Jobs Report: Mediocre Wage Gain Could Slow Hikes, Boost Crypto

Below is eToro's market commentary about traditional stocks and crypto markets from Mati Greenspan, Senior Market Analyst at eToro, the world's leading social trading platform.

  • Recent Poll Shows Brexit Stoking Market Fears: A recent poll from Goldman Sachs showed that 48% of respondents said that Brexit was their main focus in April. Given that markets have tended to ignore Brexit lately, Q1 earnings figures will likely be more significant in driving prices.
  • Slow Wage Gain Could Benefit Crypto: Mediocre wage gain shown in March’s jobs report only gives the Fed more reason to be patient with wage increases and monetary tightening. As we've seen in the past, a dovish Fed is positive for risk assets, including crypto.
  • Wall Street Increases Crypto Exposure: CME bitcoin futures volumes reached about $563 million yesterday, compared to the $685 million seen across the 10 top crypto exchanges. Although the CME's contracts are cash-settled and no Bitcoin is actually changing hands, Wall Street needs to be seen as a significant part of the market now.
  • XRP Joins in Rally: XRP is seeing double-digit gains today after failing to join in the crypto rally earlier this week. Meanwhile in the broader crypto market.

One of my favorite investors in the traditional markets is Howard Marks from Oaktree Capital, he always manages to put things into perspective.

 

Mati Greenspan
Mati Greenspan from eToro trading platform

In a recent memo to investors called growing the pie, Marks goes into great detail of everything that he believes is going wrong in US politics at the moment and how it's influencing the markets. 

What struck me, was that in the entire eight pages of brilliance and laying out all of the major risks, the words 'tariff' and 'trade' do not even appear. To me, this is a clear sign that what ails the United States at the moment is deep beneath the headlines.

Indeed, for me anyway, global politics is becoming less of a concern by the day. In a recent poll from Goldman Sachs, 48% of respondents said that Brexit was their biggest focus in April.

https://lh6.googleusercontent.com/QODeLSa8XzUnPEp4-0d-U-luyCpjDchABit7ts6Gqh9Yd4OxKFbBWxSaYCnpmc6Nr7FGdwR5sExU2IJD-480IdlY6SrQw1Ya_9qNhYSjs230BSKLSu2tk30FWgFb1-xSQMA-YVLO

Given my limited knowledge of Brexit however, as a macro investor, I'm actually trying to limit focus on it wherever possible. Yes, the headlines and deadlines are important, but unless they start moving the markets in a meaningful way I don't see much point in making it my main focus.

By the way, my answer was 'J'. What drives the markets at the end of the day are profits. If companies are or are not making profits the markets will respond to that, and so will answers A, B, C, D, E, F, I, K, and L.

Traditional Markets

As you probably know, the US jobs report known as NFP, is the most anticipated report that comes out every month. It's been known to move every asset from currencies, to commodities, and of course stocks. Given Wall Street's increasing participation in the crypto market lately, I wouldn't be surprised if Bitcoin moves due to it today, as well.

**UPDATE 8:30 a.m.: “Mediocre wage gain only gives the Fed more reason to be patient with wage increases and monetary tightening. As we've seen in the past, a dovish Fed is positive for risk assets, including crypto.”

Crypto Sidetrack

Here we can see the volumes on CME's bitcoin futures product, which reached 22,542 contracts yesterday, which is about $563 million.

https://lh5.googleusercontent.com/n1jSugxP9LgG9uji9p0uJwg7rKa1Dh1wUa8Hsa34qZKZtoszRi08RFH21RD7WXwbBZuo8pXy_BYeIpyYDCDdUI4y_J39h2tKDZWQrW0-kib4Yp9WR0stIKco3ODs3KPcXEGA8eo3

According to Messari, the top 10 real exchanges traded about $685 million over the last 24 hours. So even though the CME's contracts are cash settled and no Bitcoin is actually changing hands, Wall Street needs to be seen as a significant part of the market now.

Back to NFP
Analysts are forecasting that when the data is released it will show that the United States has added more than 170,000 jobs in the month of March.
You can check the results as they come out on sites like forexfactory.com or fxstreet's economic calendar, or of course by following financial people/news on social media.
They are also forecasting an average salary bump of 0.3% and the unemployment rate to stay flat at 3.8%. For monitoring the impact of the results, consider this type of setup so you can keep an eye on all markets at once. 
https://lh3.googleusercontent.com/XBoev0FpxJi7QS7fotJi37Dm0b1mUDYgfqAyEBCa8j1fiq02zuNEg4gRY9ycrpA7ju0dUjEsM0vp7Fz_chnzQ3nVM1z_Dx1Oy5IxXsrO7bc2vPu8OyT7eopHF7EJojfrfvAFnSMi

XRP has its Day

Since altseason began, many clients have been asking me about the lack of participation from XRP. Indeed, even though many altcoins had a turn to pump over the last few weeks, Ripple had been feeling kind of left out.
Well, that seems to have changed this morning as XRP (blue line) has outperformed during the morning's Asian session ramp.
https://lh5.googleusercontent.com/fBu61yTuWpUCTOMVbjJRGtLCBXQ83Mq1q7pGxQSqNZltniHw9xgsi0TrFbRa-dLyT29vj0gTgZmcFz9Lqs-i1H0MEERJIMzBD3cr3_y0wYTTNbLHgHk2uVujFcsGIwnQEpG9q-JT

Way to go!! Glad to see some double digit gains there.
If you're looking for something to watch over the weekend. Feel free to tune in to bloxlive.tv who are covering what looks like a very exciting bitcoin conference in Malta called Understanding BTC.

Kicking off the event, three of the biggest names in crypto - Adam Back, Tone Vays and Giacomo Zucco - joined my favorite crypto anchor Jessica Walker for an excellent panel discussion. Watch it here.

Spoiler alert. Tone Vays is still bearish, while Adam and Giacomo are taking a more long term outlook.
The way I see though, Tuesday's action really wiped the slate clean. Order books across exchanges that had been building up for weeks are now clear. The only thing left to drive the price is sentiment. So you decide!

Have a fantastic weekend!!

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David Kariuki

David Kariuki likes to regard himself as a freelance tech journalist who has written and writes widely about a variety of tech issues that affect our society daily, including cryptocurrencies (see cryptomorrow.com and coinpedia.org); climate change (cleanleap.com), OpenSim and virtual reality (see hypergridbusiness.com). He is currently pursuing a MSc in Environmental Management at Open University. He does write here not to offer any investment advise but with the intention of informing audience, and articles in here are of his own opinion. Anyone willing to use any opinion here as advise to invest in crypto should obviously take own responsibility and accountability of their losses (or benefits) thereof. You can reach me at eqariu@gmail.com or david@cryptomorrow.com

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