May Jobs Report on Watch

04/06/2021

Market participants are anticipating the release of the May employment report on Friday morning to learn more about the labor market's strength and if the economy has recovered sufficiently to support a change in the Federal Reserve's monetary policy stance. Non-farm payrolls are predicted to increase by 674,000 people, the most since March, and the unemployment rate is likely to fall to 5.9%, a new low for the epidemic era.
Another round of vaccines aided firms in reopening and scrambling to rehire personnel to meet increased demand. But, on the other hand, a robust jobs report could compel the Federal Reserve to begin indicating a shift away from its crisis-era policies.

As for the crypto market, according to MRB Partners, a boutique investment research firm based in New York, the bitcoin rally of the previous year may be coming to an end.

Analysts have expressed concerns regarding the environmental impact caused by cryptocurrencies and risks that possible regulations may cause, negative technical trends, and a reduction in monetary stimulus that may threaten bitcoin in the future. For example, MRB wrote, "Easy money has helped fuel the crypto bubble, and a slow unwinding of this trend globally will ultimately become a headwind for the speculative digital asset."

The environmental issue renewed fears, and leverage of a worldwide regulatory crackdown in the US and China warning about headwinds for cryptocurrencies are MRB's key concerns. For less possible negative environmental impact, "crypto mining systems would need to allow miners to produce tokens for significantly less cost compared to their current price," wrote MRB. In addition, according to MRP, higher mining efficiency could lead to lower energy use, which is common during bitcoin price corrections. Furthermore, overleveraging has become a mainstream issue for crypto markets, and regulators are now tasked with gauging the risks originating from increased non-financial intermediaries/exchanges.