BTC and ETH regained last week, trading near $29,340 and $1,890 on Friday, up +7.6% and +2.3% as markets welcomed the latest PCE data showing a cooling of inflation – inflation rose 4.2% and core inflation 4.6% for the 12 months ending in March, down from 5.1% and 4.7% core inflation in February – and overlooked a declining GDP growth for Q1 2023 of +1.1% annualised from 2.2% in Q4 2022.
US Equities also rose last week with markets benefitting from the strong corporate earnings despite concerns about regional banks and inflation. S&P and Nasdaq closed the week near 4,169 and 12,226 up +0.9% and +1.3% from their level a week ago – 4,133 and 12,072
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US Treasury yields edged lower this past week as markets adjusted their Fed bets for the upcoming FOMC meeting in the wake of the release of the latest inflation and economic data. The yields on the 10Y and 2Y Treasury notes closed near 3.43% and 4.01% on Friday – from 3.58% and 4.19% the week before. Markets are currently pricing in a 92% chance of a 25-basis point hike during this week’s FOMC May meeting – which would bring the target rate range to 5.00 – 5.25%.
DXY drifted slightly lower, closing near 101.67 on Friday from 101.72 the week before and Oil price continued its streak of weekly losses with markets worried about demand prospects in China and a weakening economic backdrop combined with a hawkish Federal Reserve, feeding fears of a recession in the US. The WTI exchanged nearly $77 on Friday from $78 the previous week.
BTC and ETH are moving lower today as investors brace themselves for a busy week where Wednesday’s FOMC rate decision and Friday’s latest NFP data for the month of April should take centre stage this week. Investors will also keep an eye on the earnings season with major companies set to report – Apple, AMD, Pfizer, Royal Dutch Shell, Starbucks, and Uber technologies, among others.
Client Profits
No changes were made last week.
We kept our short positions on BTC and ETH we opened when BTC and ETH neared the $30,100 and $2,010 levels last week, which currently represent strong unrealised profits.
The exposure to the market is still 12% of the AUM, the rest being in cash.
BTC
BTC regained last week, trading near $29,340 on Friday, up +7.6% as markets welcomed the latest PCE data showing a cooling of inflation – inflation rose 4.2% and core inflation 4.6% for the 12 months ending in March, down from 5.1% and 4.7% core inflation in February – and overlooked a declining GDP growth for Q1 2023 of +1.1% annualised from 2.2% in Q4 2022.
BTC’s 30-day Historical Volatility – HV- is nearing 42%, slightly higher than its level from a week ago.
BTC 30-day volatility – 6-month view
BTC moved upwards throughout the past week with price action nearing $29,900 on Thursday before retracing and settling near $ 29,250 over the weekend.
BTC’s performance for April is up +2.9%. The month-to-date performance for May is now of -3.8% with the YTD performance for 2023 of +70%.
BTC is dropping today, evolving near the $27,700 mark as markets await the FOMC rate decision and the NFP job data later this week. The $28,700 region acts as the next minor resistance while the next minor support to watch on the downside is the $27,000 level with the $25,000 major support next and another major support near $21,900 further below.
ETH
Like BTC, ETH regained last week, trading near $1,890 on Friday, up +2.3% on the week as price action briefly reached $1,960 during Wednesday’s session before settling near $1,900 and drawing a bear flag. ETH retraced on Sunday towards $1,860, realizing a performance for the month of April of +3.01%.
ETH is continuing its retracement today, exchanging near $1,815, outside of the upward-sloping parallel channel with the lower band of our upward-sloping channel acting as the next support, currently near $1,740 with major support near $1,500.
The MTD performance for the month of May is now -2.4% and the YTD performance for 2023 of +53%.
Other markets
US Equities also rose last week with markets benefitting from the strong corporate earnings despite concerns about regional banks and inflation. S&P and Nasdaq closed the week near 4,169 and 12,226 up +0.9% and +1.3% from their level a week ago – 4,133 and 12,072.
S&P and Nasdaq’s MTD performances for April were +1.46% and +0.03% and both indices ended today’s session up, near 4,167 and 12,212. The MTD performances for May are now close to flat for both indices and the YTD performances are +8.5% and +16.8% respectively.
DXY
DXY drifted slightly lower, closing near 101.67 on Friday from 101.72 the week before and is now moving moderately higher today as markets await the upcoming economic data and the Fed interest rate decision on Wednesday.
The main catalyst to watch for DXY this week should be the Fed’s rate decision – a 25bps rate hike expected – and the NFP scheduled for Friday.
The index is currently near the 102.1 mark and evolving below our upward-sloping trendline currently at 102.5 and acting as resistance. Further below the 100.7 level acts as support in the downside.
US Treasuries
US Treasury yields edged lower this past week as markets adjusted their Fed bets for the upcoming FOMC meeting in the wake of the release of the latest inflation and economic data. The yields on the 10Y and 2Y Treasury notes closed near 3.43% and 4.01% on Friday – from 3.58% and 4.19% the week before. Markets are currently pricing in a 92% chance of a 25-basis point hike during this week’s FOMC meeting – which would bring the target rate range to 5.00 – 5.25%. The 10Y yield and the policy-sensitive 2Y are currently near 3.57% and 4.15% from 3.49% and 4.09% last Monday.