Lowest Job Openings In 10 Months

In case you missed it! Our recap of last week’s reports:

• Why is Bitcoin Bearish Despite a Dovish Fed?
• Bybit x Block Scholes July Volatility Review

Daily Updates:

• Further weakness in the US labour market has, for now, all but cemented the probability of a September rate cut. According to 30 day Fed funds futures, the market-implied odds for a 25bps reduction to the federal funds rate is currently 97.6%. 
• The big driver for the move higher was a weaker than expected JOLTS report from the US Bureau of Labour Statistics yesterday. 
• Job openings fell in July to 7.18M, the lowest in 10 months, and below the median Bloomberg estimate of 7.38M. The last time the number of job openings in a month came in this low was back in September 2024 when the Fed first cut rates by 50bps.
• Additionally, openings in June were also revised down to 7.36M. 

• The lower-than-expected job openings comes only a month after a July NFP report that showed the largest two-month revision to the number of jobs added by the US economy since the onset of Covid — and adds to the comments made by Chair Powell in his Jackson Hole speech that the “balance of risks appears to be shifting”. 

• The jobs report also highlighted another crucial metric that the risks may be tilting towards the labour market: for the first time since April 2021, there were more unemployed people than positions available, as job openings came in below the number of unemployed workers (7.2M). 
• The slide in vacancies is a sign that companies are becoming more cautious in their hiring, while it is becoming more difficult for unemployed people to find jobs.
• The quits rate, a measure of worker confidence in leaving their job, remained unchanged at 2%, suggesting that those who are in employment are not leaving. 
• Nonetheless, markets are still awaiting the NFP report later this week on Friday, which is viewed as a more important labour market report.

• US equities were propped higher by the increasing bets of a rate cut and labour market cracks as the S&P 500 ended a two-day loss streak, to finish 0.51% higher in yesterday’s trading session. 
• BTC also had a small rally up to $112.5K yesterday, though it quickly fell from those levels returning back to the $110K mark where it initially rallied from. 
• Over the past week we’ve seen BTC struggle to break out from its $107K and $113K range.
• That rangebound price action has also seen volatility smile skews maintain their negative tilt towards OTM puts. For 7-day options, OTM puts trade with a 4 vol point premium over OTM calls. 
• ETH poised a similar rally almost up to $4,500, though like BTC it was short-lived. 

• Federal Reserve Governor Christopher Waller reiterated his case for additional rate cuts in the upcoming months yesterday. 
• Speaking on CNBC Waller stated "I think we need to start cutting rates at the next meeting, and then we don't have to go in a locked sequence of steps”. 
• Waller added that  “We can kind of see where things are going, because people are still worried about tariff inflation. I’m not, but everybody else is” and “I would say over the next three to six months, we could see multiple cuts coming in."
• While Fed members debate what the neutral federal funds rate may be, Waller said “We know roughly how much you might want to cut, say 100, 150 basis points. But how fast we get there is going to depend on the data that comes in.”

• Not all Federal Reserve members share the same dovish stance as Waller however. In an essay written yesterday, Atlanta President Raphael Bostic wrote “I believe that, while price stability remains the primary concern, the labor market is slowing enough that some easing in policy — probably on the order of 25 basis points — will be appropriate over the remainder of this year”. 

• Bostic also wrote “I do not think it is unambiguously clear that the labor market is weakening materially relative to our mandated objectives”. However, the most recent Fed Beige Book stated that “Most of the twelve Federal Reserve districts reported little or no change in economic activity since the prior Beige Book period.”
• It also highlighted a stagflationary-esque environment: “Across districts, contacts reported flat to declining consumer spending because, for many households, wages were failing to keep up with rising prices” while “Nearly all districts noted tariff-related price increases, with contacts from many districts reporting that tariffs were especially impactful on the prices of inputs”.

• SUI Group Holdings Limited (NASDAQ: SUIG), has added approximately 20 million SUI tokens to its treasury. This brings the Company’s total holdings to 101,795,656 SUI tokens, valued at about $344M.

• Etherealize, a company developing institutional-grade infrastructure for ethereum adoption, has secured $40M in funding in a round led by Electric Capital and Paradigm, with additional support from Vitalik Buterin and the Ethereum Foundation.
• Etherealize’s product development focusses on three core pillars: upgrading markets by tokenising inefficient asset classes, automating infrastructure with 24/7 compliant execution and instant settlement and embedding Privacy using zk-technology.

• BitMine continues its Ethereum accumulation, adding 14,665 ETH from Galaxy Digital and 65,000 ETH from FalconX at around $358M.
• This brings the firm’s total holdings to 1.95 ETH, valued at around $8.69B.

This Week's Calendar:

Charts of the Day: