Week-over-week performance:
- BTCUSD: 94,470 / +2.86%
- ETHUSD: 3,411 / +8.94%
- US10Y: 4.29% / -11 bps
- DXY: 107.12 / +0.77%
- GOLD (USD/OZ): 2,621 / -0.04%
- SPX: 5,987 / +1.60%
- NDX: 20,804 / +1.29%
- DVOL: 61.78 / +3.28%
- VIX: 14.61 / -6.17%
Looking ahead – Economic calendar:
- Wednesday, 20 November 2024: US CPI October, NVDA earnings
- Tuesday, November 26: US Building Permits, US CB Consumer Confidence, FOMC Minutes, RBNZ Interest rate decision Wednesday, November 27: US GDP, US Jobless claims, US PCE
- Thursday, November 28: Thanksgiving Day (markets closed), DE CPI
- Friday, November 29: Thanksgiving Day continues in the US (early close), CH GDP, EU CPI, $IMX Unlocks 1.47% MC
- Saturday, November 30: $1INCH Unlocks 7.7% MC
On the macro side:
This week will be relatively quiet on the macroeconomic front, with the FOMC minutes and US PCE data being the key highlights.
Recent comments from several Fed officials on the state of the US economy have aligned with a theme introduced by Chair Jerome Powell: a December rate cut is not guaranteed. The central bank has indicated it may slow the pace of easing given the diminishing risks to the economy.
Implied probabilities from Fed Funds Futures currently place the likelihood of a 25 bps cut at 56%, down from 76% a month ago, while the 1-year outlook remains largely unchanged.
In my view, any signals from the bond market will likely dictate the direction of risk assets in the near term.
It is also Black Friday week, which means equity markets will be closed on Thursday, with only a half-day of trading on Friday. Historically, this holiday week has been characterised by low trading volumes and erratic, one-directional moves. I anticipate a similar pattern this year.
On the FX side:
The US dollar reached a 2-year high on Friday, peaking at 108.07. Any slowdown in rate cuts will likely provide further support for the USD, potentially pushing it even higher. However, there is significant room for the USD to move lower, and this is where I see an opportunity to sell the dollar.
On the crypto side:
BTCUSD made an attempt at the $100k level, reaching $99,860 on Friday, before retracing and finding solid support in the $92.5k–$93.5k range. This demand is largely driven by MicroStrategy, with Michael Saylor hinting at additional bitcoin purchases.
One key factor to consider is how MicroStrategy ($MSTR) and similar entities are funding these purchases. They are surely selling equity but they are also issuing convertible bonds at 0%, which essentially include OTM options. With the 30-day IV for $MSTR at an impressive 179.4%, these options are already ITM, making them exceptionally valuable. MicroStrategy is well aware of this dynamic, and as long as IV remains elevated, they are likely to continue issuing convertible bonds to buy more bitcoin. This trend is far from over.
From a technical perspective, holding $92k is crucial from a psychological standpoint, with $90k serving as a secondary support level. On the upside, $100k remains the key resistance level to break.
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