Yesterday, the non-farm employment data released by the United States was much better than expected, which undoubtedly gave the market a shot in the arm!
Confidence in the U.S. economy has increased significantly, alleviating market concerns about a recession.
The Dow Jones Industrial Average hit a record high, the S&P 500 rose 0.9%, and the Nasdaq rose 1.22%.
Even the price of Bitcoin recovered from $59,828 to $62,000.
The U.S. added 254,000 nonfarm jobs in September, far exceeding expectations for an increase of 150,000.
The unemployment rate also fell to 4.1% from 4.2% last month, the lowest in three months.
These data show that the US economy is in good shape and suggest that the Federal Reserve may cut interest rates by 25 basis points.
In September, the Federal Reserve cut interest rates by 50 basis points, so the market is full of expectations for the extent of the rate cut in November.
The September employment data basically dispelled the idea of a sharp interest rate cut in November, and the market began to focus on a 25 basis point rate cut.
According to CME's FedWatch tool, the market expects the probability of a 25 basis point rate cut in November to have risen to 97.4%, a significant increase from 67.9% the previous day.
The U.S. economy is recovering, the Federal Reserve is likely to continue cutting interest rates as inflation falls, and U.S. corporate profits remain strong.
These factors will have a significant impact on Bitcoin.
Today, the crypto market is actually very dependent on the macroeconomic policies of the United States.
Changes in U.S. monetary policy not only affect U.S. stocks, but also apply to the cryptocurrency market.
The current trend is to transition from monetary tightening to monetary easing. Although there may be fluctuations in the middle, it will eventually move towards easing.
So overall, the current market environment is favorable for Bitcoin, especially when the economy is performing strongly and interest rate expectations are slowly declining.
On Tuesday, Federal Reserve Chairman Powell said there was "no rush to lower interest rates quickly," which led to a slight drop in U.S. stocks.
He may have had some understanding of the non-farm data, otherwise he would not have lowered market expectations so firmly. The market was once again accurately guided.
However, we should also note that the geopolitical situation in the Middle East has been somewhat turbulent recently, and global risks may be rising.
Therefore, we cannot be too aggressive in our operations and must keep some bullets to deal with possible black swan events.
