ADP private payrolls data showed the slowest growth since 2021, heightening concerns about a slowdown in the U.S. labor market.
The United States released the ADP employment report, known as the "small non-farm", on Thursday, showing that private sector employment increased by 99,000 in August after seasonal adjustment, the lowest since January 2021, far below the 144,000 expected by economists and less than the 111,000 in July after the downward revision.
The ADP data further confirmed the weakness in the labor market and increased bets that the Federal Reserve will cut interest rates by 50 basis points later this month.
U.S. Treasury yields fell after the ADP data, with the 10-year note down 3 basis points to 3.727%, weighing on the dollar. The dollar index, which measures the greenback's value against six other currencies, fell more than 0.21% to 101.05.
Gold prices surged after the ADP data was released, and the report did show that the labor market is in a dire state and there is a lot of concern about it.
Traders are currently pricing in a 59% chance of a 25 basis point rate cut by the Fed this month and a 41% chance of a 50 basis point cut, according to CME’s FedWatch tool.
Weakness in the U.S. labor market has fueled speculation of deeper interest rate cuts from the Federal Reserve.
At 20:30 Beijing time on Friday, investors will usher in the U.S. August non-farm payrolls report.
An authoritative media survey shows that the U.S. non-farm payrolls are expected to increase by 160,000 in August, seasonally adjusted, after an increase of 114,000 in July.
Investors also focused on unemployment data, with the U.S. jobless rate expected to fall to 4.2% in August from 4.3%, according to a survey.
The Wall Street Journal, known as the "mouthpiece of the Federal Reserve," recently published an article saying that the U.S. August employment report scheduled to be released on Friday will play a greater role than usual in determining the extent of the Federal Reserve's interest rate cut this month.
The debate at the Fed's September meeting will center on whether to start cutting rates by 25 or 50 basis points to prevent unwanted weakness in the job market. The August hiring and employment reports will be key to that decision.
A decent jobs report could prompt officials to kick off a possible series of rate cuts with a quarter-point cut. If hiring is weak or unemployment rises, as it did in July, a bigger rate cut would be imminent.
Thursday's small non-farm data showed a significant weakening of the U.S. labor market. It can be inferred that tonight's non-farm data may also be the same, increasing the possibility of a positive rise in gold after tonight's non-farm data. Therefore, gold has maintained a strong upward momentum. Today, we will take advantage of the downward pullback to buy long and keep orders to prepare for tonight's non-farm data!
In the past two months, the reaction of the US macro news in the crypto market has always been an increase first and then a decrease. Tonight's news is crucial, and with Bitcoin's months-long volatility, the time to choose a direction is getting closer.
This week, we mainly analyzed the 3-day and 5-day levels. After a few days of rest, the 5-day line also showed a downward trend. Due to the increased demand for the 3-day and 5-day lines to bottom out, it is expected that after the data is released tonight, it will be good for interest rate cuts, and Bitcoin will go up, and then the downward pressure will increase! Even though Bitcoin was strong for three days after Powell's speech last week, it then fell for half a month!
The 3-day line has a dome structure, which looks like a pot cover and is pressed quite firmly.
The news is likely to be positive, but the market performance is another matter. The previous article mentioned that the rebound high point is at a key position near 62,000, and we need to pay close attention to it.
In fact, it is not a bad thing for the market to fall to around 40,000, which is also very helpful to eliminate bubbles. The subsequent volatility will intensify! The current weak volatility brings few opportunities!
Either it continues to rise strongly, or it rises after a sharp drop, which is always better than procrastinating!
(The crypto industry is highly volatile, this is just a sharing of opinions, not investment advice)
