This week's main economic event comes on Friday when the U.S. government releases employment data for May. Ahead of that though, were three fairly important data points of their own on Wednesday, and all flashed unexpected weakness.

First to hit was ADP private payrolls for May and that report showed the addition of just 37,000 jobs last month, far shy of expectations for 115,000 and well south of April's already weak 60,000. It was the softest ADP number since March 2023.

"ADP NUMBER OUT," said President Trump on his Truth Social. "'Too Late' Powell must now LOWER THE RATE."

Next up was the May ISM Services report, which came in at 49.9 against 52 expected and 51.6 in April. A number below 50 shows contraction and May's report was the first time in that zone in one year.

Finally, the U.S. Federal Reserve released its Beige Book for May, which showed even more softness in the economy. "Economic activity has declined slightly since the previous report," read the survey. "Half of the Districts reported slight to moderate declines in activity, three Districts reported no change, and three Districts reported slight growth ... the outlook remains slightly pessimistic and uncertain, unchanged relative to the previous report. However, a few District reports indicate the outlook has deteriorated."

Added up, the fresh data sent the 10-year U.S. Treasury note tumbling ten basis points to 4.36%, its lowest level in a month. It also had the odds of a July rate cut rising to 29% from 22% one week ago and the odds of one or more rate cuts by September rising to 76% from 58%.

Whither bitcoin?

The shibboleth that bitcoin BTC needs an easy Fed to rally may no longer be so, if it ever was. The world's largest crypto soared nearly 50% from mid-April to a new record high two weeks ago even as a string of Fed officials continually said they saw no need to cut rates.

Still, softer monetary policy from the U.S. central bank probably wouldn't hurt. For today at least, bitcoin is unimpressed with the thought of rate cuts coming sooner rather than later, continuing to trade in very quiet fashion around the 105,000 level.

Friday's government jobs report is likely to be key. Another poorer than expected print might come closer to cementing a Fed rate cut or cuts as soon as this summer, and turn the interest rate picture from a headwind to a tailwind.

Economist forecasts are for the U.S. to have added 130,000 jobs in May with the unemployment rate steady at 4.2%.

Genuine slowdown

"The ADP report does signal a genuine slowdown in labor demand, above all at SMEs (small and medium enterprises) which modestly shed jobs – important as SMEs account typically for around 2/3 of job growth," Marc Ostwald, chief economist and global strategist at ADM Investor Services International, told CoinDesk in an email. "It is wholly unsurprising given all the policy uncertainty and, above all, the ambiguity."

"I suspect that the clampdown on immigration (legal and illegal) is shrinking what was a very abundant pool of skilled and unskilled labour, and competition is heating up," he continued. "At the margin, it creates additional inflationary pressure, on top of tariffs and measures to secure supply chains that will necessarily add to companies' operating costs."

"How long it persists depends on how long the slowdown lasts, and the longer it goes on, the greater the risks of more significant layoffs, which, outside of highly specialized areas, would likely weigh quite heavily on wage growth, as job security would move to the forefront of employee considerations," Ostwald concluded.

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