Market Update: Jobs Data and Potential Government Shutdown

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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Jobs Data + Potential Government Shutdown?

Good afternoon all,

We're beginning this week with a small bounce in Majors across the board, following a rather torrid week for price action, which seemed somewhat unwarranted considering Equity Indexes only pulled back very slightly from their all-time highs.

Last week, PCE came in slightly softer than expected, which saw rate cut odds for October and December's Fed Meetings increase. This week, the market will turn to labour market data for further signals of interest rate cuts at these upcoming Meetings.

This Week's Jobs Data:

This week, we have:

• Job Openings on Tuesday
• ADP on Wednesday
• Unemployment and Non-Farm Payrolls on Friday

Expectations are for Job Openings to come in relatively unchanged at 7.1m, and with Unemployment to also remain unchanged at 4.3%, with Payrolls expected to show an uptick to 50k jobs added.

Should we see the numbers come out as forecasted above, we might see the odds of an October rate cut pull back, particularly if this is then supported by more hawkish Fed speak. The market is currently priced at an 89% chance of an October cut, with the market pricing nearly 42bps of cuts between now and year-end. This suggests that we're going to get at least 1 more rate cut, with an approximate 50/50 chance of another cut.

Alongside the jobs data, multiple Fed members are speaking this week – more hawkish statements could challenge the 89% odds of an October cut.

The market was priced for two more cuts this year, although Crypto pulled back last week, likely due to the potential for the Fed to only deliver 1 more rate cut in 2025.

Our base case remains that the Fed will deliver 2 more cuts in 2025, and likely 2 or 3 more in 2026.

Potential Government Shutdown:

The market also has an eye this week on a potential government shutdown. Today, President Trump is meeting with top members of Congress - both Democrats and Republicans, to try to avert a government shutdown on Wednesday.

Usually, threats of government shutdown aren't hugely reacted to by markets as they're often resolved. However, this week, it's possible that a government shutdown by Wednesday could happen, and this would leave markets in a position where they're not seeing the BLS job figures and only getting the ADP figures. Recently, ADP jobs numbers have been much lower than the BLS (although they have been more accurate). This potentially opens the door for a market scare this week, particularly if a deal between Democrats and Republicans isn't reached quickly - and we expect that it won't be.

Crypto Bouncing?

Following a heavy week for price action last week, we're seeing a small bounce across the board. However, the Majors are moving into key resistance areas, and in the short-term timeframes, are seemingly rejecting.

The key resistance zones for Majors that we're watching are:

• BTC: $112,000-$113,000
• ETH: $4,340
• SOL: $220
• HYPE: $49.00

Cryptonary's Take:

Our expectation is for the coming week to be a volatile one as we prepare for a government shutdown, alongside all important jobs data that may not come (should we get that government shutdown). This is likely to increase uncertainty and therefore markets may be primed to pull back further.

In the short-term (the next 1-2 weeks), we expect that a further price pullback is possible, which can see BTC retest the lower bound range between $101,500 and $106,000. Should we see this pullback, we'd be aggressive buyers of BTC in that range. Secondly, just because we call for this pullback doesn't mean we expect a further bloodbath in alts. In fact, it's possible coins like HYPE may just retest their lows (at $39.00) rather than put in new lows. Should BTC get to $101,500-$106,000, that's where we'd look to buy BTC and the Majors - we'll take the price the market gives us. Should we get this pullback, we’d see it as a huge opportunity going into November/December and Q1 2026.

BTC Price Action Chart: