Macro Hints No Party for Crypto Yet

The markets were expecting critical data from the U.S. regarding the current state of employment and the average hourly earnings to understand the FED's stance on the current interest rates and the inflation of the U.S. dollar.

The data, unfortunately, came worse than what had been estimated by the investors and fund managers. For many investors, staying at the current interest rate range, 5.25 - 5.50, will not change in the next FOMC meeting that will be held on May 1st. What we all expect is the FOMC decision on June 12th.

As of writing, the expectation of a rate cut in May is as low as 7% while the probability of an interest rate cut in June is around 50%! This is not a terrible case considering the amount of time we have until the meeting in June.

Meanwhile, let's see what has been shaking the market since the morning.

Unemployment & Hourly Earning Data

The FED wants people to lose their jobs, but not as many as that may bring recession in the economy. As the people lose their jobs, the demand for things goes lower for the households.

Economic Calendar

The average hourly earnings data was to the point; it came as expected.
In terms of the unemployment rate and the nonfarm payrolls, they were beyond the estimations. First of all, the payroll data signs a strong economy that generates inflation. This is what we have been suffering over the last two years according to the FED's perspective.

On the other hand, the unemployment rate needs to go up so that we can firmly believe that the people will limit their expenditures when they lose their job or they face such a risk. However, when they finish printing money, we see that the inflation tends to go lower.

The OIL Attack on Markets

There is a simple mathematical method of estimating upcoming waves of inflation around the globe: check the price of energy sources.

If the prices of inputs go up, the outputs can never stay as low as before. Thus, we all need to watch what is happening on the side of Brent Oil to understand the impacts on our lives and the markets.

I had been holding Brent Oil position since May 2023 but it was not highly volatile back then. Yet, the attack on the oil production centers and the global risks in the trade ways push the price of Brent Oil to the ceiling.

I think $96 will be a strong resistance to close my position. Yet, if the price breaks out of that resistance level, we may need to postpone the expectations of interest rate cuts by the FED. Please keep in mind that all the things we mention are only related to the direction or sentiment of the markets in the short and mid - term. The long term is always promising for our tech - driven infant market.

What do you think about the recent updates on the macroeconomic side?

Share your thoughts below 👇

Hive On ✌️

Posted Using InLeo Alpha