The US non-farm payrolls data for September 2024 exceeded expectations by a large margin, with 254,000 new jobs, far higher than the expected 150,000, and the unemployment rate dropped to 4.1%. This shows the strength of the job market, which may slow down the Fed's pace of drastic interest rate cuts and maintain higher interest rates. This is bad news for the cryptocurrency world. In the short term, there will definitely be fluctuations up and down to kill a wave of high-leverage contracts.
When interpreting the impact of non-farm payrolls (NFP) on the cryptocurrency market, the difference between the previous value, the expected value, and the published value is crucial. The comparison between these three can reveal the market's reaction and thus affect the trend of the cryptocurrency market.
1. Definition of previous value, expected value and published value
Previous value: The last non-farm data released is the benchmark used by the market to refer to historical trends.
Expected value: The data that economists and analysts predict will be released based on market conditions. Markets usually price in expected values.
Announced value: The actual non-agricultural data is the most direct factor affecting market trends.
2. The impact of previous values, expectations and published values on the cryptocurrency market
Negative situation
The published value is much higher than expected
Scenario: If the non-farm payrolls release value far exceeds expectations, it means that the job market is very strong and economic growth is healthy, which may exacerbate inflation concerns.
Impact: The Federal Reserve may adopt a tighter monetary policy, such as accelerating interest rate hikes or reducing asset purchases, which will lead to reduced market liquidity and the withdrawal of funds from risky assets (such as cryptocurrencies), which will lead to a decline in the cryptocurrency market.
Conclusion: The announced value is significantly higher than expected, which is negative for the currency circle.
The expected value is basically consistent with the previous value, and the announced value exceeds expectations
Scenario: If the announced value is not much higher than expected, but still higher than expected and the previous value, the market may still expect the economy to overheat.
Impact: Although the speed and intensity of the interest rate hike may not be too aggressive, the Fed's expectations of monetary tightening have strengthened and market liquidity has tightened, which has put some pressure on cryptocurrencies.
Conclusion: The published value is slightly higher than expected, which is slightly bearish for the cryptocurrency market.
Bullish scenario
The published value is far lower than expected
Scenario: If the non-farm payrolls are much lower than expected, it means that economic growth may be slowing and the job market is weak. This usually triggers market concerns about a recession.
Impact: The market may expect the Fed to delay raising interest rates, or even loosen monetary policy to stimulate the economy. This loose monetary environment will increase market liquidity, and funds will flow into high-risk assets (such as cryptocurrencies), pushing up the price of coins.
Conclusion: The announced value is significantly lower than expected, which is positive for the bullish currency circle.
Expected to be lower than the previous value, the published value is slightly lower than expected
Scenario: If expectations are already lower than the previous reading, and the published reading is further below expectations, the market may expect a weaker economy and the Fed may adopt a more dovish policy.
Impact: The market's preference for risky assets has increased, especially high-risk assets such as cryptocurrencies will benefit from abundant liquidity, and the cryptocurrency market may rebound.
Conclusion: The published value is slightly lower than expected, which is slightly bullish for the cryptocurrency market.
Neutral Case
The published value is close to expectations
Scenario: When the published value is very close to the expected value, the market reaction is usually flat because the market has already digested the expected value.
Impact: Market liquidity and risk sentiment remain stable, and the cryptocurrency market may react less.
Conclusion: The announced value is in line with expectations and the impact is limited.
3. Specific impact mechanism of non-agricultural data
Negative: Announced value is higher than expected → Fed tightening expectations strengthened
Strong job market → Fed rate hikes → Money flows out of risk assets → Crypto prices fall.
Positive: Announced value is lower than expected → Fed easing expectations strengthened
Weak job market → Fed slows rate hikes or eases policy → Money flows into risky assets → Crypto prices rise.
4. Conclusion
Negative situation: The non-farm data released is higher than expected, especially much higher than expected, the market expects the Fed to raise interest rates, and the crypto market falls.
Positive scenario: Non-farm data is lower than expected, especially far lower than expected. The market expects the Fed to slow down interest rate hikes or even ease interest rates, and the crypto market rises.
Ultimately, the difference between the actual published value of non-agricultural data and market expectations determines its impact on the cryptocurrency market. The more the data deviates from expectations, the greater the impact and the more volatile the market.
