Three paths of non-farm: what market scenarios might they bring?

I categorize tonight's possible non-farm data outcomes into three paths and analyze their potential impact on the market for reference.

Path One: Strong employment + wage growth exceeding expectations
In this case, the market will quickly price in a delay in rate cuts. The US dollar index will rise, Treasury yields will climb, US stocks will come under pressure, and Bitcoin is likely to continue its weakness. This combination is most unfavorable for bulls. Sector-wise, energy stocks may perform relatively resilient due to oil prices and inflation logic, while tech stocks and rate-sensitive assets will be hit hardest.

Path Two: Moderate employment growth, roughly in line with expectations
This is the most likely scenario to trigger a "bullish exhaustion" reaction. The market has already priced in fear, so if the data is in line with expectations, safe-haven positions taken earlier will be closed and reversed, leading to a rebound in US stocks and Bitcoin. However, the height of the rebound depends on whether there are signs of de-escalation in the US-Iran situation.

Path Three: Data significantly below expectations
Initially, the market will briefly cheer on expectations of rate cuts, causing risk assets to surge rapidly. But if the data is so poor that the market shifts from a "soft landing" narrative to "recession fears," the rally may be very short-lived, soon replaced by deeper fears. Historically, many non-farm nights have seen sharp rises followed by crashes. This scenario is most damaging to traders because it first hits your stop-loss and then reverses to trap you.

$BTC ‌

No matter which path unfolds, tonight's volatility will be significant. Instead of guessing the direction, it's better to prepare for both outcomes: think about what to do if you're wrong before entering, which is always more valuable than fantasizing about how much you could make if you're right.
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