Crypto Market Braces for Key US Economic Events This Week

US economic data continues to affect Bitcoin and crypto in general. Market participants brace for impact ahead of multiple calendar events this week.

Markets are also transitioning from the much-hyped Bitcoin 2024 Conference, which ended on Saturday after keynote speeches from important personalities.

US Economic Data This Week

According to MarketWatch , this week is packed with economic events. Let’s break down which ones could have a serious impact on the cryptocurrency market and influence investors’ portfolios.

US Economic Calendar. Source: MarketWatch

US JOLTS Job Openings

Markets await Tuesday’s June Job Openings and Labor Turnover Survey (JOLTS) data from the US Bureau of Labor Statistics (BLS). The number of job openings is expected to moderate to 8 million from 8.1 million in May, as well as measures of labor market slack and wage growth.

This data is expected to provide insights into the labor market and influence policy. Investors will closely watch job creation numbers and wage growth data, which could sway market sentiment and monetary policy expectations.

Weakening jobs data and slowing wages are positive for crypto. They  encourage  the Federal Reserve to begin cutting interest rates. As labor markets must cool for inflation to decline, the July 30 report can shake things up in the Bitcoin market.

Non-Farm Payrolls

On Wednesday, traders will also closely scrutinize the BLS’s ADP  employment  report or non-farm payrolls (NFP). The US economy added 206,000 jobs in June, slowing from a downwardly revised May tally of 215,000. 

Wednesday’s report is forecasted to show private payrolls increased by 149,000 jobs in July. The median forecast is 168,000, relative to the previous 150,000. In the current environment, bad employment data is good for markets.

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Notably, the US Fed uses NFP data to inform its decision to hike interest rates or keep them higher for longer. Like the JOLTS report, this data also shows whether the job market is conducive to a shift in the Fed’s stance and traders’ fears of an interest rate hike.

FOMC Meeting and Powell Press Conference

On July 31, the Federal Open Market Committee ( FOMC ) meeting will be interesting to watch. It will be followed by Federal Reserve Chair Jerome Powell’s press conference. The meeting will focus on  potential changes to interest rates .

The Fed kept interest rates between 5.25% and 5.50% in June. As BeInCrypto reported, the  US Consumer Price Index (CPI) dropped to 3%  in June, suggesting easing inflation. Nevertheless, according to Powell’s delivery of the  Semi-Annual Monetary Policy Report , the Fed is not ready for rate cuts.

He cited a “lack of confidence that inflation is sustainably heading towards the 2% target.” This means the Fed may continue raising interest rates until it feels comfortable that inflation has calmed. Unfortunately, progress against inflation has been slow since mid-2023, inspiring policymakers’ skepticism for early rate cuts- it could reignite inflation.

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Nevertheless, the case for a rate cut continues to strengthen. Tailwinds sprout from inflation and job market data, showing price increases decelerating while the unemployment rate ticks up.

Accordingly, expectations hold that the Fed could cut its benchmark interest rate by September. Notably, the central bank has not yet committed to a timeline.

Morgan Stanley analysts expect the FOMC to maintain the current interest rate at 5.375%. They speculate that Powell will reiterate increased confidence in his Wednesday press conference, hinting at growing readiness to lower interest rates.

“We continue to look for three cuts this year starting in September. Considerable progress on inflation allows the Fed to inch closer to rate cuts. Chair Powell should emphasize increased confidence,” said the analysts.

Still, minutes from the FOMC’s June meeting revealed steady US economic activity. They also signaled strong labor market conditions and low unemployment rates. The bottom line is that  policymakers  follow the path toward slower inflation. Fed officials’ primary commitment is to inflation gauges to determine whether price hikes are under control or not.

US Economic Calendar’s Implication For Crypto

The number of Nonfarm Payrolls added to the US economy every month has an important effect on the US dollar and risk assets like Bitcoin and cryptocurrencies. The Fed examines jobs and inflation data to determine the need for an interest rate hike. As such, employment data is critical to the central bank’s decision as well.

Higher interest rates make borrowing expensive, which negatively impacts risk on assets. This is because traders use leverage for gains in risk-on assets like crypto. As such, NFP data could induce volatility in Bitcoin and crypto prices in general.

Crypto traders and investors should, therefore, brace for volatility this week. Bitcoin struggles to tag $70,000 and could haul altcoins with it depending on how the US economic data pan out. Total global market capitalization is up almost 4%, setting the week off to a good start.