Week-over-week performance:
- BTCUSD: 70,934 / +5.03%
- ETHUSD: 2,611 / -1.21%
- US10Y: 4.27% / +5 bps
- DXY: 104.3 / +0.37%
- GOLD (USD/OZ): 2,754 / +0.77%
- SPX: 5,823 / -0.51%
- NDX: 20,351 / -0.05%
- DVOL: 57.14 / +3.18%
- VIX: 19.8 / +7.73%
Looking ahead – Economic calendar:
- Tuesday, 29 October 2024: US JOLTs, Earnings $GOOG, $AMD, $PYPL
- Wednesday, 30 October 2024: US ADP Non-Farm Employment Change, US GDP, OpenAI DevDay, ChainLink SmartCon (Day 1), Binance Blockchain Week Dubai (Day 1), Earnings $MSFT, $META, $MSTR, $COIN
- Thursday, 31 October 2024: BoJ Interest Rate Decision, EU CPI, EU Unemployment, US PCE, US Jobless Claims, CH GDP, Chainlink SmartCon (Day 2) Binance Blockchain Week Dubai (Day 2), Earnings $AAPL, $AMZN, $INTC
- Friday, 1 November 2024: CH CPI, US Avg Hourly Earnings, US NFP, US Unemployment, IMX Token Unlock (2% MC, USD 43 million), Earnings $HOOD
On the macro side:
This week is packed with macro events, and while most attention is on the elections, let us not overlook that the FOMC meeting is only nine days away.
The market is pricing in a 98.5% chance of a 25 bp cut, with an additional 25 bp cut in December seen as 70% likely. The one-year forecasted rate sits 1.25% below the current range of 350-375 bps, providing a notable premium in bonds, with the 2-year UST at 4.13% and the 10-year at 4.27%.
The key indicators, PCE and NFP, will likely drive macro movements, and I expect corresponding activity in both FX and equities, especially as the VIX holds at elevated levels.
This week’s earnings reports from high-tech and crypto-related companies are also in focus. I am particularly watching $COIN and $HOOD, along with statements like last week’s from $MSFT regarding a potential bitcoin addition to its reserves.
Short-term events will likely drive significant volatility, but increased spending and lower yields are fundamentally bullish.
On the FX side:
The FX space remains crowded, with the DXY still trading near the upper end of my target range. At these levels, I amm cautious about buying USD, especially as seasonality around year-end often sees USD softening (in contrast to risk assets).
While I currently favour a move down to 103.5, supportive data from the BoJ, US PCE, and NFP could drive another leg higher toward 105, where I would be more inclined to short the USD.
Chart 1: DXY 1d
On the crypto side:
The market is heating up.
BTCUSD has climbed back to the USD 70,000 range after holding firmly at the USD 65,000 retest last week.
As I have mentioned, I believe we have moved beyond a mean-reversion phase, with structural indicators pointing bullish and demand remaining strong.
Current levels are undoubtedly hot, and there is clear interest in keeping BTCUSD below USD 74,000. However, in my view, it is only a matter of time before we see further upside, with the upcoming election likely acting as a major catalyst.
On the chart, USD 72,000 stands as resistance, while USD 68,000 provides support.
Chart 2: BTCUSD 1d
Beyond BTC, my key consideration is: What if BTCUSD breaks all-time highs? My play here would be a rotation into ETH and SOL, with SOL being my top pick. I see potential in SOL due to its exposure to DeFi (lending, borrowing, and meme assets) and catalysts like Hester Peirce’s influence at the SEC.
In other news, regarding potential sanctions – such as the USDT rumours from last Friday – it is critical to consider who the prosecutor is. As long as it is not the CFTC, I view these dips as free buying opportunities.
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