Vibe Shift
Crypto Continues to Show Relative Strength
It was an eventful week in global macro (this is now the default opening line of every note), as consequential headlines rolled across the tape at a rapid clip. Among them:
Signs of slowing demand appeared in Apple’s revised agreement with suppliers, and early signs of potential deflation were on display in Nike’s surging inventories.Despite this, the Fed’s preferred inflation figure, PCE, came in extra hot for the month of August, consistent with the CPI print released earlier this month. Markets clearly already contemplated this number in asset prices following the CPI release, but it still left many market observers scratching their heads.We witnessed the second material intervention from a major central bank this week, as the Bank of England was forced to bid on long-duration UK treasuries such that large pensions did not go belly-up (more on this later).The Bank of Japan revealed that it spent nearly $20 billion in last week’s currency intervention. They stated that selling US treasuries was not yet an option on the table, but at the time of writing, the $JPY is trading about where it did before the central bank’s intervention.Nord Stream 2, a critical chess piece in the War in Ukraine, was destroyed, the proximate ...Reports you may have missed
TURNING CAUTIOUSLY OPTIMISTIC There is a lot of pain in the ETHBTC chart. It peaked in December 2021 and, save for several brief rallies, has been on a downwards slope ever since. It peaked at just under 0.09 and currently trades around 0.038. Source: TradingView Fortunately, we have anchored most of our attention on BTC and SOL this cycle, as BTC has continued to lead the market in a generally...
BTC DECOUPLING FROM EQUITIES Over the past two weeks, BTC has begun to decouple from other risk assets. While the broader macro environment experienced choppy conditions from November 12th through yesterday, BTC has appeared indifferent to fluctuations in risk appetite, continuing its upward momentum and approaching the $100K milestone. A chart of BTC correlations highlights this decoupling, with sharp declines in its correlation to the QQQ, SPX, and IWM. The...
Market Lacks Convincing Signs of Market Froth, Major Demand Side Catalyst for CORE (Core Strategy Rebalance)
FROTH OR REPRICING? A heated debate is unfolding among crypto investors: have we just hit a local top, or will the breakout after eight months of consolidation continue higher through year-end? The crypto market has surged rapidly, as we anticipated, but the key question remains—can this rally sustain itself, or is it nearing exhaustion? Anecdotally, we are seeing renewed interest in crypto from casual observers. Friends and family are once...
TRUMP MAINTAINS A SLIGHT EDGE, BUT IT’S ESSENTIALLY A TOSSUP Well, it's here, folks – the moment that markets have been building up towards since January—the general election to decide the next President of the United States. As our clients know, we have been closely tracking polling and prediction market trends over the past several months, and these have served as a key input in our recommendations. Odds for both...
