US jobs data set to influence traditional and crypto markets this week

This week’s economic calendar in the United States is expected to have a significant impact on both traditional and crypto markets, with a strong emphasis on employment data.

Despite positive economic indicators from last week showing strong consumer spending and cooling inflation, crypto assets have continued to decline, diverging from tech stock markets that have seen growth.

Several key economic events are lined up that could affect market conditions.

On Tuesday, the ISM Manufacturing PMI report will be released, providing insights into the health of the manufacturing sector.

This will be followed by the Job Openings and Labor Turnover Survey (JOLTS) data, nonfarm employment data, and initial jobless claims on Wednesday and Thursday, offering a detailed picture of job creation and unemployment trends.

The significant data release will come on Friday with the August payrolls report, which the Federal Reserve will closely examine as it considers its next policy moves.

Federal Reserve Chair Jerome Powell has highlighted the need to prevent further cooling in the labor market.

Weak employment data could increase the likelihood of a 50 basis-point rate cut, while strong data might reduce the chances of such a move.

Investec economist Lottie Gosling noted that while Powell has not specifically mentioned a 50 basis-point cut, any clear signs of a deteriorating labor market could push the Federal Open Market Committee (FOMC) toward more substantial easing measures.

Crypto markets have faced significant weakness over the weekend, losing around $75 billion in market capitalisation.

The decline extended into Monday’s Asian trading session, with a further 3.7% drop, bringing the total market capitalisation to $2.11 trillion.

The upcoming jobs data could determine whether the recent downturn in crypto markets continues or if a potential rate cut by the Federal Reserve triggers a recovery, making this week a pivotal one for investors in both traditional and digital assets.