Bitcoin (BTC) fell to $30,600 just before press time, with part of the pullback from the 13-month high of $31,500, according to data from CoinDesk, following an overwhelming US ADP report at 12:15 UTC on the private employment was published.
The ADP report took markets by surprise, showing that 497k new private sector jobs were added in June, more than double the consensus forecast of 220k. The data eclipsed a Labor Department report showing mild job market weakness. Last week, initial jobless claims rose by 248k, beating the forecast of 245k.
Government bond yields continued their early rise following the ADP report, with the two-year yield rising about 15 basis points to 5.118%, the highest since 2006, according to charting platform TradingView. The 10-year yield rose 11 basis points to 4.05%, the highest level since March.
The two-year bond is more sensitive to short-term interest rate expectations. Its surge to fresh multi-year highs suggests traders are expecting the Fed to expand its rate hike campaign. In fact, Fed fund futures traders now see a 94 percent chance of a 25 basis point rate hike this month, and markets are now pricing in a 75 percent chance of three more rate hikes by the end of the year. Before a pause last month, the Fed started its so-called tightening cycle in March 2022 and has since hiked rates by 500 basis points to the 5% to 5.25% range. Tighter monetary policy has been one of the factors behind the impotence in crypto markets over the past 18 months.
Stock traders also reacted negatively to this morning’s ADP news, with futures linked to the S&P 500 trading up 0.9% at press time and Nasdaq futures down 1.1%. Gold was trading 0.5% lower on the day at $1,905 an ounce and the Dollar Index erased early losses to trade flat on the day at 103.24.