This week has been a masterclass in market volatility—from a historic bond rout to crypto’s wild swings. Global markets remain on edge, navigating fiscal expansion, policy shifts, and liquidity distortions. Meanwhile, crypto digests the US Strategic Bitcoin Reserve (SBR) announcement while awaiting signals from today’s White House Crypto Summit.
Let us break down the key drivers shaping the markets.
Macro: The Bond Rout, Fiscal Expansion & Trump’s Trade Tactics
The past week saw one of the most aggressive bond routs in decades, driven by Europe’s shifting fiscal stance and uncertainty over US economic strength. Germany signalled a historic shift with USD 1 trillion in potential defence and infrastructure spending. US yields remain volatile, hovering just above 4.2% for US10yr, while DXY hit its lowest level since November, confirming a macro regime shift.
The equity market remains under pressure, with S&P 500 at ~5700 and the Nasdaq 100 entering correction territory, as momentum unwinds across bonds, USD, bitcoin, and tech stocks. As previously noted, the USD has been topping out, and that move has played out well—DXY breaking lower, and EUR/USD surging past 1.0850, with 1.0940 now in sight.
Trump’s trade war walk-back continued this week, delaying Canada and Mexico tariffs until April, adding USMCA products to exclusions. His scoreboard is the stock market, and he is unlikely to let a steep correction play out without adjusting his approach.
Today’s NFP print is key. Expectations sit at +160,000, up from 143,000, but the Challenger report out yesterday flagged 172,017 job cuts—the highest February print since 2009. While the Fed has maintained its hawkish stance, weakening labour data could force a pivot. The March 19th FOMC meeting will be pivotal in setting expectations.
Crypto: The White House’s Bitcoin Bet & Market Volatility
Bitcoin’s wild ride from USD 79,000 to above USD 90,000 underscores its tight link to broader risk sentiment. The Strategic Bitcoin Reserve (SBR) announcement initially fuelled bullish momentum, but as details emerged, the market reacted with profit-taking.
The SBR will be funded by BTC seized through forfeitures, meaning the government will not actively buy BTC under normal circumstances. However, the Treasury and Commerce Secretaries are authorised to explore budget-neutral strategies to acquire additional BTC, ensuring no incremental cost to taxpayers. This effectively elevates BTC to a sovereign reserve asset, positioning it alongside traditional financial reserves.
The US Digital Asset Stockpile (USDAS), on the other hand, will consist of non-BTC crypto assets that can be liquidated for law enforcement purposes, crime victim restitution, or other statutory obligations. This distinction is crucial: BTC is recognised as a long-term financial asset, while other digital assets remain expendable.
This move legitimises BTC as part of US financial strategy but stops short of immediate large-scale government accumulation. The question now is whether other nations will front-run the US in establishing their own BTC reserves. China is a key contender, and if they move first, Trump may be forced to revise the EO to prevent the US from falling behind.
The White House Crypto Summit today is another focal point, but with the EO already out, it is unclear what additional bullish catalysts could emerge. A lack of substance could see further profit-taking across majors.
Looking Ahead: Key Themes to Watch
Looking ahead, the March 19th FOMC meeting will be a key test for the Fed’s hawkish resolve amid weakening economic data. The de-risking phase appears close to exhaustion, which could set the stage for a Q2 rally across risk assets.
While short-term volatility persists, longer-term positioning still favours upside.
Markets are shifting, narratives are evolving, and opportunities are emerging—stay ahead and stay nimble.
Happy Trading!
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