Today is CPI Day. The current macro environment, a combination of a slow but growing economy + disinflation, still persists. Today is the day we get further confirmation on that. China’s CPI data was released lower than expected. I still think the disinflation trend will continue, but with CPI already remaining low… It is very dangerous for someone without a position to place excessive bets on risky assets.
I expect today’s data to have a real impact on bond movements. Momentum is likely to shift.
Elevated inflation is not the only risk we face. We’ve seen that the labor market has cooled really significantly across so many measures.…It’s not a source of broad inflationary pressures for the economy now. – Jerome Powell
2Y is still the same. The upside potential is low and only downside potential remains… I don’t know when interest rates will be lowered, but looking at Powell’s recent remarks, it feels like the possibility has increased. I will be watching to see how bonds move after the CPI data is released.
I think the stock market is making the right moves in this macro environment… ES breaks new highs every day. What I’m paying attention to these days is Russell’s movement. With yesterday’s advance, Russell is approaching the plumb line again and looks likely to break through the triangle convergence.
What will happen to the stock market if Russell shows good performance?
BTC is showing unusually weak movements. Still trading sideways in the lower range since $53,000 last week. There are no special movements. Most likely you are waiting for CPI data. I believe there is still a risk of BTC falling further, but I feel it is at a level where it is difficult to be sure what moves it will make. If it falls once more, it seems likely that it will fall to $50,000 to $48,000, and if so, it seems likely that it will hit the bottom.
I will be watching to see if BTC actually gets bids after data is released today showing that disinflation is continuing. I expect BTC to rise today, but… It would be a very strange phenomenon if stocks and bonds rallied but BTC did not. This is proof that it is very weak.
200DMA (58.8k~59k) recovery? Further decline?
Mt.Gox, sentiment has turned negative due to news of the German government selling, but it appears that these news are now almost at an end. Now the German government doesn’t have much coin left. BTC ETF inflows this week are very high at +$700M. I’m not sure if this is exactly pure buying, but someone bought on this dip and the worst emotions.
BTC DVOL moved from 40s > 50s last week and is currently at 49. If we move sideways throughout the summer, it will probably go lower, but compared to ETH, BTC Vol still feels like a low level. There were two special transactions.
- Purchase of 54k July put options, seen as a hedge against CPI.
- BTC falls and buying the December-March call spreads.
NFA DYOR
<Source : TradingView, Ambardata, Arkham, sosovalue, FinancialJuice, WSJ, Investing.com>
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