Nonfarm payrolls shocked overnight, BTC stands above 65K: but the real showdown is next Wednesday
What did you see last night?
US July nonfarm payrolls — decreased by 23,000.
What was the market expectation? An increase of 80,000.
The expectation gap exceeded 100,000.
May and June data were also revised down by a total of 103,000.
In other words, the actual jobs created in the US over the past three months were more than 120,000 fewer than everyone thought.
This is not a "data miss."
This is a complete collapse of the data.
Then what?
BTC instantly surged from around $63,000, once breaking through $65,300, hitting a new high for August.
Gold surged nearly 3% in a straight line, standing above $4,360.
The US Nasdaq rose 1%.
The whole market instantly got excited.
"No chance of rate hikes! Liquidity will loosen! Charge!"
But wait.
The unemployment rate dropped from 4.2% to 4.1%.
Employment decreased, but unemployment rate fell?
Because the labor force participation rate dropped to 61.4%, the lowest since early 2021.
264,000 people exited the labor market.
Not more people found jobs.
More people gave up looking for jobs.
What’s even more intriguing — BlackRock Global Fixed Income CIO Rick Rieder said something very interesting:
"Last month's unexpectedly weak employment data reflects the 'productivity revolution' in the AI era."
He means: US companies are learning how to expand output without increasing employees.
The application of AI in work scenarios and companies' pursuit of efficiency are reshaping the employment structure.
In other words —
Nonfarm turning negative may not be a signal of economic recession, but that AI is replacing humans.
But the market doesn’t care about these.
CME data shows the probability of a rate hike in September dropped directly from 55% to 44%.
A week ago, this number was still 67%.
The 10-year US Treasury yield quickly fell.
The US dollar index dropped nearly 30 points.
"Bad news" became "good news."
The only theme in market trading is: no rate hike.
However —
Don’t get too happy too soon.
Federal Reserve Chair Powell has clearly stated: if inflation data is hot, he is ready to support a rate hike in September.
Fed Governor Cook also said: if inflation doesn’t improve, she is ready to support a rate hike.
Nonfarm pushed down the rate hike probability, CPI can easily push it back up.
Next Wednesday, August 12.
US July CPI will be released.
This is the real showdown.
Employment data tells the Fed "to stop."
Inflation data may tell the Fed "not yet."
The Fed is caught in the middle, who do you think it will choose?
The market is currently trading "no rate hike."
But soon it may be trading "why isn’t the Fed cutting rates despite such a poor economy."
These two scenarios have vastly different implications for BTC —
The former is bullish.
The latter is — you thought you bottomed out, but actually caught the recession halfway down.
65K is not the end, maybe not even the start.
It’s just a crossroads.
Next Wednesday’s CPI is the key to deciding whether BTC continues to surge to 70K or turns back to 60K.
If CPI continues to cool → rate hike expectations completely collapse → BTC surges to 70K.
If CPI rebounds → rate hike expectations return → 65K may be a temporary top.
We’ll know within a week.
$BTC$ETH$BICO#非农意外转负，CPI成加息关键
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