Weekly Wire | Recession Cooling while Election Heats Up
This Week's Market News
The recent US jobs data and inflation came in slightly better than market expectations and JP Morgan officially called a soft landing for the US economy. Meanwhile, China continues to announce easing measures to boost activity, and the ECB is expected to cut rates by 25 bps at their policy meeting this week off the back of a slowing European economy. Overall, the macro backdrop remains supportive for risk assets with global liquidity on the rise and recession fears tempered for the moment.
As the US election date nears, financial markets’ sensitivity to election odds continues to increase with a mild ongoing crypto rally. Market gambling odds show the chance of a Republican sweep increasing from approximately 30% to 39% over the last week and Trump leading Harris 56% to 43% in the U.S. presidential elections. Polling data, however, tells a different story.
In other news, BTC ETFs saw $350m of inflows last week and started this week off with another $500m. Non-U.S. ETH ETF cashflow is less optimistic.
Crypto in Charts
The chart below shows the ratio of BTC to Gold. BTC has underperformed Gold since hitting the highs in early March of this year. The ratio seems to be recovering off the lows set in August and September, when it bounced twice off the 50% retracement of 2023-2024 advance.
Source: TradingView
Notable Crypto News
Stripe is the first to utilize a new stablecoin payments platform from Paxos | The Block
Standard Chartered says bitcoin could revisit all-time high before US election | The Block
Blockstream secures $210 million to drive Layer 2 growth and expand its bitcoin treasury | The Block
Kamala Harris Speech Offers No Further Details on Crypto 'Regulatory Framework' (coindesk.com)
Bitcoin (BTC) Price Bounces 7% to $63K as Crypto Traders Eye China Stimulus Update (coindesk.com)
The Macro Week Ahead
The week ahead has a lot in store for us in terms of economic data. We will get UK and Japanese inflation, US retail sales, and a wealth of Chinese data (GDP, Industrial Production and Retail Sales). Thursday also brings the ECB interest rate decision where a 25 bps cut is largely expected.
Financial Advice Disclaimer: Nothing in this article constitutes professional or financial advice, performance data or any recommendation that any specific cryptocurrency, portfolio, index, investment product, transaction or investment strategy is suitable for any specific person. You assume the sole responsibility of evaluating the merits and risks associated with all financial decisions and should seek the advice of a registered financial advisor when in doubt.
