This week's employment data is the real core; tariffs rulings and Venezuela are just side notes.

This week, the global markets are迎来"Super Data Week," but the market focus is not on tariff rulings or the Venezuela situation, but on US employment data. Wednesday’s ADP report and Friday’s Non-Farm Payrolls will directly determine the Federal Reserve’s policy direction, thereby influencing global liquidity expectations. In comparison, the Supreme Court’s ruling on tariffs and the Venezuela situation are just “background noise.”

Key Event Timeline for This Week

Why Employment Data is the Market Focus

The Key Driver of Inflation Expectations

According to Vincent An, Portfolio Manager at Wisdom Fixed Income Management, “Trading in interest rates and credit instruments depends on US growth, inflation, and the Fed’s next move.” This logical chain is clear: employment data directly reflects economic growth, and overheating or cooling economy will influence inflation expectations, which in turn determines whether the Fed will cut rates.

Economists forecast that US December job gains will be 73,000, higher than November’s 64,000, with the unemployment rate expected to drop from 4.6% to 4.5%. But these are just expectations; actual data may vary. Meanwhile, reports indicate that the US unemployment rate has risen for three consecutive months, contrasting with expectations—markets will need Friday’s data to clarify the true employment trend.

The Internal Divisions within the Fed

Fed Governor Michelle Bowman recently stated that current interest rate policy is “significantly restrictive,” with ample reasons for rate cuts “far exceeding 100 basis points” by 2026. This signals an expanding voice of the aggressive easing camp within the Fed. But the ultimate resolution of these divisions depends on whether employment data is truly weak enough to justify large rate cuts.

In other words, employment data is the “ultimate judge” for Fed decisions—if employment remains resilient, the case for pausing rate hikes strengthens; conversely, if data weakens, the aggressive easing faction represented by Michelle will have strong arguments.

Why Tariff Rulings and Venezuela Are Relatively Less Important

Limitations of Tariff Rulings

The US Supreme Court may rule on the legality of Trump’s global tariffs this Friday. This could impact the market, but the magnitude and direction depend on the specific ruling. In contrast, employment data is a more direct and quantifiable market signal.

Why Venezuela is “Just Background Noise”

Vincent An straightforwardly states: “Venezuela will only enter the market view if its events cause sustained oil price fluctuations, affecting gasoline prices and inflation.” Currently, the market does not see such a scenario. In other words, Venezuela’s situation does not directly alter inflation expectations, so it won’t directly impact bond trading.

This reflects an important market logic: traders care not about the events themselves, but about how events influence inflation, growth, and Fed policy. If the Venezuela situation does not materially change these fundamentals, it is just “noise.”

Potential Impact on the Crypto Market

Sensitivity of Liquidity Expectations

Uncertainty in employment data directly translates into uncertainty in liquidity expectations. According to relevant reports, “Uncertainty about the interest rate path means liquidity expectations will remain highly sensitive to data changes, with short-term volatility possibly amplified.”

What does this mean for crypto markets? If Friday’s non-farm payrolls unexpectedly underperform, markets will quickly adjust expectations for rate cuts in 2026, potentially improving liquidity conditions, which could provide structural support for assets like Bitcoin that have “monetary attributes.” Conversely, if data exceeds expectations, rate cut expectations will be lowered, and short-term pressures may arise.

Trading Principles for This Week

This week is not just a “data wolf kill” game but a period of re-pricing liquidity expectations. The key points are:

• Focus on actual data from Wednesday’s ADP and Friday’s non-farm payrolls, not forecasts
• Observe the real trend of the unemployment rate to assess whether employment resilience is truly weakening
• Watch for Fed officials’ reactions to the data, which will set the tone for the January FOMC meeting

Summary

This week, employment data is the market’s real focus because it directly determines the Fed’s policy direction. While tariff rulings and the Venezuela situation are also happening, their impact on the market is far less direct than employment data. The extent of internal disagreements within the Fed over rate cuts ultimately depends on employment data. For the crypto market, this means liquidity expectations will be highly sensitive to this week’s data, with short-term volatility possibly increasing, but the long-term policy direction will be dictated by these data points.