Jobs Report: Mediocre Wage Gain Could Slow Hikes, Boost Crypto
Below is eToro's market commentary about traditional stocks and crypto markets from Mati Greenspan, Senior Market Analyst at eToro, the world's leading social trading platform.
- Recent Poll Shows Brexit Stoking Market Fears: A recent poll from Goldman Sachs showed that 48% of respondents said that Brexit was their main focus in April. Given that markets have tended to ignore Brexit lately, Q1 earnings figures will likely be more significant in driving prices.
- Slow Wage Gain Could Benefit Crypto: Mediocre wage gain shown in March’s jobs report only gives the Fed more reason to be patient with wage increases and monetary tightening. As we've seen in the past, a dovish Fed is positive for risk assets, including crypto.
- Wall Street Increases Crypto Exposure: CME bitcoin futures volumes reached about $563 million yesterday, compared to the $685 million seen across the 10 top crypto exchanges. Although the CME's contracts are cash-settled and no Bitcoin is actually changing hands, Wall Street needs to be seen as a significant part of the market now.
- XRP Joins in Rally: XRP is seeing double-digit gains today after failing to join in the crypto rally earlier this week. Meanwhile in the broader crypto market.
One of my favorite investors in the traditional markets is Howard Marks from Oaktree Capital, he always manages to put things into perspective.
In a recent memo to investors called growing the pie, Marks goes into great detail of everything that he believes is going wrong in US politics at the moment and how it's influencing the markets.
What struck me, was that in the entire eight pages of brilliance and laying out all of the major risks, the words 'tariff' and 'trade' do not even appear. To me, this is a clear sign that what ails the United States at the moment is deep beneath the headlines.
Indeed, for me anyway, global politics is becoming less of a concern by the day. In a recent poll from Goldman Sachs, 48% of respondents said that Brexit was their biggest focus in April.
Given my limited knowledge of Brexit however, as a macro investor, I'm actually trying to limit focus on it wherever possible. Yes, the headlines and deadlines are important, but unless they start moving the markets in a meaningful way I don't see much point in making it my main focus.
By the way, my answer was 'J'. What drives the markets at the end of the day are profits. If companies are or are not making profits the markets will respond to that, and so will answers A, B, C, D, E, F, I, K, and L.
As you probably know, the US jobs report known as NFP, is the most anticipated report that comes out every month. It's been known to move every asset from currencies, to commodities, and of course stocks. Given Wall Street's increasing participation in the crypto market lately, I wouldn't be surprised if Bitcoin moves due to it today, as well.
**UPDATE 8:30 a.m.: “Mediocre wage gain only gives the Fed more reason to be patient with wage increases and monetary tightening. As we've seen in the past, a dovish Fed is positive for risk assets, including crypto.”
Here we can see the volumes on CME's bitcoin futures product, which reached 22,542 contracts yesterday, which is about $563 million.
According to Messari, the top 10 real exchanges traded about $685 million over the last 24 hours. So even though the CME's contracts are cash settled and no Bitcoin is actually changing hands, Wall Street needs to be seen as a significant part of the market now.
You can check the results as they come out on sites like forexfactory.com or fxstreet's economic calendar, or of course by following financial people/news on social media.
XRP has its Day
Way to go!! Glad to see some double digit gains there.
Kicking off the event, three of the biggest names in crypto - Adam Back, Tone Vays and Giacomo Zucco - joined my favorite crypto anchor Jessica Walker for an excellent panel discussion. Watch it here.
Spoiler alert. Tone Vays is still bearish, while Adam and Giacomo are taking a more long term outlook.
Have a fantastic weekend!!
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