As expected, BOJ has frozen rates without raising them. BOJ has repeatedly said that if things are okay, they will raise rates in 2025, and USDJPY has been slightly down on this news. I don’t expect them to raise rates in 2024 unless something extraordinary happens.
Q3 GDP is +2.8%, slightly below the 2.9% forecast. However, consumer spending has been quite strong. It’s unfortunate that the housing sector is weakening, but overall it looks good and the US economy still looks strong.
EU GDP was better than expected at +0.4% QoQ and +0.9% YoY. I had been expecting DXY to fall and EUR to rise this Monday, and so far it looks to be going well. Further moves will be determined by today’s PCE and NFP data. I expect PCE to continue the disinflationary trend, and NFP to be a moderate number, neither too high nor too low. The strong ADP on Wednesday suggests that private sector employment is still strong.
This week has been a week of earnings announcements from many companies. GOOGL, MSFT, META, etc. were good overall, but I don’t think they were good enough to meet market expectations. Also, the accounting issues of SMCI seem to have caused doubts and uncertainty about AI in the US stock market, and SPX is down. However, AI companies’ CAPEX does not appear to be decreasing, and MSFT has provided an optimistic outlook for AI revenues. It seems important to resolve the SMCI issue.
No one is interested in ETH, but I personally am looking for opportunities in ETH. Of course, BTC is the largest in my portfolio, and there is no doubt about it. However, ETH seems likely to be bullish if the market is bullish overall. Above all, the P&L ratio looks good. I wouldn’t say ETHBTC is at the bottom, but it looks low enough.
The Florida Treasurer has called for adding Bitcoin to state pensions with a letter supporting a “Strategic Bitcoin Reserve.” Saylor has also announced a three-year plan to buy $42B [21+21] worth of BTC — very positive news.
With the Israel-Iran issue somewhat resolved [Israel satisfied with a retaliatory attack and Iran’s willingness to attack significantly reduced], BTC had a very strong week, surpassing 72K. Of course, expectations for Trump’s election may have played a large role. While we don’t know the outcome of the election, a Trump victory is clearly positive news for BTC. I won’t speculate on whether there will be a Sell The News or not.
There is a lot of discussion about whether the stock market will be bullish or bearish after Trump’s election, as everyone has different opinions. I think BTC is currently in a very special situation in the “Trump trade.” Simply put, it is likely to be the asset that will receive the most attention in the Trump sector. I expect Trump to support BTC even after he is elected. He likes the dollar and will want to reestablish the status of the reserve currency that was weakened by Biden. We can wonder.
Why did Trump suddenly like BTC?
“Growth in stablecoins has resulted in a modest increase in demand for short-dated Treasuries”
“Tokenization might create additional access to Treasuries from both domestic and global pools of savings, particularly from households and smaller financial institutions, which can lead to incremental demand for U.S. Treasuries”
“We expect regulatory efforts in the years to come to encourage this trend”
“If history serves as any guide, stablecoins will need to be regulated like narrow banks or money market funds”
It’s all just my opinion, but I think Trump judged that BTC would help strengthen the dollar hegemony. All crypto transactions, including BTC, use stable coins, and most use dollar-based stable coins such as USDT and USDC. This is definitely a very good situation for the US and the dollar. The US Treasury also acknowledges this and has issued a positive presentation. Additionally, it may have the effect of causing Chinese capital to flow out and capital inflow to the United States. [Strengthening the dollar hegemony while keeping China in check]
In conclusion, I think Trump will make regulations on BTC/crypto clearer, allowing the US to lead the crypto industry.
The election is just around the corner, and there will be a lot of news and confusing events/price movements. I am not interested in short-term movements and am still bullish on the long term. Be careful of excessive leverage trading.
NFA DYOR
<Source: MacroMicro, Liz Young Thomas, Earnings Whispers, The Transcript>
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