Week-over-week performance:
- BTCUSD: 66,888 / +0.40%
- ETHUSD: 3,335 / -3.4%
- US10Y: 4.18% / -7 bps
- DXY: 104.63 / -0.01%
- GOLD (USD/OZ): 2,390 / -0.29%
- SPX: 5,464 / -1.80%
- NDX: 19,060 / -3.85%
- DVOL: 49.68 / -26.56%
- VIX: 16.62 / +8.41%
Looking Ahead – Economic Calendar:
- Today, 30 July: German Preliminary GDP (QoQ) & CPI, CB Consumer Confidence, JOLTs Job Openings
- Wednesday, 31 July: China Manufacturing PMI, BoJ rate decision, FOMC
- Thursday, 1 August: Swiss national holiday, BoE rate decision, US manufacturing PMI data
- Friday, 2 August: NFPs, US Unemployment Rate, Swiss CPI data
On the macro side:
This week, all eyes are on the FOMC and its interest rate decision. Despite last Friday’s better-than-expected PCE figure (2.5% expected, 2.6% actual), the case for the Federal Reserve to consider a rate cut remains strong. The odds of a rate cut in July have risen slightly, as the weakening of the services component has been interpreted by markets as less inflationary pressure going forward.
Chart 1: FOMC target rate probabilities
Also important this week are the US Nonfarm Payroll (NFP) and Unemployment data due on Friday, which will provide further insight into the economic outlook. The unemployment rate has been rising gradually since the beginning of the year and is expected to reach 4.1% on Friday.
Chart 2: US unemployment rates
On the FX side:
EUR/USD fell below 1.0850 (EUR/CHF held above 0.95), indicating a potential further downtrend, and hit a two-week low near 1.0800. German Q2 GDP growth is expected to slow from 0.2% to 0.1%, while EU annualised GDP growth is forecast to rise from 0.4% to 0.6%, with a quarter-on-quarter decline to 0.2%. On Wednesday, preliminary EU inflation is expected to fall to 2.8% from 2.9%.
On the crypto side:
Following Donald Trump’s speech at the Bitcoin Conference in Nashville on Saturday night, the crypto market experienced volatility, driven by hopes of an announcement on the strategic bitcoin reserve. Despite lingering doubts about Trump’s deep understanding of cryptocurrency, his speech was broadly bullish for the sector. Key points included his commitment to retain and never sell the US government’s current bitcoin holdings as part of a national strategic reserve, his plan to fire Gary Gensler on his first day in office to end Operation Chokepoint, his intention to bring crypto leadership to the US and his aim to promote a balanced regulatory environment for cryptocurrency.
Yesterday, Bitcoin (BTC) rallied to the key $70,000 level, but was strongly rejected. Coinciding with the rejection, the US government moved approximately $2 billion of Silk Road tokens to an unknown wallet, causing BTC to fall to lows of $65,800 and resetting the open interest build to last Friday’s levels. The first support level is now USD 65,800, followed by USD 64,000. On the upside, the first level to be reclaimed is USD 67,000, then USD 68,200, from where it can return to USD 70,000.
Chart 3: BTCUSD 1d
ETHBTC bottomed last Saturday at 0.04735 and has since outperformed BTC, which was rejected overnight at 0.05. Due to the sell-off in Grayscale ETFs, traders had mainly focused on BTC and SOL longs, while ETH was less crowded and better positioned, allowing for some outperformance as bitcoin’s dominance peaked at 56.8% yesterday.
Yesterday, BTC saw net inflows of $124.1 million, while ETH saw net outflows of $98.3 million. Grayscale sold over $210 million, leaving over $7 billion in the Grayscale ETH ETF, suggesting that the chances of a strong ETH rally in the short term are rather slim.
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