The ADP data came out at 9:15 p.m. last night: U.S. private-sector employment rose by 86,000 in October, above market expectations of 65,000–75,000 (estimates varied by institution).

Many people’s first reaction is “a strong economy is good for risk assets.” Quite the opposite.

Why “good data” is “bad news”:

The Fed isn’t thinking “when should we cut rates?” anymore—it’s thinking “how many more times should we raise them?” Pricing in fed funds futures shows that the market expects another rate hike in December and in 2027.

Against this backdrop:

· Strong employment → resilient economy → no reason for the Fed to slow down → stronger rate-hike expectations → bad news for risk assets

· Weak employment → the economy is cooling → the Fed may pivot → rate-hike expectations ease → bullish for risk assets

This is the market’s current “bad news is good news” logic—the exact opposite of 2023–2024.

Looking at the data in detail, it wasn’t actually that strong:

· Service-sector employment rose by 82,000—the only bright spot: trade/transportation/utilities +39,000 (the biggest increase in nearly two years), education and healthcare +28,000, leisure and hospitality +19,000, and financial activities +15,000

· Professional and business services shed 27,000 jobs, declining for the third month in a row. These are high-paying jobs, and their contraction suggests businesses are cutting costs.

· Goods-producing industries added just 4,000 jobs: manufacturing -1,000, mining -8,000

· Wages: Average hourly earnings rose 3.2% year over year, while job-changers saw a 4.8% increase—the fastest pace since March 2024. This is the most concerning figure, showing that wage inflation pressures are still here.

· September’s figure was revised down from 90,000 to 86,000

Overall, the report was “neutral to slightly strong,” not “strong.”

So why did crypto prices rise?

Because crude oil—not ADP—was driving the market last night. The 8% drop in oil prices lowered inflation expectations, outweighing the negative signal from ADP. The market was trading on “easing inflation,” not “strong employment.”

Tomorrow is the real test: the official November jobs report.

Economists expect 59,000 jobs to be added, with the unemployment rate holding at 4.2%. ADP and the official jobs report can sometimes differ widely, so don’t treat ADP as a preview.

My take:

If tomorrow’s jobs report also comes in above 80,000, a “December rate hike” will be all but confirmed, and pressure on crypto will return. If it comes in below 50,000, that could open the door to the possibility of a “pause in rate hikes.”

Which scenario worries you more—a jobs report that beats expectations or one that falls short? Share your reasoning.

Follow me—I’ll break down the data and share key levels as soon as tomorrow’s jobs report comes out.

$BTC #ADP #NonfarmPayrolls

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