- A major divergence between the bullish S&P and bearish ISM manufacturing reports is confusing the market
- This conflicting macro data is a major headwind for a potential September crypto rally
- Analysts see Friday’s jobs report as the key “tie-breaker” that will decide the market’s direction
This week marks one of the most eventful stretches of the summer for financial markets, with a series of US economic reports set to shape the Federal Reserve’s outlook on interest rates. For crypto traders, each release could mean swings in liquidity, sentiment, and volatility.
S&P Global Manufacturing PMI Data
One of the more notable metrics is the S&P Global Manufacturing PMI, a monthly report from S&P Global that provides a snapshot of business activity in the manufacturing sector. It has been running strong, climbing to 53.3 in August, which is its highest level since 2022.
A reading above 50 indicates expansion, suggesting that factories are hiring, producing, and taking on new orders. This is also in favor of US dollars and treasuries, and as such, can put pressure on Bitcoin and other cryptocurrencies.
Related: Three Reasons Bitcoin Could Reach $200K by Late 2025
The bearish ISM manufacturing PMI data
On the other hand, the ISM Manufacturing PMI (investors often pay more attention to this one) painted a different picture last month at 49.0, signaling mild contraction. Generally speaking, markets tend to react more strongly to ISM data, and if it continues to underperform, traders may see it as an early sign of economic weakness.
A divergence between the S&P and ISM surveys could cause confusion and volatility across the markets, including crypto.
Then, the JOLTS report, which tracks job openings, is expected to be released midweek. The previous report already showed signs of cooling, with openings falling to 7.4 million, the lowest in years. A weaker JOLTS figure would confirm that companies are slowing down on hiring, a trend that the Fed will likely be watching closely.
Friday is the most important part of the week
Friday will be the climax of the week with the release of the US jobs report. It tracks Nonfarm Payrolls (jobs added), Unemployment Rate, and Wages. A disappointing jobs report would reinforce the argument for a September interest rate cut, a development that tends to benefit cryptocurrencies.
In terms of crypto, this is a big week considering it’s dominated by major economic events that could introduce notable volatility into the market.
What is the bottom line for crypto traders
Strong manufacturing and labor data may keep the dollar strong and yields elevated, putting short-term pressure on crypto prices. However, signs of a cooling labor market would be viewed as fuel for a potential Fed pivot, which could very well favor the cryptocurrencies.
Related: The Market is Rotating to Altcoins. Here Are Two Under $1 to Watch
Regardless of how the wind ends up blowing, this week could serve as a turning point for both Wall Street and the blockchain markets.
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