September 28, 2023

Markets Insights

Economic Calendar

Next FOMC meeting: Nov 1st 2023

  • Probability of a 0bps hike → 84%
  • Probability of a 25bps hike → 16%

The News Room

SEC Delays Decisions on Proposed Ethereum ETFs from Ark and VanEck

The U.S. Securities and Exchange Commission (SEC) has postponed its decision regarding the proposed ARK 21Shares Ethereum ETF to December 26, as per a recent filing. This delay comes less than a month after Ark Invest and 21Shares submitted their application to the SEC amidst an industry-wide anticipation for the inaugural crypto fund. The SEC has also deferred its decision on the VanEck Ethereum ETF to at least December 25, and the ARK 21Shares Bitcoin ETF to January 10 next year. The regulatory body stated the extensions will allow adequate time to evaluate the proposals and the implications entailed. This move reflects the SEC's cautious stance as the government faces a potential shutdown, further drawing out the crypto industry's wait for a regulatory green light on crypto ETFs.

Thailand's SCBX Partners with Korean Firm Hashed to Drive Web3 Adoption

SCBX, the digital assets arm of one of Thailand's largest financial institutions, has entered into a partnership with Hashed, a prominent Web3 investor from Korea. The collaboration aims to promote the adoption of decentralized technology both regionally and globally through joint R&D efforts and events. Hashed's CEO, Simon Seojoon Kim, expressed optimism that the alliance will bolster the growth of the Web3 ecosystem beyond Southeast Asia.

While many Asian financial giants remain wary of crypto, SCB has made significant investments in the space, including the launch of a $50 million blockchain fund by its venture arm, SCBX. Furthermore, as part of this collaboration, Hashed's research hub, ShardLab, will conduct tests on Web3 technologies tailored to address specific challenges in Southeast Asia's business environment. Details on specific joint projects are anticipated in the coming days.

Bank for International Settlements (BIS) Urges Nations to Establish Legal Frameworks for CBDCs

In a recent speech at the BISIH-FSI conference in Switzerland, BIS General Manager Agustín Carstens urged nations to establish legal frameworks conducive to the development of central bank digital currencies (CBDCs), warning that outdated laws could impede their progress. Carstens highlighted the need for legal clarity as 80% of central banks, according to a 2021 IMF paper, face uncertain or restrictive legal environments, despite a BIS survey showing 93% of them actively engaging in CBDC endeavors.

Emphasizing interoperability between jurisdictions to prevent a fragmented system, Carstens advocated for a balanced legal framework to uphold financial integrity while ensuring user protection and choice between cash, CBDCs, and commercial bank money. He remarked on the decline in cash use, fueled by the rise of cryptocurrencies and stablecoins, noting, however, that these new forms of private money lack the stability and backing provided by central banks, underscoring the pressing need for robust legal frameworks to guide CBDC development and deployment.

Trading Desk Insights

Equity futures showed a modest decline on Thursday amid the ongoing concerns of escalating rates that have shadowed this particularly challenging month and quarter for equities.

The 10-year treasury yield recorded a new 15-year peak during Thursday's early trading. Recent data highlighted a robust labor market as jobless claims reported figures better than anticipated. Any sharp increase in rates stirs recession fears, leading equities to new depths. Just this week, the S&P 500 dropped to its lowest point since June, corresponding with the 10-year yield reaching its highest since 2007.

From an economic standpoint, the final GDP data for 2Q2023 came in at 2.1%, slightly below the projected 2.2%. In other noteworthy events, Fed Chairman Powell is slated to address a town hall gathering of educators in Washington DC. All eyes are now set on the forthcoming PCE price index data scheduled for release on Friday, considered the Fed's favored inflation gauge. Additionally, Wall Street remains vigilant about the ongoing discussions in Washington pertaining to the U.S. spending bill, with the October 1st deadline looming.

On the energy front, oil prices soared to a year's high, driven by a decline in crude reserves at a pivotal storage facility to levels unseen since July of the previous year. Specifically, crude stockpiles in Cushing, Oklahoma dwindled to 22 million barrels by the last week of September, bordering the operational base line.

BTCUSDT is rebounding off the intraday support of 26,000 as well as the declining trend line, serving as a great entry for a long position. As long as this level holds, we expect to reach the upside targets of 27,500 and potentially 28,100. As long as there are no new catalysts within the crypto industry, then we believe Bitcoin should continue to follow macroeconomic events as well as the stock market.

As Ethereum staking surged to 7.4M ETH, ETHBTC rebounded by 4% in a week. ETHUSDT broke out of a declining trend line and is looking to break above the previous highs of 1670 and 1730. In the last two weeks, LINK has jumped by almost 40% while AAVE also squeezed by almost 30% in the same time frame. Altcoins are starting to look more interesting as BTC continues to grind higher.

Technical Charts


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