Week-over-week performance:
- BTCUSD: 103,296 / +1.76%
- ETHUSD: 3,210 / -0.56%
- US10Y: 4.55% / +0 bp
- DXY: 107.87 / -0.62%
- GOLD (USD/OZ): 2,742 / +0.62%
- SPX: 6,012 / +0.27%
- NDX: 21,117 / -1.51%
- DVOL: 57.88 / -6.84%
- VIX: 17.89 / -6.87%
Looking ahead – Economic calendar:
- Tuesday, 28 January 2025: $XRP Community Day
- Wednesday, 29 January 2025: FOMC, Earnings: $MSFT, $META, $TSLA
- Thursday, 30 January 2025: ECB Interest rate decision, Earnings: $AAPL, $AMZN
- Friday, 31 January 2025: US Core PCE
On the macro side:
Equities gave up some of their recent gains, driven by the rise of DeepSeek. The new Chinese entrant has demonstrated that AI development is possible without significant financial resources or cutting-edge hardware, prompting a reassessment of tech valuations.
The Nasdaq 100 (NDX) led the decline, with AI and tech names posting notable losses. However, the S&P 500 (SPX), which still has a significant tech weighting, managed to remain slightly higher on a week-over-week basis.
Meanwhile, the VIX showed little reaction to these developments, despite the Federal Reserve and ECB policy rate decisions coming up this week.
In my view, short-term volatility in traditional equities is likely to rise. The 7-day realised volatility (RV) for the SPX is currently at 15.6%, which is close to its median levels.
On the FX side:
The USD continues to hold firm, with the DXY remaining steady around 108.
EURUSD faced rejection at 1.052, while USDCHF found support at 0.8965 and resistance at 0.92.
This range-bound trading is expected to persist unless this week’s central bank forward guidance introduces a significant shift.
On the crypto side:
Correlations between crypto assets and equities have driven flows and de-risking activity. The total crypto market cap experienced an intraday drop of USD 227 billion but has now stabilised within the December-January range.
BTCUSD continues to show resilience, with dips below USD 100,000 proving short-lived, while ETHUSD remains weak across all time frames.
There is noticeable appetite for upward momentum.
Expect volatility around the US session and keep an eye on US-listed names, as I anticipate correlation to decrease.
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