Soft Landing Back on the Table, Seasonal Headwinds Worthy of Attention
Macro Data Points to a Soft Landing
The global deleveraging event last week was driven by weakening economic expectations and rising fears of a potential policy error by the Federal Reserve. At the height of this uncertainty, the market priced in a 50 bps cut for September, as recession risks took center stage.
However, in just a few days, the narrative has shifted. The market is now leaning back towards a soft-landing scenario rather than one driven by recession fears. Recent economic data has supported this pivot, showing signs of disinflation without signaling an imminent downturn:
- ISM Services PMI: 51.4 vs. 51 forecast
- PPI: 0.1% vs. 0.2% forecast
- Core CPI: 0.17% vs 0.19% forecast
- Retail Sales: 1% vs. 0.3% forecast
As a result, fed funds futures have recalibrated, reducing expectations for cuts from 50 bps to 25 bps.
This suggests that while the Fed is still expected to ease policy, it can afford to do so more gradually. The economy remains stable, inflation is easing, and the urgency for aggressive cuts has lessened.
This is good news for the crypto market. A soft landing implies looser monetary conditions, which in turn expand liquidity and support speculative investments. As we move toward this softer outcome, we believ...Reports you may have missed
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...
BTC ETFS SEE MASSIVE INFLOWS: IS CRYPTO NATIVE CAPITAL SIDELINED? BTC ETFs saw over $2.2 billion in net inflows across all spot ETFs from Monday through Wednesday of this week—the largest three-day sum of inflows since the products launched in January—bringing the five-day moving average to north of $500 million. This is certainly impressive and speaks to the explosive breakout we have seen this week. Source: Farside Investors, Fundstrat We've...
SOL OUTPERFORMANCE Last week, we highlighted the explosive activity on Solana as DEX volumes surpassed those on Ethereum, leading us to increase SOL's weighting in our Core Strategy. These elevated DEX volumes have persisted through this week, and SOL has dramatically outperformed, breaking out against ETH and gaining ground against BTC—all amid a sharp bond selloff and a rally in the DXY. Source: Artemis Source: TradingView A significant portion of...
