Pressing Winners (Core Strategy Rebalance)
Rates Due For a Bounce (Maybe)
As the crypto market continues to exhibit strength, and despite eradicating one of the market’s biggest unknowns in Binance just last week, it remains essential to be aware of near-term risks.
Recently, the bond market has experienced a significant rally, and there's been a notable decline in the DXY. Combined with nominal stimulus in Asia, these factors have contributed to a substantial increase in USD global liquidity.
This boost in liquidity has been a driving force behind the expanding breadth in both the crypto market and crypto equities.
Notably, crypto equities began to align more closely with underlying crypto assets when the 10-year bond yield started to decrease.
If interest rates begin to regress to the mean – perhaps on a strong PMI print tomorrow, or ahead of the next Treasury quarterly refunding announcement, we may bear witness to a reduction in market breadth.
Recall that the overemphasis on bills issuance in the October refunding announcement fueled a good portion of the duration rally in late October and early November, and in our view, contributed to the broadening of the rally in crypto.
A resurgence in rates on the long end of the curve could create short-lived headwinds for altcoins and crypto equi...Reports you may have missed
LESSONS FROM OPEC We have witnessed a significant market panic partially related to formerly locked BTC hitting the order books. The major sources of supply include:Mt. Gox – 141,686 BTCUS Government – 8,100 BTCGerman Government – 50,000 BTC At current prices, this would equate to over $12 billion in supply. This threat, combined with an inhospitable macro backdrop (rising DXY, higher rate expectations, hawkish Fed), has brought BTC down to...
LDO Risk/Reward Looks Good Here, Immediate-term Macro Picture Still Uncertain (Core Strategy Rebalance)
FLOWS AND SENTIMENT STILL SUBDUED Last week, we received a better-than-expected CPI print, but the DXY continued to move higher due to global weakness and a hawkish Fed. We discussed the risks appearing in the metrics we use to gauge sentiment and flows. The overall lack of follow-through in the crypto market was evident. Volumes, net ETP flows, the Coinbase discount, stablecoin market cap trend, and search interest for key...
OVERALL, IT WAS A GOOD CPI/FOMC DAY As any market observer knows by now, CPI came in remarkably cool yesterday. May CPI data was soft across the board, with headline inflation at 0.0% M/M vs. 0.1% expected and core inflation at 0.2% M/M vs. 0.3% expected. The unexpected data fueled a violent rally across all risk assets as rates fell, and the futures market started to price in additional cuts,...
STX Remains Compelling Beta Exposure, Miners to Outperform in Lower Rate Environment
RATE EXPECTATIONS MOVING LOWER Last week, we discussed how rate expectations were a barrier to crypto moving higher and that we anticipate continued non-recessionary but soft economic data will help spur flows. Fast forward to this week, and we have seen a cool manufacturing PMI, a soft JOLTS report, and a services PMI in which the price component was below market expectations. The remaining important data for this week includes...
Articles Read 1/1
🎁 Unlock 1 extra article by joining our Community!
You’ve reached your limit of 1 free monthly articles. Please enter your email to unlock 1 more articles.
Already have an account? Sign In cef861-4b77f2-136500-6b44df-e6ac47
Already have an account? Sign In cef861-4b77f2-136500-6b44df-e6ac47