Week-over-week performance:
- BTCUSD: 60,989 / +2.95%
- ETHUSD: 2,679 / +1.02%
- US10Y: 3.88% / -3 bps
- DXY: 101.99 / -1.10%
- GOLD (USD/OZ): 2,497 / +1.46% (!)
- SPX: 5,608 / +4.94% (!)
- NDX: 19,766 / +6.60%
- DVOL: 53.82 / -5.35%
- VIX: 14.66 / -29.25% (!)
Looking Ahead – Economic Calendar:
- Tuesday, 20 August: EU CPI, SNB Chairman Thomas Jordan speaks
- Wednesday, 21 August: FOMC Meeting Minutes
- Thursday, 22 August: US Jobless claims, End US Democratic National Convention
- Friday, 23 August: Jackson Hole Symposium
- Saturday, 24 August: Jackson Hole Symposium
On the macro side:
This week presents several key events that are expected impact the markets. One of the most anticipated events is Fed Chair Powell’s speech at the Jackson Hole Symposium, his first address since July’s CPI report, which revealed inflation at its lowest level since March 2021.
Additionally, major retailers are set to report their earnings, with analysts closely watching to see whether they benefitted from July’s strong retail sales or struggled due to rising costs.
The Democratic National Convention, which commenced on Monday, could have significant implications for Vice President Harris’s electoral prospects. According to Polymarket, the race between her and Trump is currently neck and neck, making the upcoming US election a central point of market speculation.
Kamala Harris’s proposals on price controls and housing subsidies could drive inflation, favouring gold but likely hurting crypto, given the Democrats’ stance. Conversely, a Trump win might boost crypto, especially if SEC Chair Gary Gensler is replaced by Hester M. Peirce, who advocates for a more supportive regulatory environment. SOL could see significant gains under her leadership, and similarly DOGE given Elon Musk’s influence.
On the FX side:
The US Dollar Index has retraced below 102, with the euro remaining in demand. Given this week’s events, the index could easily fluctuate between 101 and 103.
Chart 1: DXY 1d
On the crypto side:
Cryptocurrencies are lagging behind the broader market’s risk-on sentiment. While the S&P 500 is just 1% off its all-time high and the Nasdaq is 4.6% away, Bitcoin (BTCUSD) remains 21% below its peak. Market pressure and thin liquidity are contributing factors, but with the upcoming elections, significant moves could be on the horizon. I anticipate new highs if Trump wins, with a possible pullback to the USD 50,000 range if the Democrats prevail.
The derivatives market appears to support this outlook, with 08NOV24 options trading at a 10% premium over 25OCT24, alongside a positive call skew, indicating expectations of significant volatility.
On the chart, the situation remains stable, with resistance at USD 63,000 and support at USD 59,000.
Chart 2: BTCUSD 1d
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