Dollar awaits payrolls, euro gains
The U.S. currency retreated slightly on Monday amid light trading due to the holiday, as traders await key labor market data as they look for signs of possible interest rate cuts by the Federal Reserve.
This Monday, activity will be minimal due to the U.S. Labor Day vacation.
Dollar Focuses on Payrolls Report
The dollar was able to recover last week, after having lost about 5% since the beginning of July, and now the focus is on the U.S. employment report due later this week.
U.S. payrolls due on Friday will play a crucial role after Fed Chairman Jerome Powell shifted from fighting inflation to a willingness to guard against job losses, indicating the likelihood of a 25 basis point rate cut by the end of the month.
Should the outcome be in line with estimates of a 164,000 increase in non-farm payrolls with an unemployment rate of 4.2% it would likely push back the estimate of a 50 basis point cut completely, and all it would take would be an extraordinary infrome for markets to give up the 25 basis points.
Ahead of Friday’s report, other data related to the health of the labor market will be released, starting with Jolts job openings report on Wednesday, which also brings layoff data. Thursday brings ADP data regarding private sector hiring, added with the weekly report on initial jobless claims.
Euro rebounds despite political uncertainty and weak data
In Europe, the EUR/USD rose 0.2% to 1.1967 after touching its lowest level on record since August 19.
Eurozone manufacturing activity remained in the contraction zone in August, with the final eurozone manufacturing purchasing managers’ index by S&P Global at 45.8 in August, well below the 50 mark that separates growth from hiring.
The European Central Bank cut interest rates in June seeking to stimulate the region’s economy, and looks likely to do so again later this month, after eurozone inflation eased to 2.2% in August, the lowest level recorded for three years.
On the political front in Europe, Alternative for Germany (AfD) became with its result in Thuringia the first far-right party to win a state legislative election in the country since World War II.
The faltering authority of Germany’s government could also complicate politics in Europe as the bloc’s other major power, France, continues to struggle to form a government after early elections in June and July.
GBP/USD gained about 0.1% to 1.3138, and sterling remained in demand, supported by expectations that the Bank of England will keep interest rates higher for longer than in the U.S. and eurozone.
The Bank of England cut rates by 25 basis points on August 1, to %%, and money markets expect another 40 basis point cut by the end of this year.
The yen and yuan lose ground after PMI data
Turning to Asia, USD/JPY rose 0.4% to 146.6, with the yen losing ground slightly after Japan’s manufacturing activity contracted again in August, according to a survey released Monday from the private sector.
The final au Jibun Bank Purchasing Managers’ Index for Japan’s manufacturing sector rose to 49.8 in August from 49.1 in July, up from 49.5 in the preliminary reading. It remained below the 50.0 line that separates growth from contraction for two months in a row.
USD/CNY rose 0.3% to 7.1105, and the yuan retreated after China’s purchasing managers’ index data on Saturday provided the first insight into the performance of the world’s second-largest economy, with manufacturing activity sinking to six-month lows and also contracting for the fourth month in a row.
Dollar Awaits Payrolls, Euro Gains
The U.S. currency retreated slightly on Monday amid light trading due to the holiday, as traders await key labor market data as they look for signs of possible interest rate cuts by the Federal Reserve.
This Monday, activity will be minimal due to the U.S. Labor Day vacation.
Dollar Focuses on Payrolls Report
The dollar was able to recover last week after losing about 5% since the beginning of July, and now the focus is on the U.S. employment report due later this week.
U.S. payrolls due on Friday will play a crucial role after Fed Chairman Jerome Powell shifted from fighting inflation to a willingness to guard against job losses, indicating the likelihood of a 25 basis point rate cut by the end of the month.
If the outcome aligns with estimates of a 164,000 increase in non-farm payrolls and an unemployment rate of 4.2%, it would likely eliminate the possibility of a 50 basis point cut, and it would take an extraordinary outcome for markets to abandon the 25 basis point cut.
Ahead of Friday’s report, other data related to the health of the labor market will be released, starting with the JOLTS job openings report on Wednesday, which also includes layoff data. Thursday brings ADP data regarding private sector hiring, along with the weekly report on initial jobless claims.
Euro Rebounds Despite Political Uncertainty and Weak Data
In Europe, the EUR/USD rose 0.2% to 1.1967 after touching its lowest level since August 19.
Eurozone manufacturing activity remained in the contraction zone in August, with the final Eurozone manufacturing Purchasing Managers’ Index by S&P Global at 45.8, well below the 50 mark that separates growth from contraction.
The European Central Bank cut interest rates in June to stimulate the region’s economy and looks likely to do so again later this month, after Eurozone inflation eased to 2.2% in August, the lowest level recorded in three years.
On the political front in Europe, Alternative for Germany (AfD) became the first far-right party to win a state legislative election in the country since World War II, with its result in Thuringia.
The faltering authority of Germany’s government could also complicate politics in Europe as the bloc’s other major power, France, continues to struggle to form a government after early elections in June and July.
GBP/USD gained about 0.1% to 1.3138, and sterling remained in demand, supported by expectations that the Bank of England will keep interest rates higher for longer than in the U.S. and eurozone.
The Bank of England cut rates by 25 basis points on August 1, to 5.0%, and money markets expect another 40 basis point cut by the end of this year.
The Yen and Yuan Lose Ground After PMI Data
Turning to Asia, USD/JPY rose 0.4% to 146.6, with the yen losing ground slightly after Japan’s manufacturing activity contracted again in August, according to a survey released Monday by the private sector.
The final au Jibun Bank Purchasing Managers’ Index for Japan’s manufacturing sector rose to 49.8 in August from 49.1 in July, slightly higher than the preliminary reading of 49.5. It remained below the 50.0 line that separates growth from contraction for two months in a row.
USD/CNY rose 0.3% to 7.1105, and the yuan retreated after China’s Purchasing Managers’ Index data on Saturday provided the first insight into the performance of the world’s second-largest economy, with manufacturing activity sinking to six-month lows and contracting for the fourth consecutive month.
Market Highlights for the Week: Rates, Market, Oil
Friday’s August employment report will focus attention on the short holiday week as markets anticipate the Federal Reserve to start cutting rates later this month. Meanwhile, the Bank of Canada is set to implement another rate cut, oil prices will remain under pressure, and China will release new manufacturing data. Here is a look at what will happen in the markets this week.
Nonfarm Payrolls
The Federal Reserve is preparing to cut interest rates for the first time in years, so investors will be focused on Friday’s August jobs report for signs of how aggressively the central bank might act.
Fed Chairman Jerome Powell has indicated that now is the time to begin cutting interest rates, and many in the markets anticipate the process to begin with a 25 basis point cut at the next meeting on September 17-18.
Any sign of weakness in the labor market could revive fears about a possible recession, which roiled markets in late July and early August. The influence of the Japanese yen carry trade exacerbated the sell-off.
Ahead of Friday’s report, there are other updates on the health of the labor market, starting with Wednesday’s JOLTS job openings report, which also includes data on layoffs. Thursday will bring ADP data on private sector hiring, along with the weekly report on initial jobless claims.
Market Volatility
Wall Street stocks rallied, and the Dow posted its second straight all-time high on Friday on hopes of an imminent interest rate cut by the Federal Reserve.
Markets have rebounded since the massive sell-off in early August, and signs that the rally is broadening are seen as a positive sign for investors uneasy about the concentration in tech stocks.
Investors are also investing in smaller value and small-cap stocks, which are expected to benefit from lower interest rates.
However, according to analysts at Bank of America (BAC), September and October are historically volatile months for stocks, and surprises in economic data could cause further market convulsions.
Bank of Canada to Cut Again
The Bank of Canada is expected to deliver its third straight rate cut when it meets on Wednesday.
The bank has already cut its benchmark rate twice since June to 4.5%, and markets currently expect two more rate cuts this year after September.
Friday’s data indicated that the Canadian economy posted slightly better-than-expected growth in the second quarter, although, in a sign of future weakness, June growth was flat and, according to Statscan’s preliminary estimates, there will be no growth in July either.
Bank of Canada Governor Tiff Macklem hinted after the bank’s July meeting at a shift in focus from fighting inflation to stimulating the economy.
Oil Prices Under Pressure
Oil prices closed the week lower on Friday and added to heavy monthly losses as forecasts for an increase in OPEC+ supply from October weighed on the market.
Brent crude oil futures for October delivery, which expired on Friday, settled USD 1.14 lower at USD 78.80 per barrel, down 0.3% for the week and 2.4% for the month.
U.S. West Texas Intermediate crude oil futures fell USD 2.36 to USD 73.55, down 1.7% for the week and 3.6% for August.
Reuters reported on Friday that OPEC+ is still planning to increase production starting next month, as outages in Libya and cuts announced by some members to offset surplus production mitigate the impact of weak demand.
Uncertainty surrounding the Fed’s expected rate cuts also weighed, as strong consumer spending data on Friday argued against accelerating the pace of easing. Lower rates could stimulate economic growth and oil demand.
U.S. Economic Calendar: Key Events for Crypto in September
Cryptocurrency markets are closely watching several key macroeconomic events in the U.S. this month, which could have a considerable impact on cryptocurrencies.
In particular, the Fed’s interest rate announcements will be a key data point in September. Favorable economic information usually has an impact on investor confidence in the cryptocurrency space. Over the course of the year, traditional financial markets have strengthened, making investors more optimistic about the broader economy, and vice versa.
This could influence risk appetite and ultimately affect interest in alternative assets, including cryptocurrencies.
U.S. Economic Events to Watch in September
Bitcoin (BTC) has further distanced itself from the psychological $60,000 level, maintaining its underperformance despite positive catalysts.
Factors such as increasing institutional adoption, a more positive regulatory backdrop, and expected rate cuts by the Federal Reserve (Fed) have done little to boost BTC’s price.
Bitcoin currently sits more than 20% behind its recent all-time high of nearly $73,500, reached more than five months ago. With the start of the new month, cryptocurrency market traders are keeping a close eye on key developments.
Especially since historical data shows that September has typically been Bitcoin’s lowest-performing period.
Nonfarm Payrolls, Unemployment Rates
Investors will be closely watching the upcoming U.S. nonfarm payrolls (NFP) report, which contains key data regarding job creation and the unemployment rate. The July report revealed lower-than-estimated job growth, with 114,000 jobs added.
This led to an average forecast of 162,000 for August. If the August NFP data is positive and the unemployment rate declines, the economy could rebound. Thus, it could positively influence investor sentiment towards cryptocurrencies.
Employment reports of this type can significantly affect market confidence, risk appetite, and general economic expectations. Ahead of the NFP report, data from the Job Openings and Labor Turnover Survey (JOLTS), to be released on Wednesday, will provide insights into the health of the labor market. A median forecast of 8.1 million job openings in July, down slightly from 8.18 million, could signal a growing economy, increased consumer spending and possible wage growth.
An average projection of 8.1 million job openings in July, slightly below the 8.18 million, could point to a growing economy, increased consumer spending and possible wage growth.
Separately, the ADP National Employment Report, due out Thursday, will provide a snapshot of private sector employment. If the July ADP report exceeds the 122,000 jobs previously added, it would indicate strong job creation and economic growth.
Debate Between Donald Trump and Kamala Harris
On September 10, Republican and Democratic presidential candidates for the upcoming November elections, Donald Trump and Kamala Harris, will participate in a debate. With cryptocurrencies and digital assets becoming crucial campaign issues, this event may cause volatility in the Bitcoin and cryptocurrency markets in general.
Indeed, both parties have shown interest in cryptocurrencies, and Harris appears to be approaching pro-cryptocurrency policies. “They have said that one of the things they need are stable rules, rules of the game… focus on reducing unnecessary red tape and unneeded regulatory bureaucracy… innovative technologies while protecting consumers and creating a stable business environment with consistent and transparent rules of the game,” Bloomberg reported, citing Brian Nelson, a senior adviser to Vice President Harris’s campaign.
On the Republican side, Trump’s team is trying to position the U.S. as the cryptocurrency capital of the world. With both candidates trying to connect with the cryptocurrency community, the debate is expected to be high intensity, especially given Trump’s combative style and Harris’ record as a prosecutor.
U.S. Consumer Price Index (CPI)
U.S. Consumer Price Index (CPI) data for August, scheduled for release on September 11, will be one of the key economic indicators for the month. These data measure the rate of inflation through changes in the prices of consumer goods and services. In July, the CPI inflation rate was 2.9%, down slightly from the 3% recorded in June, according to the U.S. Bureau of Labor Statistics (BLS).
The August CPI data will be critical to see if inflation continues to decelerate, as the Federal Reserve has targeted a 2% inflation rate. If CPI falls below 2.9%, it would indicate that inflation is moving in the positive direction, which could reduce the burden on the Fed to continue to pursue higher interest rates. Ahead of the CPI release, speeches by New York Fed President John C. Williams on September 6 and Fed Governor Christopher Waller will be closely watched.
Possible Bullish Effect
Previously, both have signaled a possible shift toward looser monetary policy as inflation shows signs of easing and the labor market normalizes. If their upcoming interventions demonstrate confidence that the disinflationary trend remains firm, it could be positive for the cryptocurrency market.
Currently, price pressures are easing across the economy, with declines in asset prices, lower housing cost increases and more modest wage growth contributing to a more general reduction in inflation, especially in the services sector. This trend, if prolonged, could have a positive influence on investor confidence, especially in riskier assets such as cryptocurrencies.
US Producer Price Index (PPI)
A day after the release of the CPI data, the U.S. Bureau of Labor Statistics will release Producer Price Index (PPI) inflation data. In July, the PPI registered a more notable easing than expected, providing relief to both stocks and Bitcoin. Notably, the U.S. PPI inflation rate moderated to 2.2% year-over-year in July, below the 2.3% expected and behind the revised 2.7% in the preceding period.
Similarly, core PPI inflation, which excludes food and energy prices, fell to 2.4% y/y in July, also below the 2.7% estimate and well below the previous 3.0%. If the August PPI data, which will be released on September 12, indicates a sustained decline in inflationary pressure, it could stimulate risk appetite among investors, which would favor assets such as Bitcoin and other cryptocurrencies.
Fed Interest Rates
Another key event this month will be the Federal Reserve’s interest rate decision on September 18. At its previous meeting, the Federal Open Market Committee (FOMC) agreed to keep interest rates unchanged, with policymakers voting unanimously to keep the benchmark overnight lending rate between 5.25% and 5.50%.
However, at a recent meeting, Fed Chairman Jerome Powell expressed growing confidence that inflation is on a sustainable path toward the Fed’s 2% target.
Dollar awaits payrolls, euro gains
The U.S. currency retreated slightly on Monday amid light trading due to the holiday, as traders await key labor market data as they look for signs of possible interest rate cuts by the Federal Reserve.
This Monday, activity will be minimal due to the U.S. Labor Day vacation.
Dollar Focuses on Payrolls Report
The dollar was able to recover last week, after having lost about 5% since the beginning of July, and now the focus is on the U.S. employment report due later this week.
U.S. payrolls due on Friday will play a crucial role after Fed Chairman Jerome Powell shifted from fighting inflation to a willingness to guard against job losses, indicating the likelihood of a 25 basis point rate cut by the end of the month.
Should the outcome be in line with estimates of a 164,000 increase in non-farm payrolls with an unemployment rate of 4.2% it would likely push back the estimate of a 50 basis point cut completely, and all it would take would be an extraordinary infrome for markets to give up the 25 basis points.
Ahead of Friday’s report, other data related to the health of the labor market will be released, starting with Jolts job openings report on Wednesday, which also brings layoff data. Thursday brings ADP data regarding private sector hiring, added with the weekly report on initial jobless claims.
Euro rebounds despite political uncertainty and weak data
In Europe, the EUR/USD rose 0.2% to 1.1967 after touching its lowest level on record since August 19.
Eurozone manufacturing activity remained in the contraction zone in August, with the final eurozone manufacturing purchasing managers’ index by S&P Global at 45.8 in August, well below the 50 mark that separates growth from hiring.
The European Central Bank cut interest rates in June seeking to stimulate the region’s economy, and looks likely to do so again later this month, after eurozone inflation eased to 2.2% in August, the lowest level recorded for three years.
On the political front in Europe, Alternative for Germany (AfD) became with its result in Thuringia the first far-right party to win a state legislative election in the country since World War II.
The faltering authority of Germany’s government could also complicate politics in Europe as the bloc’s other major power, France, continues to struggle to form a government after early elections in June and July.
GBP/USD gained about 0.1% to 1.3138, and sterling remained in demand, supported by expectations that the Bank of England will keep interest rates higher for longer than in the U.S. and eurozone.
The Bank of England cut rates by 25 basis points on August 1, to %%, and money markets expect another 40 basis point cut by the end of this year.
The yen and yuan lose ground after PMI data
Turning to Asia, USD/JPY rose 0.4% to 146.6, with the yen losing ground slightly after Japan’s manufacturing activity contracted again in August, according to a survey released Monday from the private sector.
The final au Jibun Bank Purchasing Managers’ Index for Japan’s manufacturing sector rose to 49.8 in August from 49.1 in July, up from 49.5 in the preliminary reading. It remained below the 50.0 line that separates growth from contraction for two months in a row.
USD/CNY rose 0.3% to 7.1105, and the yuan retreated after China’s purchasing managers’ index data on Saturday provided the first insight into the performance of the world’s second-largest economy, with manufacturing activity sinking to six-month lows and also contracting for the fourth month in a row.
Dollar Awaits Payrolls, Euro Gains
The U.S. currency retreated slightly on Monday amid light trading due to the holiday, as traders await key labor market data as they look for signs of possible interest rate cuts by the Federal Reserve.
This Monday, activity will be minimal due to the U.S. Labor Day vacation.
Dollar Focuses on Payrolls Report
The dollar was able to recover last week after losing about 5% since the beginning of July, and now the focus is on the U.S. employment report due later this week.
U.S. payrolls due on Friday will play a crucial role after Fed Chairman Jerome Powell shifted from fighting inflation to a willingness to guard against job losses, indicating the likelihood of a 25 basis point rate cut by the end of the month.
If the outcome aligns with estimates of a 164,000 increase in non-farm payrolls and an unemployment rate of 4.2%, it would likely eliminate the possibility of a 50 basis point cut, and it would take an extraordinary outcome for markets to abandon the 25 basis point cut.
Ahead of Friday’s report, other data related to the health of the labor market will be released, starting with the JOLTS job openings report on Wednesday, which also includes layoff data. Thursday brings ADP data regarding private sector hiring, along with the weekly report on initial jobless claims.
Euro Rebounds Despite Political Uncertainty and Weak Data
In Europe, the EUR/USD rose 0.2% to 1.1967 after touching its lowest level since August 19.
Eurozone manufacturing activity remained in the contraction zone in August, with the final Eurozone manufacturing Purchasing Managers’ Index by S&P Global at 45.8, well below the 50 mark that separates growth from contraction.
The European Central Bank cut interest rates in June to stimulate the region’s economy and looks likely to do so again later this month, after Eurozone inflation eased to 2.2% in August, the lowest level recorded in three years.
On the political front in Europe, Alternative for Germany (AfD) became the first far-right party to win a state legislative election in the country since World War II, with its result in Thuringia.
The faltering authority of Germany’s government could also complicate politics in Europe as the bloc’s other major power, France, continues to struggle to form a government after early elections in June and July.
GBP/USD gained about 0.1% to 1.3138, and sterling remained in demand, supported by expectations that the Bank of England will keep interest rates higher for longer than in the U.S. and eurozone.
The Bank of England cut rates by 25 basis points on August 1, to 5.0%, and money markets expect another 40 basis point cut by the end of this year.
The Yen and Yuan Lose Ground After PMI Data
Turning to Asia, USD/JPY rose 0.4% to 146.6, with the yen losing ground slightly after Japan’s manufacturing activity contracted again in August, according to a survey released Monday by the private sector.
The final au Jibun Bank Purchasing Managers’ Index for Japan’s manufacturing sector rose to 49.8 in August from 49.1 in July, slightly higher than the preliminary reading of 49.5. It remained below the 50.0 line that separates growth from contraction for two months in a row.
USD/CNY rose 0.3% to 7.1105, and the yuan retreated after China’s Purchasing Managers’ Index data on Saturday provided the first insight into the performance of the world’s second-largest economy, with manufacturing activity sinking to six-month lows and contracting for the fourth consecutive month.
Market Highlights for the Week: Rates, Market, Oil
Friday’s August employment report will focus attention on the short holiday week as markets anticipate the Federal Reserve to start cutting rates later this month. Meanwhile, the Bank of Canada is set to implement another rate cut, oil prices will remain under pressure, and China will release new manufacturing data. Here is a look at what will happen in the markets this week.
Nonfarm Payrolls
The Federal Reserve is preparing to cut interest rates for the first time in years, so investors will be focused on Friday’s August jobs report for signs of how aggressively the central bank might act.
Fed Chairman Jerome Powell has indicated that now is the time to begin cutting interest rates, and many in the markets anticipate the process to begin with a 25 basis point cut at the next meeting on September 17-18.
Any sign of weakness in the labor market could revive fears about a possible recession, which roiled markets in late July and early August. The influence of the Japanese yen carry trade exacerbated the sell-off.
Ahead of Friday’s report, there are other updates on the health of the labor market, starting with Wednesday’s JOLTS job openings report, which also includes data on layoffs. Thursday will bring ADP data on private sector hiring, along with the weekly report on initial jobless claims.
Market Volatility
Wall Street stocks rallied, and the Dow posted its second straight all-time high on Friday on hopes of an imminent interest rate cut by the Federal Reserve.
Markets have rebounded since the massive sell-off in early August, and signs that the rally is broadening are seen as a positive sign for investors uneasy about the concentration in tech stocks.
Investors are also investing in smaller value and small-cap stocks, which are expected to benefit from lower interest rates.
However, according to analysts at Bank of America (BAC), September and October are historically volatile months for stocks, and surprises in economic data could cause further market convulsions.
Bank of Canada to Cut Again
The Bank of Canada is expected to deliver its third straight rate cut when it meets on Wednesday.
The bank has already cut its benchmark rate twice since June to 4.5%, and markets currently expect two more rate cuts this year after September.
Friday’s data indicated that the Canadian economy posted slightly better-than-expected growth in the second quarter, although, in a sign of future weakness, June growth was flat and, according to Statscan’s preliminary estimates, there will be no growth in July either.
Bank of Canada Governor Tiff Macklem hinted after the bank’s July meeting at a shift in focus from fighting inflation to stimulating the economy.
Oil Prices Under Pressure
Oil prices closed the week lower on Friday and added to heavy monthly losses as forecasts for an increase in OPEC+ supply from October weighed on the market.
Brent crude oil futures for October delivery, which expired on Friday, settled USD 1.14 lower at USD 78.80 per barrel, down 0.3% for the week and 2.4% for the month.
U.S. West Texas Intermediate crude oil futures fell USD 2.36 to USD 73.55, down 1.7% for the week and 3.6% for August.
Reuters reported on Friday that OPEC+ is still planning to increase production starting next month, as outages in Libya and cuts announced by some members to offset surplus production mitigate the impact of weak demand.
Uncertainty surrounding the Fed’s expected rate cuts also weighed, as strong consumer spending data on Friday argued against accelerating the pace of easing. Lower rates could stimulate economic growth and oil demand.
U.S. Economic Calendar: Key Events for Crypto in September
Cryptocurrency markets are closely watching several key macroeconomic events in the U.S. this month, which could have a considerable impact on cryptocurrencies.
In particular, the Fed’s interest rate announcements will be a key data point in September. Favorable economic information usually has an impact on investor confidence in the cryptocurrency space. Over the course of the year, traditional financial markets have strengthened, making investors more optimistic about the broader economy, and vice versa.
This could influence risk appetite and ultimately affect interest in alternative assets, including cryptocurrencies.
U.S. Economic Events to Watch in September
Bitcoin (BTC) has further distanced itself from the psychological $60,000 level, maintaining its underperformance despite positive catalysts.
Factors such as increasing institutional adoption, a more positive regulatory backdrop, and expected rate cuts by the Federal Reserve (Fed) have done little to boost BTC’s price.
Bitcoin currently sits more than 20% behind its recent all-time high of nearly $73,500, reached more than five months ago. With the start of the new month, cryptocurrency market traders are keeping a close eye on key developments.
Especially since historical data shows that September has typically been Bitcoin’s lowest-performing period.
Nonfarm Payrolls, Unemployment Rates
Investors will be closely watching the upcoming U.S. nonfarm payrolls (NFP) report, which contains key data regarding job creation and the unemployment rate. The July report revealed lower-than-estimated job growth, with 114,000 jobs added.
This led to an average forecast of 162,000 for August. If the August NFP data is positive and the unemployment rate declines, the economy could rebound. Thus, it could positively influence investor sentiment towards cryptocurrencies.
Employment reports of this type can significantly affect market confidence, risk appetite, and general economic expectations. Ahead of the NFP report, data from the Job Openings and Labor Turnover Survey (JOLTS), to be released on Wednesday, will provide insights into the health of the labor market. A median forecast of 8.1 million job openings in July, down slightly from 8.18 million, could signal a growing economy, increased consumer spending and possible wage growth.
An average projection of 8.1 million job openings in July, slightly below the 8.18 million, could point to a growing economy, increased consumer spending and possible wage growth.
Separately, the ADP National Employment Report, due out Thursday, will provide a snapshot of private sector employment. If the July ADP report exceeds the 122,000 jobs previously added, it would indicate strong job creation and economic growth.
Debate Between Donald Trump and Kamala Harris
On September 10, Republican and Democratic presidential candidates for the upcoming November elections, Donald Trump and Kamala Harris, will participate in a debate. With cryptocurrencies and digital assets becoming crucial campaign issues, this event may cause volatility in the Bitcoin and cryptocurrency markets in general.
Indeed, both parties have shown interest in cryptocurrencies, and Harris appears to be approaching pro-cryptocurrency policies. “They have said that one of the things they need are stable rules, rules of the game… focus on reducing unnecessary red tape and unneeded regulatory bureaucracy… innovative technologies while protecting consumers and creating a stable business environment with consistent and transparent rules of the game,” Bloomberg reported, citing Brian Nelson, a senior adviser to Vice President Harris’s campaign.
On the Republican side, Trump’s team is trying to position the U.S. as the cryptocurrency capital of the world. With both candidates trying to connect with the cryptocurrency community, the debate is expected to be high intensity, especially given Trump’s combative style and Harris’ record as a prosecutor.
U.S. Consumer Price Index (CPI)
U.S. Consumer Price Index (CPI) data for August, scheduled for release on September 11, will be one of the key economic indicators for the month. These data measure the rate of inflation through changes in the prices of consumer goods and services. In July, the CPI inflation rate was 2.9%, down slightly from the 3% recorded in June, according to the U.S. Bureau of Labor Statistics (BLS).
The August CPI data will be critical to see if inflation continues to decelerate, as the Federal Reserve has targeted a 2% inflation rate. If CPI falls below 2.9%, it would indicate that inflation is moving in the positive direction, which could reduce the burden on the Fed to continue to pursue higher interest rates. Ahead of the CPI release, speeches by New York Fed President John C. Williams on September 6 and Fed Governor Christopher Waller will be closely watched.
Possible Bullish Effect
Previously, both have signaled a possible shift toward looser monetary policy as inflation shows signs of easing and the labor market normalizes. If their upcoming interventions demonstrate confidence that the disinflationary trend remains firm, it could be positive for the cryptocurrency market.
Currently, price pressures are easing across the economy, with declines in asset prices, lower housing cost increases and more modest wage growth contributing to a more general reduction in inflation, especially in the services sector. This trend, if prolonged, could have a positive influence on investor confidence, especially in riskier assets such as cryptocurrencies.
US Producer Price Index (PPI)
A day after the release of the CPI data, the U.S. Bureau of Labor Statistics will release Producer Price Index (PPI) inflation data. In July, the PPI registered a more notable easing than expected, providing relief to both stocks and Bitcoin. Notably, the U.S. PPI inflation rate moderated to 2.2% year-over-year in July, below the 2.3% expected and behind the revised 2.7% in the preceding period.
Similarly, core PPI inflation, which excludes food and energy prices, fell to 2.4% y/y in July, also below the 2.7% estimate and well below the previous 3.0%. If the August PPI data, which will be released on September 12, indicates a sustained decline in inflationary pressure, it could stimulate risk appetite among investors, which would favor assets such as Bitcoin and other cryptocurrencies.
Fed Interest Rates
Another key event this month will be the Federal Reserve’s interest rate decision on September 18. At its previous meeting, the Federal Open Market Committee (FOMC) agreed to keep interest rates unchanged, with policymakers voting unanimously to keep the benchmark overnight lending rate between 5.25% and 5.50%.
However, at a recent meeting, Fed Chairman Jerome Powell expressed growing confidence that inflation is on a sustainable path toward the Fed’s 2% target.
September on Wall Street: Why Should Caution Be Exercised?
September, known as the most dreaded month on Wall Street, is just beginning. What can we expect this month in the U.S. stock market?
What Has Happened
According to Bloomberg Line, September has been, on average, the worst month of the year for the U.S. stock market for about 75 years, with the S&P 500 index and its predecessor, the S&P 90, losing an average of about 0.87% in September, as stated in a report released by Swiss financial holding company Mirabaud.
The report also indicates that the September effect is not limited to U.S. stocks alone, but is also linked to certain global markets. Some analysts estimate that the negative effect on markets is generated by a seasonal behavioral bias, where investors move their portfolios as the summer winds down to cash in.
The study also mentions that most mutual funds sell their assets to recover tax losses at the end of their fiscal year in September. Additionally, the last two weeks of September have historically been the worst since 1950.
The report highlights that in presidential election years, such as 2024, the average level of market volatility has been higher in the month and in the three months leading up to the election. It should not be forgotten that in September 2024, central bank meetings may be more decisive than before.
Why It Is Relevant
The September effect is a phenomenon that investors should keep in mind when planning their investment strategies. According to Mirabaud, investors can expect to use weak months as an entry point if they are looking for long-term positions.
However, they should also be prepared for the possibility of increased volatility, especially in a year with presidential elections and central bank meetings around the corner.
Dollar awaits payrolls, euro gains
The U.S. currency retreated slightly on Monday amid light trading due to the holiday, as traders await key labor market data as they look for signs of possible interest rate cuts by the Federal Reserve.
This Monday, activity will be minimal due to the U.S. Labor Day vacation.
Dollar Focuses on Payrolls Report
The dollar was able to recover last week, after having lost about 5% since the beginning of July, and now the focus is on the U.S. employment report due later this week.
U.S. payrolls due on Friday will play a crucial role after Fed Chairman Jerome Powell shifted from fighting inflation to a willingness to guard against job losses, indicating the likelihood of a 25 basis point rate cut by the end of the month.
Should the outcome be in line with estimates of a 164,000 increase in non-farm payrolls with an unemployment rate of 4.2% it would likely push back the estimate of a 50 basis point cut completely, and all it would take would be an extraordinary infrome for markets to give up the 25 basis points.
Ahead of Friday’s report, other data related to the health of the labor market will be released, starting with Jolts job openings report on Wednesday, which also brings layoff data. Thursday brings ADP data regarding private sector hiring, added with the weekly report on initial jobless claims.
Euro rebounds despite political uncertainty and weak data
In Europe, the EUR/USD rose 0.2% to 1.1967 after touching its lowest level on record since August 19.
Eurozone manufacturing activity remained in the contraction zone in August, with the final eurozone manufacturing purchasing managers’ index by S&P Global at 45.8 in August, well below the 50 mark that separates growth from hiring.
The European Central Bank cut interest rates in June seeking to stimulate the region’s economy, and looks likely to do so again later this month, after eurozone inflation eased to 2.2% in August, the lowest level recorded for three years.
On the political front in Europe, Alternative for Germany (AfD) became with its result in Thuringia the first far-right party to win a state legislative election in the country since World War II.
The faltering authority of Germany’s government could also complicate politics in Europe as the bloc’s other major power, France, continues to struggle to form a government after early elections in June and July.
GBP/USD gained about 0.1% to 1.3138, and sterling remained in demand, supported by expectations that the Bank of England will keep interest rates higher for longer than in the U.S. and eurozone.
The Bank of England cut rates by 25 basis points on August 1, to %%, and money markets expect another 40 basis point cut by the end of this year.
The yen and yuan lose ground after PMI data
Turning to Asia, USD/JPY rose 0.4% to 146.6, with the yen losing ground slightly after Japan’s manufacturing activity contracted again in August, according to a survey released Monday from the private sector.
The final au Jibun Bank Purchasing Managers’ Index for Japan’s manufacturing sector rose to 49.8 in August from 49.1 in July, up from 49.5 in the preliminary reading. It remained below the 50.0 line that separates growth from contraction for two months in a row.
USD/CNY rose 0.3% to 7.1105, and the yuan retreated after China’s purchasing managers’ index data on Saturday provided the first insight into the performance of the world’s second-largest economy, with manufacturing activity sinking to six-month lows and also contracting for the fourth month in a row.
Dollar Awaits Payrolls, Euro Gains
The U.S. currency retreated slightly on Monday amid light trading due to the holiday, as traders await key labor market data as they look for signs of possible interest rate cuts by the Federal Reserve.
This Monday, activity will be minimal due to the U.S. Labor Day vacation.
Dollar Focuses on Payrolls Report
The dollar was able to recover last week after losing about 5% since the beginning of July, and now the focus is on the U.S. employment report due later this week.
U.S. payrolls due on Friday will play a crucial role after Fed Chairman Jerome Powell shifted from fighting inflation to a willingness to guard against job losses, indicating the likelihood of a 25 basis point rate cut by the end of the month.
If the outcome aligns with estimates of a 164,000 increase in non-farm payrolls and an unemployment rate of 4.2%, it would likely eliminate the possibility of a 50 basis point cut, and it would take an extraordinary outcome for markets to abandon the 25 basis point cut.
Ahead of Friday’s report, other data related to the health of the labor market will be released, starting with the JOLTS job openings report on Wednesday, which also includes layoff data. Thursday brings ADP data regarding private sector hiring, along with the weekly report on initial jobless claims.
Euro Rebounds Despite Political Uncertainty and Weak Data
In Europe, the EUR/USD rose 0.2% to 1.1967 after touching its lowest level since August 19.
Eurozone manufacturing activity remained in the contraction zone in August, with the final Eurozone manufacturing Purchasing Managers’ Index by S&P Global at 45.8, well below the 50 mark that separates growth from contraction.
The European Central Bank cut interest rates in June to stimulate the region’s economy and looks likely to do so again later this month, after Eurozone inflation eased to 2.2% in August, the lowest level recorded in three years.
On the political front in Europe, Alternative for Germany (AfD) became the first far-right party to win a state legislative election in the country since World War II, with its result in Thuringia.
The faltering authority of Germany’s government could also complicate politics in Europe as the bloc’s other major power, France, continues to struggle to form a government after early elections in June and July.
GBP/USD gained about 0.1% to 1.3138, and sterling remained in demand, supported by expectations that the Bank of England will keep interest rates higher for longer than in the U.S. and eurozone.
The Bank of England cut rates by 25 basis points on August 1, to 5.0%, and money markets expect another 40 basis point cut by the end of this year.
The Yen and Yuan Lose Ground After PMI Data
Turning to Asia, USD/JPY rose 0.4% to 146.6, with the yen losing ground slightly after Japan’s manufacturing activity contracted again in August, according to a survey released Monday by the private sector.
The final au Jibun Bank Purchasing Managers’ Index for Japan’s manufacturing sector rose to 49.8 in August from 49.1 in July, slightly higher than the preliminary reading of 49.5. It remained below the 50.0 line that separates growth from contraction for two months in a row.
USD/CNY rose 0.3% to 7.1105, and the yuan retreated after China’s Purchasing Managers’ Index data on Saturday provided the first insight into the performance of the world’s second-largest economy, with manufacturing activity sinking to six-month lows and contracting for the fourth consecutive month.
Market Highlights for the Week: Rates, Market, Oil
Friday’s August employment report will focus attention on the short holiday week as markets anticipate the Federal Reserve to start cutting rates later this month. Meanwhile, the Bank of Canada is set to implement another rate cut, oil prices will remain under pressure, and China will release new manufacturing data. Here is a look at what will happen in the markets this week.
Nonfarm Payrolls
The Federal Reserve is preparing to cut interest rates for the first time in years, so investors will be focused on Friday’s August jobs report for signs of how aggressively the central bank might act.
Fed Chairman Jerome Powell has indicated that now is the time to begin cutting interest rates, and many in the markets anticipate the process to begin with a 25 basis point cut at the next meeting on September 17-18.
Any sign of weakness in the labor market could revive fears about a possible recession, which roiled markets in late July and early August. The influence of the Japanese yen carry trade exacerbated the sell-off.
Ahead of Friday’s report, there are other updates on the health of the labor market, starting with Wednesday’s JOLTS job openings report, which also includes data on layoffs. Thursday will bring ADP data on private sector hiring, along with the weekly report on initial jobless claims.
Market Volatility
Wall Street stocks rallied, and the Dow posted its second straight all-time high on Friday on hopes of an imminent interest rate cut by the Federal Reserve.
Markets have rebounded since the massive sell-off in early August, and signs that the rally is broadening are seen as a positive sign for investors uneasy about the concentration in tech stocks.
Investors are also investing in smaller value and small-cap stocks, which are expected to benefit from lower interest rates.
However, according to analysts at Bank of America (BAC), September and October are historically volatile months for stocks, and surprises in economic data could cause further market convulsions.
Bank of Canada to Cut Again
The Bank of Canada is expected to deliver its third straight rate cut when it meets on Wednesday.
The bank has already cut its benchmark rate twice since June to 4.5%, and markets currently expect two more rate cuts this year after September.
Friday’s data indicated that the Canadian economy posted slightly better-than-expected growth in the second quarter, although, in a sign of future weakness, June growth was flat and, according to Statscan’s preliminary estimates, there will be no growth in July either.
Bank of Canada Governor Tiff Macklem hinted after the bank’s July meeting at a shift in focus from fighting inflation to stimulating the economy.
Oil Prices Under Pressure
Oil prices closed the week lower on Friday and added to heavy monthly losses as forecasts for an increase in OPEC+ supply from October weighed on the market.
Brent crude oil futures for October delivery, which expired on Friday, settled USD 1.14 lower at USD 78.80 per barrel, down 0.3% for the week and 2.4% for the month.
U.S. West Texas Intermediate crude oil futures fell USD 2.36 to USD 73.55, down 1.7% for the week and 3.6% for August.
Reuters reported on Friday that OPEC+ is still planning to increase production starting next month, as outages in Libya and cuts announced by some members to offset surplus production mitigate the impact of weak demand.
Uncertainty surrounding the Fed’s expected rate cuts also weighed, as strong consumer spending data on Friday argued against accelerating the pace of easing. Lower rates could stimulate economic growth and oil demand.
U.S. Economic Calendar: Key Events for Crypto in September
Cryptocurrency markets are closely watching several key macroeconomic events in the U.S. this month, which could have a considerable impact on cryptocurrencies.
In particular, the Fed’s interest rate announcements will be a key data point in September. Favorable economic information usually has an impact on investor confidence in the cryptocurrency space. Over the course of the year, traditional financial markets have strengthened, making investors more optimistic about the broader economy, and vice versa.
This could influence risk appetite and ultimately affect interest in alternative assets, including cryptocurrencies.
U.S. Economic Events to Watch in September
Bitcoin (BTC) has further distanced itself from the psychological $60,000 level, maintaining its underperformance despite positive catalysts.
Factors such as increasing institutional adoption, a more positive regulatory backdrop, and expected rate cuts by the Federal Reserve (Fed) have done little to boost BTC’s price.
Bitcoin currently sits more than 20% behind its recent all-time high of nearly $73,500, reached more than five months ago. With the start of the new month, cryptocurrency market traders are keeping a close eye on key developments.
Especially since historical data shows that September has typically been Bitcoin’s lowest-performing period.
Nonfarm Payrolls, Unemployment Rates
Investors will be closely watching the upcoming U.S. nonfarm payrolls (NFP) report, which contains key data regarding job creation and the unemployment rate. The July report revealed lower-than-estimated job growth, with 114,000 jobs added.
This led to an average forecast of 162,000 for August. If the August NFP data is positive and the unemployment rate declines, the economy could rebound. Thus, it could positively influence investor sentiment towards cryptocurrencies.
Employment reports of this type can significantly affect market confidence, risk appetite, and general economic expectations. Ahead of the NFP report, data from the Job Openings and Labor Turnover Survey (JOLTS), to be released on Wednesday, will provide insights into the health of the labor market. A median forecast of 8.1 million job openings in July, down slightly from 8.18 million, could signal a growing economy, increased consumer spending and possible wage growth.
An average projection of 8.1 million job openings in July, slightly below the 8.18 million, could point to a growing economy, increased consumer spending and possible wage growth.
Separately, the ADP National Employment Report, due out Thursday, will provide a snapshot of private sector employment. If the July ADP report exceeds the 122,000 jobs previously added, it would indicate strong job creation and economic growth.
Debate Between Donald Trump and Kamala Harris
On September 10, Republican and Democratic presidential candidates for the upcoming November elections, Donald Trump and Kamala Harris, will participate in a debate. With cryptocurrencies and digital assets becoming crucial campaign issues, this event may cause volatility in the Bitcoin and cryptocurrency markets in general.
Indeed, both parties have shown interest in cryptocurrencies, and Harris appears to be approaching pro-cryptocurrency policies. “They have said that one of the things they need are stable rules, rules of the game… focus on reducing unnecessary red tape and unneeded regulatory bureaucracy… innovative technologies while protecting consumers and creating a stable business environment with consistent and transparent rules of the game,” Bloomberg reported, citing Brian Nelson, a senior adviser to Vice President Harris’s campaign.
On the Republican side, Trump’s team is trying to position the U.S. as the cryptocurrency capital of the world. With both candidates trying to connect with the cryptocurrency community, the debate is expected to be high intensity, especially given Trump’s combative style and Harris’ record as a prosecutor.
U.S. Consumer Price Index (CPI)
U.S. Consumer Price Index (CPI) data for August, scheduled for release on September 11, will be one of the key economic indicators for the month. These data measure the rate of inflation through changes in the prices of consumer goods and services. In July, the CPI inflation rate was 2.9%, down slightly from the 3% recorded in June, according to the U.S. Bureau of Labor Statistics (BLS).
The August CPI data will be critical to see if inflation continues to decelerate, as the Federal Reserve has targeted a 2% inflation rate. If CPI falls below 2.9%, it would indicate that inflation is moving in the positive direction, which could reduce the burden on the Fed to continue to pursue higher interest rates. Ahead of the CPI release, speeches by New York Fed President John C. Williams on September 6 and Fed Governor Christopher Waller will be closely watched.
Possible Bullish Effect
Previously, both have signaled a possible shift toward looser monetary policy as inflation shows signs of easing and the labor market normalizes. If their upcoming interventions demonstrate confidence that the disinflationary trend remains firm, it could be positive for the cryptocurrency market.
Currently, price pressures are easing across the economy, with declines in asset prices, lower housing cost increases and more modest wage growth contributing to a more general reduction in inflation, especially in the services sector. This trend, if prolonged, could have a positive influence on investor confidence, especially in riskier assets such as cryptocurrencies.
US Producer Price Index (PPI)
A day after the release of the CPI data, the U.S. Bureau of Labor Statistics will release Producer Price Index (PPI) inflation data. In July, the PPI registered a more notable easing than expected, providing relief to both stocks and Bitcoin. Notably, the U.S. PPI inflation rate moderated to 2.2% year-over-year in July, below the 2.3% expected and behind the revised 2.7% in the preceding period.
Similarly, core PPI inflation, which excludes food and energy prices, fell to 2.4% y/y in July, also below the 2.7% estimate and well below the previous 3.0%. If the August PPI data, which will be released on September 12, indicates a sustained decline in inflationary pressure, it could stimulate risk appetite among investors, which would favor assets such as Bitcoin and other cryptocurrencies.
Fed Interest Rates
Another key event this month will be the Federal Reserve’s interest rate decision on September 18. At its previous meeting, the Federal Open Market Committee (FOMC) agreed to keep interest rates unchanged, with policymakers voting unanimously to keep the benchmark overnight lending rate between 5.25% and 5.50%.
However, at a recent meeting, Fed Chairman Jerome Powell expressed growing confidence that inflation is on a sustainable path toward the Fed’s 2% target.
September on Wall Street: Why Should Caution Be Exercised?
September, known as the most dreaded month on Wall Street, is just beginning. What can we expect this month in the U.S. stock market?
What Has Happened
According to Bloomberg Line, September has been, on average, the worst month of the year for the U.S. stock market for about 75 years, with the S&P 500 index and its predecessor, the S&P 90, losing an average of about 0.87% in September, as stated in a report released by Swiss financial holding company Mirabaud.
The report also indicates that the September effect is not limited to U.S. stocks alone, but is also linked to certain global markets. Some analysts estimate that the negative effect on markets is generated by a seasonal behavioral bias, where investors move their portfolios as the summer winds down to cash in.
The study also mentions that most mutual funds sell their assets to recover tax losses at the end of their fiscal year in September. Additionally, the last two weeks of September have historically been the worst since 1950.
The report highlights that in presidential election years, such as 2024, the average level of market volatility has been higher in the month and in the three months leading up to the election. It should not be forgotten that in September 2024, central bank meetings may be more decisive than before.
Why It Is Relevant
The September effect is a phenomenon that investors should keep in mind when planning their investment strategies. According to Mirabaud, investors can expect to use weak months as an entry point if they are looking for long-term positions.
However, they should also be prepared for the possibility of increased volatility, especially in a year with presidential elections and central bank meetings around the corner.
Dollar Is Calm Ahead of ISM Release and Labor Market Data
The U.S. dollar is calm on Tuesday as investors await key economic data, including Friday’s payrolls report, which could set the stage for a rate cut by the Federal Reserve later this month.
Dollar Focuses on Labor Market
The U.S. ISM manufacturing survey, due later in the session, is the first major indicator in a week full of U.S. data and is likely to show that the country’s manufacturing sector is still in contraction territory.
However, the labor market will be in the spotlight this week, as Fed policymakers seek confirmation that it is time to begin easing monetary policy, particularly after Fed Chairman Jerome Powell last month backed an imminent start to interest rate cuts due to labor market concerns.
Friday’s nonfarm payrolls release will be the key data of the week, especially since last month’s jobs report missed estimates, prompting a sharp sell-off in equity markets on fears of a recession.
Job openings are released on Wednesday, and jobless claims on Thursday.
Markets are currently estimating about a 69% chance of a 25 basis point cut when the Fed holds its scheduled meeting on September 17-18, with a 31% chance of a 50 basis point cut, as indicated by CME’s FedWatch tool.
Euro nears two-week lows
In Europe, EUR/USD was down about 0.1% to 1.1061 not far from the two-week low of 1.1042 it touched last session, after data indicated that eurozone manufacturing activity remained in the contraction zone during August.
The European Central Bank cut interest rates in June and looks likely to do so again later this year, especially after eurozone inflation fell to 2.2% in August, the lowest level in more than three years.
Traders are also paying attention to the uncertain political situation in Germany, after Alternative for Germany became the first far-right party to win a state legislative election in Germany since World War II.
GBP/USD lost about 0.2% to 1.3129, with the UK calendar very quiet this week.
Sterling had a strong August, and has gained nearly more than 2% over the past month, supported by estimates that the Bank of England will keep interest rates high for much longer than in the U.S. and eurozone.
The yen rebounds
Turning to Asia, the USD/JPY persisted 0.6% to 146.03, retreating from a two-week high of 147.16 reached on Monday, after data showed that Japanese factory activity contracted again in August, according to a private sector survey.
USD/CNY traded flat at 7.1161 while AUD/USD was down 0.6% at 0.6750 ahead of the Australian gross domestic product report due on Wednesday.
