Weekly Market Update: Markets run on Fed cuts news

Bitcoin, along with equities, had a strong week off the back of the news from the Chair of the Federal Reserve saying they would begin cutting rates. While largely expected, the confirmation was enough to get those not buying the news into…buying the news I guess. 🤷‍♂️

Aside from that, there has been plenty happening in the crypto space. The F13 BTC ETF filings confirm that the ETFs are still largely a retail play.

The politics of blockchain / crypto are still evident. Candidate Harris is open to supporting crypto, while Telegram’s CEO got arrested. On top of this, Greyscale is launching an AVAX trust, Kraken got a win against the SEC and Bitcoin is still the best performing asset this year. The final point, stablecoin market caps is at an all time high.  

In macro market news, trade wars and real wars dominate, both affecting key commodities like Oil and semiconductor chips. 

Turning to the US Jerome Powell gave the people what they wanted to hear following Jackson’s Hole; policy is adjusting and a rate cut in September is a lock-in. There was a major revision of the job statistics which meant the jobs market wasn’t quite as robust as thought. 

In Europe PMI’s for July were solid, mainly off the back of an Olympics boost to services. EU manufacturing is struggling, but not as much as Germany where it’s looking increasingly bleak. 

In APAC, India’s economy is running hot, Japan’s CPI is steady and Chinese youth and graduate employment prospects are bad and getting worse… way worse. 

In Australia, their service sector is doing pretty well, manufacturing remains in contraction. Their CPI trended down in July but remains elevated. Finally, in New Zealand retail sales are still falling, as is employment. 

Market sentiment has improved significantly this week and now sits firmly in neutral territory.

Highlights this week: 

• The 7 day charts look like a 80/20 split of losers versus gainers. However most of the coins that lost ground were only down single digits.
• Our Buy-Sell ratio by order count remained in the normal range, however by Value, you were all net sellers this week. 
• There was a big shift towards BTC sales with the data clearly showing that there was a surge of profit taking as BTC recovered to $65k USD. 
• At the time of writing BTC was up 4% to end the week at NZD$101k (US$62k).  SOL was somewhat better, up 8%.  ETH and XRP were down 1% while BNB was down 8%.
• HOT was our best performing asset this week, up 20%.
• BNB was our worst performer, down 8% this week.

View all top gainers: Visit the top gainers page to find out more.

Highlights from the crypto space

The F13 filings on the BTC ETFs have been analysed. It looks like a quarter in volume, with the majority of holders being non-institutional. 

A blockchain startup that is using blockchains to stop IP theft by AI’s has been valued at $2bn. 

Traders have locked in over $350m in options that will mature just after the US election, effectively betting that the election will change prices with ⅔ riding the upwards bet. Watch out for volatility folks. 

The Solana ETF was apparently blocked by the SEC because they are still pushing the ‘SOL is a security’ agenda. 

Telegram’s CEO, Pavel Duruv was arrested in France as the platform was accused of not moderating illegal content. There are a lot of rumours swirling around focused on the motives. One thing is sure, Telegram’s native token, TON, took a beating.

Democratic presidential candidate Harris will apparently support measures to grow crypto. A potential 25% tax on unrealised gains, yeah not so good. 

Binance is beefing up its compliance team and has no plans to IPO itself, instead planning for a 100 year business. 

We haven’t posted this one in a while, Charlie Bilello’s chart on YTD asset performance. So despite last month, BTC is still doing pretty well.

The next Ethereum upgrade is scheduled for Q1 next year, called Pectra; here is a bit of an overview of what is coming. 

Greyscale unveiled an AVAX investment trust. 

Staying with Avalanche, Franklin Templeton announced it is expanding its tokenised Money Market Fund to that chain. 

A Californian Judge has ruled that the coins offered on Kraken aren’t securities, this means the SEC has to prove they are, in court, using the Howey Test. 

Justin Sun’s USDD stablecoin has lost its Bitcoin backing, and is only collateralized with TRX now. NFA advice, but run away, fast. 

🌎 Macro news TLDR: …Oil on the rise

Following on from last week’s point about tanking commodities prices, it appears that the tit-for-tat trade wars between China and other nations means that China is starting to implement export controls on some very important metals, like Tungsten used in chips and military applications. 

Israel’s conflict appears to be expanding as it is now engaged with Lebanon based Hezbollah. The Oil price is acting as a barometer for the increase in tensions.

U.S. economic news

The Bureau of Labour statistics revised down non-farm payrolls by over 800 000 jobs, the end result is that the jobs growth for the last year is at 1.9% which is still good, but this is down from 2.4%. 

The FOMC minutes for July show that some members argued for a 0.25% cut at that meeting which adds petrol to the September rate cut fire.

CME has the cut as a certainty, with ⅓ betting it’s going to be a 50 bps cut. August’s flash PMI’s paint a picture of contracting business and growing services.

Over the weekend Federal Reserve Chair Powell spoke after the central banker symposium at Jackson Hole, he told the market what they wanted to hear “ The time has come for policy to adjust”. 

Over in Europe….

PMI’s across Europe got an Olympics boost, however, are unlikely to last as forward orders look grim with industry cutting back on buying. Manufacturing continues to be very weak. 

The German business climate index (sentiment) is very weak and trending down. 

And in Asia Pacific…

China’s youth unemployment is back in the headlines, mainly because the Chinese started publishing data again. Prospects for university graduates look particularly poor at the minute. 

India continues to boom with August PMI’s confirming manufacturing and services are running hot at over 60. 

Japan’s manufacturing PMI crept back into expansion, and their CPI remained steady at 2.8%.

Australia’s picture is slightly different; on the PMi front, services are ok but manufacturing remains in contraction. Australian CPI for the 12 months to July 24 was 3.5%, down from June’s 3.8%. Rent and financial services are all over 6% currently.

New Zealand’s retail sales volume fell 1.2% in the June quarter, a trend that has been in force since December 2021. The number of fill jobs fell pointing to an increase in unemployment coming.

That’s a wrap for this week. 

Stay tuned for the next update.

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