Slowing employment growth intensifies easing expectations, and tonight's PMI provides a short-term catalyst for gold and cryptocurrencies.

According to the latest news, the structural cooling trend in the US labor market is deepening, which is driving market expectations for a more aggressive rate cut path by the Federal Reserve. Against this macro backdrop, both gold and crypto assets are given a re-pricing opportunity. The release of tonight’s PMI data could serve as a key catalyst in the short term.

Macro Implications Behind Employment Deterioration

Signals of recession in the US labor market are already quite clear. Analysis shows that unemployment rate, resignation rate, and wage growth are all weakening in sync. This is not just short-term volatility but a structural slowdown on the demand side.

This synchronized weakening pattern is crucial. It indicates that:

• Companies are not only reducing hiring but also increasing layoffs
• Employees are less willing to resign, indicating a lack of confidence in the job market
• Weakening wage growth suggests diminished bargaining power for labor

Together, these indicators point to a conclusion: the demand side of the US economy is experiencing a substantial slowdown, not just cyclical adjustments.

Shift in Federal Reserve Policy Expectations

Based on this situation, analysts believe the Fed faces a dilemma. Even if the economy does not show clear signs of recession, to avoid policies of “over-tightening” that could further impact employment, the Fed may be forced to adopt a more aggressive rate cut path than currently priced in by the market over the next one to two years.

What does this mean? The market has already priced in some degree of rate cuts, but the Fed might go beyond these expectations. This divergence in expectations could produce two effects:

• Short-term increase in risk assets (including crypto assets)
• Medium-term depreciation of the US dollar and real interest rates

Why Gold and Crypto Assets Benefit Simultaneously

This is the key logical chain. Falling real interest rates (nominal rates falling more than inflation expectations) will lead to:

1. The US dollar facing unavoidable medium-term pressure — appreciating when rates rise, depreciating when rates cut
2. Capital reallocating to assets that hedge against inflation and currency credit risk
3. Gold regaining structural support
4. This logic gradually spilling over into the crypto market

The core reason crypto assets benefit is that, in a loose monetary environment, investors tend to seek assets with scarcity and decentralization features to hedge against currency devaluation. Cryptocurrencies like Bitcoin, with their fixed supply and cross-border liquidity, are candidates for such hedging tools.

Short-term Catalytic Effect of Tonight’s PMI

Bitunix analysts point out that the market has already begun pricing in loose risk premiums in advance. However, tonight’s PMI data could still cause short-term shocks:

• If PMI falls below expectations, it will reinforce safe-haven and easing bets in the short term
• This could trigger a rapid rise in gold and increased volatility in the crypto market
• In the medium term, it will strengthen the easing narrative, benefiting risk asset valuation recovery

It’s important to note that PMI is a key indicator of manufacturing sector health. If PMI data weakens again, it will further confirm that the economic slowdown is not limited to the labor market but is affecting the real economy.

Cumulative Effect of Geopolitical Risks

Additionally, according to related information, geopolitical risks are also rising simultaneously. US sanctions on Venezuela’s oil exports and uncertainties in the Middle East are pushing energy prices higher, increasing risk premiums. This will further reinforce inflation expectations’ uncertainty, thereby supporting the safe-haven appeal of gold and crypto assets.

Risks to Watch Out For

Analysts also warn to be cautious of capital flows and volatility in the US dollar and risk assets. In a highly uncertain macro environment, market sentiment may fluctuate repeatedly, and short-term volatility could be quite intense.

Summary

The slowdown in employment is driving market expectations for more aggressive rate cuts by the Fed, and this logical chain supports the simultaneous rise of gold and crypto assets. Tonight’s PMI data will serve as an important short-term validation point—if the data is weak, it will reinforce these expectations and possibly intensify short-term volatility. However, in the medium term, the easing narrative has become the mainstream consensus, and the attractiveness of crypto assets in this environment is being re-priced. The key is to distinguish between short-term fluctuations and medium-term trends to avoid being misled by market sentiment swings.