🧵 Why is everyone online waiting for the "Non-Farm"? Water Brother explains it clearly in one article:
1️⃣ What is non-farm data?
It refers to the employment data of the non-agricultural population in the United States, released by the U.S. Department of Labor on the first Friday of every month.
Why exclude agriculture? Because agriculture is greatly affected by the seasons (harvesting in summer, downtime in winter). By removing it, the remaining industrial and service sector data can truly reflect the "underlying momentum" of the U.S. economy.
What are the key indicators to watch?
New employment numbers, unemployment rate, wage growth.
2️⃣ Why should we look at this data?
The Federal Reserve's main focus: inflation (CPI), employment (non-farm).
If employment is too strong: It indicates that everyone has work and money to spend; the economy is too hot, and inflation may not be controllable.
The Federal Reserve might think: "Since the economy is so stable, why should I lower interest rates? I might even need to maintain high rates or raise them."
If employment is too weak: It indicates companies are laying off employees, and the public has no money; the economy is about to collapse.
The Federal Reserve would panic: "I need to quickly lower interest rates (inject liquidity), reduce interest rates so that everyone can borrow and spend!"
3️⃣ The game between non-farm and the expectation of interest rate cuts.
Bad data = interest rate cuts are secure = market frenzy: Money becomes cheaper, everyone is more motivated to invest.
Good data = interest rate cuts are cooling = market crash: Since interest rates need to be maintained at high levels, money will flow back to banks to buy U.S. Treasury bonds.
4️⃣ Why do we in the crypto space pay special attention to it?
In the crypto space, especially mainstream coins or Bitcoin (BTC), it has now become a global mainstream asset, similar to the stock market.
The logic of non-farm data with the dollar and Bitcoin's rise and fall:
Strong non-farm data means the dollar rises and Bitcoin falls; weak non-farm data means the dollar falls and Bitcoin rises.
Non-farm numbers exceed expectations: Strong economy, lower probability of interest rate cuts, bearish for the stock market/crypto space.
Non-farm numbers below expectations: Higher risk of recession, higher probability of interest rate cuts, bullish for the stock market/crypto space 📈
If it’s too convoluted, just remember Water Brother's saying:
Just remember that the worse the data, the better, as only bad data will drive the market up.
Alright, then the market will drop, and no one will come to drive it up $BTC
1️⃣ What is non-farm data?
It refers to the employment data of the non-agricultural population in the United States, released by the U.S. Department of Labor on the first Friday of every month.
Why exclude agriculture? Because agriculture is greatly affected by the seasons (harvesting in summer, downtime in winter). By removing it, the remaining industrial and service sector data can truly reflect the "underlying momentum" of the U.S. economy.
What are the key indicators to watch?
New employment numbers, unemployment rate, wage growth.
2️⃣ Why should we look at this data?
The Federal Reserve's main focus: inflation (CPI), employment (non-farm).
If employment is too strong: It indicates that everyone has work and money to spend; the economy is too hot, and inflation may not be controllable.
The Federal Reserve might think: "Since the economy is so stable, why should I lower interest rates? I might even need to maintain high rates or raise them."
If employment is too weak: It indicates companies are laying off employees, and the public has no money; the economy is about to collapse.
The Federal Reserve would panic: "I need to quickly lower interest rates (inject liquidity), reduce interest rates so that everyone can borrow and spend!"
3️⃣ The game between non-farm and the expectation of interest rate cuts.
Bad data = interest rate cuts are secure = market frenzy: Money becomes cheaper, everyone is more motivated to invest.
Good data = interest rate cuts are cooling = market crash: Since interest rates need to be maintained at high levels, money will flow back to banks to buy U.S. Treasury bonds.
4️⃣ Why do we in the crypto space pay special attention to it?
In the crypto space, especially mainstream coins or Bitcoin (BTC), it has now become a global mainstream asset, similar to the stock market.
The logic of non-farm data with the dollar and Bitcoin's rise and fall:
Strong non-farm data means the dollar rises and Bitcoin falls; weak non-farm data means the dollar falls and Bitcoin rises.
Non-farm numbers exceed expectations: Strong economy, lower probability of interest rate cuts, bearish for the stock market/crypto space.
Non-farm numbers below expectations: Higher risk of recession, higher probability of interest rate cuts, bullish for the stock market/crypto space 📈
If it’s too convoluted, just remember Water Brother's saying:
Just remember that the worse the data, the better, as only bad data will drive the market up.
Alright, then the market will drop, and no one will come to drive it up $BTC