,300, largely flat over the past day.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
