This week's economic spotlight is on the upcoming employment data for May, set to release Friday. Prior to this, several significant reports on Wednesday indicated unexpected economic weakness. The ADP private payrolls report revealed only 37,000 new jobs for May, well below the anticipated 115,000 and trailing April's already low figure of 60,000, marking the weakest ADP count since March 2023. The May ISM Services report also disappointed, coming in at 49.9, representing contraction as it dipped below the 50 mark, a first in a year. Further insights from the Federal Reserve's Beige Book described slight declines in economic activity across half of the Districts, with a predominantly pessimistic outlook persisting. Collectively, this data saw a decrease in the 10-year U.S. Treasury note yield to 4.36%, the lowest in a month, and boosted the odds of a Fed rate cut in July to 29%, climbing from 22% the previous week. The chance of further cuts by September jumped to 76% from 58%. Meanwhile, Bitcoin (BTC) has shown considerable resilience, previously rallying nearly 50% to a record high just two weeks ago, despite Fed officials indicating a lack of need for rate cuts. Currently trading around $105,000, Bitcoin's reaction remains subdued ahead of Friday's jobs report, which may solidify either the prospects for an immediate rate cut or maintain the status quo. With forecasts suggesting an addition of 130,000 jobs for May and an unemployment rate holding steady at 4.2%, the situation demands close attention from investors.
Weak Economic Reports Raise Odds for Fed Rate Cuts: What Does It Mean for Bitcoin?
Soft U.S. economic data raises the likelihood of Federal Reserve interest rate cuts, but Bitcoin shows resilience with minimal reaction to these developments.
Jamie Bennett
Crypto Analyst
6 min read
4,792
Analysis
Market Sentiment
Bearish
Neutral
Bullish
News Impact
8/10
Credibility: 9/10
Trading Recommendation
BTC
BTC
SELL
Entry Price
$0
Confidence
70%
Stop Loss
$102000
Take Profit
$110000 - $115000
Due to favorable upcoming market conditions and potential shifts in Fed policy, holding BTC with adjusted take profit and stop loss is wise.
