Nonfarm payrolls shocked overnight, BTC surpasses 65K: but the real showdown will be next Wednesday
What did you see last night?
US July nonfarm payrolls — down 23,000.
What is the market expectation? An increase of 80,000.
Expectations fell short by more than 100,000.
The figures for May and June were also revised down by a combined 103,000 people.
In other words, over the past three months, the actual jobs created in the U.S. were more than 120,000 fewer than expected.
This is not a "data miss."
This is a complete collapse of data.
And then?
BTC surged instantly from around $63,000, briefly breaking through $65,300, setting a new high for August.
Gold surged nearly 3%, reaching $4,360.
The Nasdaq rose 1%.
The entire market instantly became electrified.
"No chance of raising rates! Liquidity is about to loosen! Charge! ”
But wait.
The unemployment rate dropped from 4.2% to 4.1%.
Employment has decreased, but the unemployment rate has actually fallen?
Because the labor force participation rate dropped to 61.4%, the lowest since early 2021.
264,000 people have exited the labor market.
Not more people have found jobs.
More people have given up on job hunting.
What's even more intriguing is — Rick Reed, BlackRock's Global Fixed Income CIO, said something quite interesting:
"Last month's weaker-than-expected employment data reflects the 'productivity revolution' of the AI era."
What he meant was: American companies are learning how to scale output without increasing their workforce.
The application of AI in work scenarios and enterprises' pursuit of efficiency are reshaping the employment structure.
In other words—
The shift from nonfarm payrolls to negative may not be a sign of economic recession, but rather that AI is replacing humans.
But the market doesn't care about that.
CME data shows that the probability of a rate hike in September dropped directly from 55% to 44%.
A week ago, that figure was still 67%.
The 10-year U.S. Treasury yield is rapidly declining.
The US dollar index fell nearly 30 points.
"Bad news" became "good news."
The market trading theme has only one thing: no interest rate hikes.
But—
Don't get too happy just yet.
Fed Chair Wash has made it clear: if inflation data is hot, he is prepared to support a rate hike in September.
Federal Reserve Governor Tim Cook also said that if inflation does not improve, she is ready to support rate hikes.
Nonfarm payrolls have lowered the probability of rate hikes, and CPI can push it back at any time.
Next Wednesday, August 12.
US July CPI release.
This is the real showdown.
Employment data tells the Fed "it's time to stop."
Inflation data may tell the Fed "it can't stop yet."
The Fed is caught in the middle—guess who it will choose?
The market is currently trading "no rate hikes."
But soon there may be a trade: "Why is the economy so bad and no rate cuts?"
What these two scenarios mean for BTC—
A world of difference.
The former is a positive sign.
The latter is—you think you've hit rock bottom, but end up halfway up the declining hill.
65K is not the end, and may not even be the starting point.
It is just a crossroads.
Next Wednesday's CPI will be the key to determining whether BTC continues to surge to 70,000 or turns back to 60,000.
If CPI continues to cool down→ rate hike expectations will be completely shattered, → BTC will hit 70,000.
If CPI rebounds → rate hike expectations return→ 65K could be the stage top.
Within a week, the truth will be clear.
$BTC$ETH$BICO #非农意外转负, CPI is the key to raising interest rates
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