Yesterday, he said that the market is magic. In anticipation of high CPI, the risk market actually rose. Unfortunately the rally was held back after less than two days. The response from yesterday's day was not very good, but there was little guarantee of a positive trend. But the risk markets will not be able to sit still after OPEC+ begins to announce production cuts in the afternoon. Already-weary economists are playing a new game, anticipating lower employment and rents.
The view that the Fed in November had to respond to international calls, even without considering the economy or the US mid-term elections, and that the Nick, the Fed's mouthpiece, had unprompted two pieces of good news for "interest rate cuts," namely a full decline in the employment data, was entirely in line with the Fed's expectations, given that the Fed has only reduced economic growth and discouraged such purchases. to reduce inflation effectively. Another piece of news is about the rent investigation. Based on current statistics, the U.S. rental market cooled significantly in September, and rents also fell. The main figures for the CPI and core CPI are, it is known, food and housing, which are the most important, and prices have been falling since March, but rents have not declined.
In particular, it is not clear from current CPI projections whether there is any statistical impact on CPI from falling rents. So when this news appeared, there was widespread market skepticism about the Fed raising rates, believing that the Fed might change based on current international conditions, and yesterday the CME predicted that the minimum likelihood of a 75 basis point rate increase in November was around 50%. These are the main reasons for yesterday's more than 3% jump.
And here lies the magic. Expectations are good, but reality has cooled the hands of economists. Also yesterday, last night, OPEC+ officially announced that it would cut oil production. Not only did it reduce oil production by one million barrels a day, as previously expected, but by two million barrels a day. And when that information was released, the price of oil, which was already on its own, rose irrepressibly, to almost $94 for Brent.
The price of WTI is closer to $88.50, which is already well above the September average, so despite expectations of falling rents, the price of oil as a "country on wheels" is a much higher share of inflation than the headline figure, which is why the rise in the NASDAQ futures was cut short, and the Fed's concerns are back after the OPEC+ announcement. This would have been destructive to market expectations, even if the economic school once again reiterated that the 2m b/d cut would have no real impact, and believed that oil prices had reached the peak, and the US strategic reserve oil was a sign of reducing its holdings. This shows that the US government has been selling its oil reserves on the US market at low prices, and recalls the $80 purchase by the Biden administration last month of American oil as a bargaining chip in the midterm election. The release of these chips did lower US oil prices, but there is still a month left before the vote, and a reversal of the higher oil price will mean that all previous efforts have been in vain, which is unacceptable to the Democrats. So the Biden administration is again preparing to release strategic oil reserves to fight rising prices, and the White House is using a good window to say that OPEC+ "will not be responsible for cutting production," which is a rare occurrence in the United States.
However, thanks to the president's good wishes, the NAQ futures showed signs of a reverse trend. From a drop of nearly 2%, they directly pulled back to the high starting point. As a result, the BTC and ETH also showed a rebound trend. It seems that what matters is not the purchasing power of Europeans, but also the price that the president can pay for the midterm elections. But by its very nature, when inflation is not under control, the market is still going strong against the Fed.
The next step, then, is to see whether rents can make a difference, with September's CPI release still a week away. And, despite the risk-market reversal following the oil-price event, the CME's expectations of a November rate hike have moved closer to 75 basis points, which means that the risk-markets are probably not at the bottom of the equation, if the Fed does not offer a useful explanation for the midterm elections.
And the impact goes beyond that. Despite stock markets' best expectations, the dollar actually rose, owing to expectations that a 75-basis-point interest-rate hike by the Federal Reserve would be more likely. That is because the dollar index will continue to rise, and the euro, which has barely recovered to 1:1, will continue to fall. And it has driven the nascent U.S. Treasury bond market back into a sell-off, which is also a bit of a disadvantage right now. Back in the money market, USDC's market underweight has been a pessimistic view of the market. Although there is no way to determine that this part of the money has entered the U.S. Treasury market through a conversion back into USD, USDC's return to USD is indeed real from the perspective of the dollar index. If U.S. Treasury purchases can be purchased directly from the Stablecoins, then the idle money in the currency market will be fully utilized first, and then the wear and tear of the Stablecoins to the U.S. dollar will be reduced. What is more important is that DeFi can be enriched, after all, with the development of the money market, stablecoins are not just anchoring US dollars, but even stabilizing US dollars exist in USDT, USDC, BUSD and DAI. Direct purchases of US Treasury securities are also likely to increase the market for legal tender exchange rates in various countries, possibly contributing to the development of a currency market without the continued decline in the market value of the mainstream stablecoins.
Of course, there's a lot of risk that needs to be perfected and avoided, and interested parties can talk about it, and back to the stablecoin market, up until 8:00 this morning, USDC's undervaluation is continuing to happen, so from the current situation, whether it's the economic playing field or the overall market in a malaise, the American view of the currency market is continuing to shrink, because cash is king.
\
The slightly different story is that the value of USDT, which has been dormant, has increased by about $100 million, bringing its total value back to $68 billion. This may be a sign that the major Europeans who use USDT are increasing their exposure to the currency market, given that it is clear from the data that there is a buying peak almost every day at 15 p.m. Beijing time. Alas, for BUSD, the second biggest seller, the market value has not budged.
The market value of DAI, as the spot leverage of ETH, has also increased slightly. Although DAI's performance does not accord with the change in ETH prices recently, its market value is not very volatile. Please wait and see. So by looking at the overall market value of the four major stablecoins as of 8:00 this morning, the Americans represented by USDC are still out of control, and the overall market value has again dropped by more than $270 million.
Judging from the pressure of the BTC and ETH's transfer to the stock exchange, although the price fluctuated greatly during the two days, judging from the data as of 8:00 a.m. this morning, the amount of pressure on both the BTC and the ETH has come down, representing even a slight change in the macro sentiment. But for more money holders, there is no desire to sell their chips; on the contrary, they are waiting for a bigger price change.
The opposite of selling pressure is the data of withdrawal from the exchange, so the data of selling pressure begins to reduce, but the data of withdrawal does not appear to reduce too much, all can cover all the selling pressure, especially the recent data of BTC is far more than the selling pressure, and ETH although the difference is not very large, but also can withdraw more chips from the exchange, and reduce the risk of falling plate as much as possible.
Switch to the exchange data can be clearly seen that BTC although still not to nearly three years the minimum stock exchange inventory, but close, which illustrates a large number of chips in the process of being withdrawn, more investors not only did not sell their chips, but also to buy more. ETH, though still in high stock and less purchasing sentiment than BTC, still shows more purchasing power than selling pressure.
From the perspective of the long-term holding of the BTC, although the long-term holding of the BTC began to progress slowly, it is still increasing. More chips are shifting from short-term holdings to long-term holdings, and most of these chips are losing money. This change also shows that more BTCs are starting a big cycle, and even don't care about the current macro sentiment, and won't be affected by the Fed's interest rate hike.
BTC and ETH's overall profit address both have a upward trend with the recent price changes, but BTC's profit address ratio is obviously higher than ETH's, which means that among all investors, the BTC's profit increase is still higher than ETH's. At present, the profit ratio of BTC has recovered to 60%, but the ETH's profit ratio at the same time is less than 55%, so the investment BTC's profit ratio is still higher than ETH's.
And from the emotional aspect, BTC and ETH also have a bearish situation, but the biggest difference is that BTC has been in a bullish trend all the time, so even if there are users who have a bullish view, but the overall is still bullish, ETH itself is just at the edge of bullish view, but has turned into a large degree of bearish view. Here needs to be reminded again and again that the current price is influenced by sentiment too seriously, excessive view of any aspect is dangerous. In summary, judging from the current macro sentiment, although the Federal Reserve has not obviously sided with the Democratic Party in the general election, the Biden administration, in order to seek votes as much as possible, even if it could accept the decline of risky markets, could not accept continued inflation, and even will use subsidies to force the market to lower prices. But this kind of behavior is indirect let-off, and on the contrary, it forms a conflict with the Federal Reserve in the actual sense. Even if the actual situation shows that although the president's another outcry boosted confidence in risk markets, the trend of oil prices seems not to be buying the idea that the oil merchants will wait for the "fall" to take effect, which will increase the US fiscal deficit, and also means that the influence of this US administration over OPEC+ has almost reached the freezing point. And the Nasdaq's trend shows that while it has reversed, it still cannot be taken lightly.
That means that BTC and ETH, which closely overlap with the Nasdaq, will not necessarily move smoothly, but will most likely remain volatile until the 13th, and the bigger game in CPI is already priced in for rent.
