Today and tomorrow’s upcoming data is crucial for cryptocurrencies.
Uncertainty regarding tariffs has dissipated, and cryptocurrencies have not experienced the significant drop that many feared. If we do not witness a delayed decline, a recovery in cryptocurrencies should commence in the second quarter. So, what do the latest U.S. data indicate for cryptocurrencies?
Latest U.S. Data Insights
With tariff changes, the U.S.’s trade partners should increase money supply and lower interest rates to boost domestic demand. As global recession concerns become more pronounced, the Fed’s path, albeit delayed, aligns with this strategy, and rapid-moving countries, particularly China, increasing liquidity could spark the demand cryptocurrencies need.
Just moments ago, data on the U.S. trade balance and unemployment claims were released. We will monitor whether employment weakened due to the tariffs that were reported yesterday, using this data on a weekly and monthly basis. A weakening job market may compel the Fed to accelerate its easing measures. The markets have already begun pricing in four interest rate cuts for this year, a significant shift from earlier expectations of 1-2 cuts for 2025.
U.S. Secretary of Commerce Lutnick stated, “Interest rates in the U.S. will be significantly lower,” and urged other countries to avoid retaliation in his recent remarks.
U.S. Trade Balance Reported: -$122.7 Billion (Expectation: -$123.5 Billion Previous: -$131.4 Billion)
U.S. Initial Unemployment Claims Reported: 219K (Expectation: 225K Previous: 224K)
U.S. Continuing Unemployment Claims Reported: 1.903M (Expectation: 1.84M Previous: 1.856M)
The higher-than-expected unemployment claims are significant for interest rate cut expectations. The timing of the Secretary of Commerce’s message regarding interest cuts is also crucial for cryptocurrencies; however, new unemployment claims falling below expectations tempered optimism. The trade deficit between the U.S. and China has narrowed by nearly $10 billion, indicating the initial effects of the tariffs. The absence of a major economic shock is favorable for cryptocurrencies.