Crypto Catalyst Watch: FOMC Minutes, Jobs Numbers Lead Busy Slate of Economic Releases

The shortened U.S. holiday week means a somewhat compressed schedule of economic data that could affect the inflation and interest rate outlook, and thus the prospects for bitcoin (BTC) and other cryptocurrencies.

Coming on Wednesday at 2 p.m. (ET) will be the minutes from the U.S. Federal Reserve's mid-June meeting of its rate-setting Federal Open Market Committee (FOMC). The Fed at that meeting paused its more than year-long series of rate hikes that had taken its benchmark fed funds rate to 5%-5.25% from 0% in early 2022.

In public comments since that meeting, Fed officials – including Chairman Jay Powell – have made clear that the pause in rate hikes was indeed only a pause. Policymakers at the central bank currently expect to increase rates at least twice more in 2023. Rate traders are in agreement, with the CME's Fed Watch tool currently forecasting an 89% chance the Fed at its next meeting in late July resuming rate hikes with a 25 basis point (bps) boost to the fed funds rate.

Market participants will get a preview of what June's employment situation looked like on Thursday at 8:15 a.m. (ET) from the ADP Employment Report. Forecasts are for a sizable slowdown in private sector hiring to 160,000 jobs in June from 278,000 in May.

Coming just a few minutes later on Thursday will be the government's initial jobless claims figure. While this gauge has crept higher in recent months, it continues to remain below levels that would be associated with overall job losses in the economy. Economists are forecasting Thursday's report to show initial jobless claims at 245,000 versus 239,000 previously.

Ninety minutes later on Thursday is the Job Openings and Labor Turnover Survey (JOLTs), a previously not widely-followed report that's taken on larger importance lately as market participants attempted to leave no stone uncovered in search of signals on the employment outlook. This number has edged lower over the past year, signaling the most modest of softening in the labor market. Forecasters are expecting Thursday's print to show JOLTs at 9.9 million, down from 10.1 million previously.

This week's main event comes Friday morning at 8:30 am ET, with the U.S. Nonfarm Payrolls report for June. This gauge has topped expectations for an astounding 14 consecutive months, continuing to show strength in the face of surging interest rates that many had expected by now would have slowed the economy and put a larger dent in hiring. Economist forecasts are for 250,000 jobs to have been added in June, down from 339,000 in May. The unemployment rate is anticipated to remain at 3.7%.

While many were relaxing ahead of July 4, an important economic gauge was released on Monday with the ISM's Manufacturing Purchasing Mangers Index (PMI). This slowed to 46.0 in June from 46.9 previously and was the weakest level since May 2022, when many Covid lockdowns were still underway. Numbers below 50 for this report are associated with contraction in the manufacturing sector, and this was the 7th-consecutive month below the 50 level.