October 23, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Nov 1st 2023

  • Probability of a 25bps ease → 2%
  • Probability of a 0bps hike → 98%

The News Room

China's e-CNY Used in Major International Crude Oil Transaction

China's digital currency, e-CNY, was used in a significant international crude oil transaction involving the purchase of one million barrels by PetroChina via the Shanghai Petroleum and Natural Gas Exchange (SHPGX). While the seller and transaction value remain undisclosed, this move aligns with the government's directive to utilize e-CNY in cross-border trades. As China works towards the broader adoption of its Central Bank Digital Currency (CBDC), the Bank of China introduced the "e-CNY hard wallet" in July. Collaboratively developed with China Telecom and China Unicom, this SIM card-based wallet connects users' mobiles to their digital yuan wallets and works even without power or internet connectivity. Emphasizing its ubiquity, security, and convenience, the Bank of China stated that SIM cards are the ideal medium for secure payments, enhancing the e-CNY's widespread adoption.

Bitdeer Technologies Announces $2 Million Share Buyback Plan

Singapore-based Bitdeer Technologies, a Bitcoin mining enterprise founded by Jihan Wu and listed on Nasdaq, has announced plans to repurchase its shares worth up to $2 million. This decision, effective until April 17, 2024, aims to use a variety of methods such as open market and privately negotiated transactions to undertake the buyback. The firm intends to utilize its existing cash balance for repurchases, aiming to stabilize its share price and offer long-term returns for shareholders. CEO Linghui Kong revealed earlier that Bitdeer mined 482 Bitcoin in September, marking a significant increase from the previous year, with nearly 45% of this mined at their new Gedu mining data center in Bhutan.

Tether Aims to Provide Real-Time Data on Reserve Backing in Coming Years

The issuer of the USDT stablecoin, Tether, aims to provide real-time data regarding its reserve backing in the coming years, as reported by Bloomberg. Although there's no set timeline, Tether's recent quarterly attestation revealed $3.3 billion in excess reserves, including $72.5 billion in U.S. Treasuries after moving away from commercial paper. The Commodity Futures Trading Commission (CFTC) fined Tether $42.5 million in 2021, asserting that USDT was not adequately backed between 2016 and 2018.

With a current market capitalization of $83.9 billion, Tether has grown significantly, boasting over $30 billion in daily trade volume. The firm recently appointed Paolo Ardoino, the former CTO, as CEO, as previous executive Jean-Louis van der Velde moved to an advisory position. Ardoino envisions Tether as a significant force in the future financial landscape.

Trading Desk Insights

Equity markets were trading slightly higher on Monday while participants geared up for key tech earnings releases. Reflecting on last week, the S&P 500 retreated by 2.4%, marking its inaugural weekly decline in the past month while Nasdaq retreated 3.2%, indicating its consecutive second week in the red.

The prominent 10-year Treasury yield momentarily surpassed the critical 5% threshold. Recent insights from the Federal Reserve Chairman, Jerome Powell, hinting at potential further monetary policy adjustments, seemed to amplify investors' apprehensions, leading to the uptick in Treasury yields.

This week is pivotal for earnings season, with dominant tech behemoths lined up to unveil their earnings. Market participants will keenly await insights from industry leaders like Alphabet, Amazon, Meta, and Microsoft, anticipating their reports to shape market direction.

In the crypto sphere, Bitcoin is showing significant strength. Since last Friday, BTCUSDT appreciated close to 8%, propelled by speculation surrounding an impending spot ETF approval. While some prognosticate an approval by year-end, others anticipate a more extended timeframe, speculating an SEC decision by January or even March. Regardless, the overarching market sentiment leans bullish. In a 24-hour span, liquidations jumped by 65% to $128 million, and Bitcoin's trading volume surged by 60% to $39 billion.

Analyzing the Bitcoin-to-Nasdaq ratio, it's evident that since October 15th, Bitcoin has overshadowed equities, outpacing them by more than 20%. The equity market grapples with the 'higher for longer' narrative, suggesting a potentially extended phase of high interest rates. Conversely, Bitcoin is potentially on the cusp of a bullish phase, especially with the looming spot ETF.

Technical Charts


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