Crypto Market Eyes 3 Upcoming US Economic Reports This Week

This week, crypto markets are set to monitor several US economic events following a quiet weekend, where Bitcoin’s (BTC) price remained below the $65,000 mark.

Attention will primarily focus on the US labor market, as achieving maximum employment is one of the Federal Reserve’s key objectives.

ISM Manufacturing PMI for September

The ISM Manufacturing PMI for September will be vital in assessing economic activity, reflecting the health of the manufacturing sector. The consensus anticipates a manufacturing survey reading of 47.3 in September, which indicates only a slight change from August’s 47.2.

September’s data is scheduled for release on Tuesday, October 1. Analysts at 10X Research expect some anxiety ahead of tomorrow’s results and subsequent data releases.

“Despite most attention being directed at US employment metrics, the ISM Manufacturing Index has historically triggered a 10% market correction during the first week of each of the prior three months. Employment data significantly influences market sentiment. Weak employment results heighten recession fears and boost expectations for Fed rate cuts, whereas robust employment statistics comfort investors regarding the economy’s resilience, even if the ISM Manufacturing Index implies otherwise,” noted the researchers said.

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A PMI reading exceeding expectations in comparison to the previous 47.2 would signal economic strength. This scenario may bolster investor confidence in traditional markets, potentially prompting a shift toward riskier assets, such as cryptocurrencies, to hedge against inflation or market volatility.

ISM Services PMI

Similar to the manufacturing data, the ISM Services PMI assesses economic activity, reflecting the health of the services sector. According to S&P Global’s flash PMI report for September, the outlook for service output has significantly worsened, with the future output index reaching its lowest level since October 2022.

This declining optimism stems from uncertainties concerning the economy and demand, particularly in light of the Presidential Election.

The Services PMI is expected to rise slightly to 51.7 in September, up from 51.5 in August. This data will be released on Thursday, October 3.

Should the data exceed expectations, it would indicate a robust economy, likely boosting investor confidence in traditional markets. This, in turn, could encourage greater capital allocation toward riskier assets like Bitcoin.

Nonfarm Payrolls and Unemployment Rate

Nonfarm Payrolls (NFP) figures are a key indicator of labor market health, revealing insights about job creation and employment rates. A robust NFP report, showcasing substantial job growth, can stimulate consumer spending, foster economic growth, and heighten demand for digital assets.

Conversely, a weaker NFP report may raise concerns about economic stability, driving investors toward alternative assets such as cryptocurrencies. The Unemployment Rate, another significant economic metric, indicates labor market strength. A falling unemployment rate typically suggests a stronger economy, enhancing consumer confidence and potentially elevating crypto prices as individuals diversify their investments.

Analysts expect September’s NFP to show an increase of 145,000 jobs, up from 142,000 in August, while the unemployment rate is predicted to remain stable at 4.2%.

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Capital Economics points out that while job growth is still positive, it has decelerated compared to earlier years, and hiring expectations are dwindling. Consumer sentiment regarding job security is weakening, as highlighted by the Conference Board’s survey, which warns that the unemployment rate could climb to 5% later this year.

As the labor market cools, Capital Economics suggests that persistent underperformance in payroll figures could lead the Federal Reserve to contemplate an additional rate cut of 50 basis points in November, following a similar reduction in September.

Speech by Jerome Powell

Markets are preparing for a speech by Federal Reserve chair Jerome Powell on Monday, September 30. Powell is anticipated to discuss the Fed’s rationale behind its decision to lower the benchmark interest rate by half a percentage point and provide insights into the considerations that will guide expected interest rate cuts for the remainder of the year and into 2025.

As crypto markets brace for potential volatility stemming from these US economic events, Bitcoin’s price continues to hover below the $65,000 mark. As of this writing, it is trading at $64,531, reflecting a decrease of 1.63% since the opening of Monday’s session.