3 reports to watch in the crypto market today

Key Takeaways:

• Three reports coming out on Feb. 1 could give investors and traders a better idea of the crypto market expectations.
• Why are they relevant and how can Manufacturing, Construction and Labour market influence crypto?

Yerevan (CoinChapter.com) – According to the U.S. Bureau of Labour Statistics, the economy experienced one of the highest inflation rates in the past four decades, hitting 7% in Dec. 2021. Thus, the Federal Reserve adopted a hawkish policy, with most officials agreeing to hike interest rates at least four times in the coming year.

The announcement boosted investors’ appetite for the U.S. dollar while turning capital away from riskier assets — the so-called pandemic winners — such as equities, gold, and Bitcoin (BTC). As a result, the prospect of rate hikes created a strong inverse correlation between the dollar and Bitcoin.

Now, market watchers await key economic data coming out of the U.S. that would shed more light on how fast the Fed may increase its interest rates from the current near-zero levels. As a result, the data could also provide more clues on the next direction of Bitcoin and similar digital assets.

#1 Manufacturing figures

Manufacturing is one of the most reliable predictors of economic growth. According to the Industrial Analytics Platform, “there is enough evidence” to suggest that a thriving manufacturing sector is a key to “increased productivity” and, therefore, the growth of GDP (gross domestic product).

A thriving manufacturing sector also testifies that the economy has been recovering. Thus, a stronger than expected reading would give the Fed more reasons to taper down its $120 billion a month asset purchasing program, followed by rate hikes, and, in turn, boost the dollar’s demand.

As a result, a stronger U.S. economy could play spoilers in the ongoing crypto price recovery.

Also read: Crypto market faces threat from JPMorgan's stronger dollar prediction.

The January numbers expected to show that factory activity continued to rise but moderate. If the upcoming Feb. 1 report confirms the expectations, the crypto market recovery may end up facing headwinds.

#2 Construction spending

The Commerce Department serves up its latest monthly tally on Construction spending. The Construction Bellwether could give a clear idea of how builders could fight supply chain constraints.

In detail, lumber and other building materials experienced bottlenecks in the previous months. The past reports showed an incremental increase of 0.4% in Nov. and 0.7% in Dec. 2021. The numbers could influence the Fed tapering.

Also read: Top five crypto market winners and losers of the month.

If Construction Spending shows growth, the Fed might reconsider the degree of its hawkish policy.

#3 Survey of the job market

The U.S. Department of Labour releases a monthly report on the state of employment. The report should reflect that nonfarm employees added 150,000 jobs in January. If that’s the case, the previous month resulted in a 9.2% decline from December’s 199,000.

Despite the slowing of the hiring pace, the overall unemployment rate has declined and reached the pandemic low of 3.9%.

Also read: Bitcoin targets $38k as Arizona Senator introduces bill to make BTC legal tender. 

However, the lowering unemployment rate could be inversely correlated with the crypto market and other risky assets. The risk asset sector typically thrives when the public is not content with the labor market opportunities.

Thus, if the Labour Department shows an unemployment decline, the crypto market outlook could suffer.