U.S. PMI influences the market through two main channels: liquidity expectations and risk appetite. Combined with the current hawkish nomination of Waller by Powell, volatility may increase.

1. Core Transmission Chain

- PMI→Economic Outlook→Federal Reserve Policy Expectations→Dollar and Liquidity→Cryptocurrency Prices and Risk Appetite.

- Key Thresholds: PMI >50 indicates expansion, <50 indicates contraction; focus on the divergence between manufacturing (ISM/S&P Global) and services PMI.

2. Three Scenarios and Crypto Market Reactions

- Scenario 1: PMI exceeds expectations (better than expected and >50) → Strong economic resilience → Market bets on the Fed maintaining high interest rates → Dollar strengthens, liquidity tightens → Negative for cryptocurrencies, high leverage prone to sell-offs. If combined with rising inflation, negative impact is more pronounced.

- Scenario 2: PMI below expectations (weaker than expected and <50) → Economic slowdown → Bets on earlier/larger rate cuts → Dollar weakens, liquidity expectations loosen → Positive for cryptocurrencies, risk appetite improves. If accompanied by stagflation (weak PMI + high inflation), policy dilemma causes volatility.

- Scenario 3: In line with expectations → Market reaction is muted → Small fluctuations, continuation of existing trend.

3. Key Data Tonight (2026-02-02 Monday)

- 22:45 S&P Global January Manufacturing PMI Final (moderate weight).

- 23:00 ISM Manufacturing PMI (high weight, expected 48.3, previous 47.9).

- Current background: Trump nominates hawkish Waller as Fed Chair, market rate cut expectations cool down, dollar remains strong, crypto markets already saw a sharp decline over the weekend, PMI data may amplify volatility.

4. Trading Response Points

1. Watch thresholds: 50 as the line between growth and contraction, and the deviation from expected 48.3; larger deviations mean more volatility.

2. Focus on components: Prices / Employment / New Orders. If PMI is weak but price component is high, beware of stagflation suppressing easing expectations.

3. Risk control: Reduce leverage during high volatility, set proper take-profit and stop-loss levels, avoid chasing gains or panic selling.

4. Monitor correlations: Keep an eye on the dollar index, U.S. Treasury yields, and capital flows to assess market sustainability.

5. Tonight’s Trading Tips

- Before data release: Reserve gold positions, wait for clear signals.

- During data release: 22:45-23:00 is peak volatility; focus on ISM Manufacturing PMI. If it deviates significantly from expectations, trade lightly in line with the trend.

- After data: If PMI exceeds expectations and the dollar strengthens, stay on the sidelines; if below expectations, gradually allocate to mainstream cryptocurrencies, strictly control positions.

If you have questions, please contact Mr. Zhao promptly!!!