5/5/2023 0 Comments Medium fade![]() With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. ![]() Opinions are the authors not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. ![]() It is not investment advice or a solution to buy or sell securities. This article is for general information purposes only. After an ADP employment change report and ISM Services Index, traders were quickly reminded that the economy isn’t falling off a cliff and that the Fed might have to remain aggressive with its rate hiking cycle next year.īitcoin’s fundamentals still support a healthy consolidation here and that should remain the case as long as we don’t see a double dose of robust hiring on Friday and much hotter-than-expected inflation next week. The strong start to October is over and markets were quickly reminded that Fed pivot calls were premature once again. Reversal Wednesday is here and risk aversion has taken bitcoin tentatively below the $20,000 level. The early October rally might completely fade if the nonfarm payroll shows steady hiring and continued wage pressures. Traders might be disappointed if they were hoping for a sharp deterioration in hiring with the nonfarm payroll report. The ISM Services employment index rose sharply to the highest levels since March. The ADP report showed the goods-producing sector lost 29,000 jobs, while service-providing jobs showed a gain of 237,000 positions. Hiring is slowing, but it seems the service sector is still holding up. After a couple of downbeat labor data readings, the ISM manufacturing employment component fell into contraction and JOLTS data lost over a million job openings, Wall Street was starting to grow confident that a labor market slowdown had arrived. Inflation is still the driving focus and that data is not softening quickly enough.Ī private payrolls report showed 208,000 jobs were created in September, roughly in line with the 200,000 consensus estimate. īefore the end of the year, but definitely not this month, the Fed will temper its hawkish stance. If we continue to see resilience in the service sector, the Fed may have to remain aggressive with its rate hiking cycle. Deteriorating economic data is needed to drive down inflation and for the Fed to consider a slower pace of tightening. The strong start to October is over after both a private payroll report and service sector data reminded investors how strong some parts of the economy remain. The economy is too strong for the Fed to pivot.
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