Hubbis Partners with Independent Reserve to Bring You Weekly Crypto News and Market Trends - Resilient Risk Assets Amid Inflation and Rising Yields
Despite rising bond yields and persistent inflation, many risk assets, including cryptocurrencies and US tech firms with sound balance sheets and large cash stockpiles, are trading independently of macroeconomic trends.
These assets perform differently from those burdened with debt and facing challenges in a tightening credit cycle. Cryptocurrencies, particularly, maintain pricing independence due to their unique supply dynamics, contributing to their uncorrelated risk profile, which is expected to persist after the Bitcoin halving.
Amid escalating geopolitical tensions in the Middle East, the direction of the risk asset market has become less clear and confined to a range. Crude oil prices have experienced volatility but are on the rise, currently trading just below $90/barrel. US 10-year treasury note yields have reached a peak of 4.44%, the highest for the calendar year. The upcoming release of US CPI data for March, scheduled for tomorrow evening Asia time, will be crucial for crude oil and treasury yields.
Federal Open Market Committee Chair Jerome Powell indicated in his recent communication that the Committee's base case for the calendar year 2024 includes 75 basis points of interest rate cuts. The upcoming US inflation print will likely determine the validity of this trajectory. Additionally, confirmation of either softening or persistent US inflation will be crucial for the AUD/USD currency pair, which has been trading within a range of US 0.6450/0.6650 for the last few months. While awaiting a catalyst, the current ranges are anticipated to eventually break.
On the OTC desk, as the halving approaches, BTC trading activity has increased, with both dip buying and opportunistic pre-halving selling occurring. This has resulted in a balanced flow across the desk. Despite outages in the Solana network causing transaction voids, there hasn't been direct concern from the OTC customer base. However, the outage has slowed down much of the SOL network altcoin enquiry. Notably, ETH has benefited from the outage, with ETH/BTC trading back above 0.05 after dipping below this level since Q1 2021, possibly due to switching or substitution.
Read this week's full market update here.
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