The U.S. job market has shown unexpected strength in May, with the government reporting an addition of 272,000 jobs. This figure significantly surpassed the estimated 185,000 and April's revised figure of 165,000. The unemployment rate for May was 4.0%, slightly higher than the estimated and April's rate of 3.9%.

The robust job data led to a decline in Bitcoin, stock, and bond markets. Bitcoin's price fell sharply from a near two-month high of $72,000 following the release of the job data. At the time of reporting, Bitcoin was trading at $70,900, marking a 0.5% decrease over the past 24 hours. The report also showed that average hourly earnings rose by 0.4% in May, surpassing forecasts of 0.3% and April's 0.2%. On a year-over-year basis, average hourly earnings were higher by 4.1%, compared to estimates of 3.9% and April's 4.0%.

The strong job data has also had an impact on interest rates, which had been rising through the first part of 2024. However, recent U.S. economic data indicating a slowdown in both economic growth and inflation has led to a downtrend in interest rates for about the last five weeks. The 10-year Treasury yield was at 4.30% ahead of the job data, compared to a 2024 high of 4.71% in late April.

The decline in rates has been beneficial for risk assets, with major U.S. stock market averages and Bitcoin prices surging. The belief that major Western economies are about to enter a monetary easing cycle gained further credibility this week when both the Bank of Canada and the European Central Bank cut their respective benchmark interest rates for the first time in several years. The odds of a Fed rate cut have also increased recently, with investors pricing in about a 55% chance of a move on or before the bank's September policy meeting.

However, the strong job data may reverse this thinking, at least in the short term. Besides Bitcoin's swift pullback, the 10-year Treasury yield has risen by 12 basis points to 4.42%, and U.S. stock index futures are indicating a lower open. Other indicators show the U.S. dollar surging 0.5% and gold tumbling more than 2%. The robust job data has sent a mixed signal to investors, with some indicators suggesting a potential reversal in the recent trend of monetary easing.