The last day in September is over. The key issue for the October release is the CPI released on the 13th. This data is not only about the October risk market trend, but also about whether the risk market can bottom in 2022. If the CPI data continues to burst higher than expected, and the core CPI is still rising, then 75 basis points will not escape. For an interest rate increase of 100 basis points, unless the CPI does not drop, it will increase. It is not likely, and the 75 basis point move is not a sign that the Fed is lowering interest rates. Judging from the frequent speeches by Fed officials in recent days, there are some who believe that interest rates have already been raised too far, and some who believe that they should have been raised more quickly. This suggests that there is no consensus within the Fed that the decision will be based more on what happens to CPI and PCE now.
Based on current indications, the September CPI data may not be too good looking. Both oil prices started to recover, basically erasing last week's decline. Based on current oil prices, oil prices are probably down about $6 from the average price of the previous month, down from $10 last month. To understand that the decline in CPI in the last two months was mainly driven down by oil, it now depends on whether other factors are falling. There are clear data that show that the prices of new homes, which are the largest proportion of CPI to core CPI, are in a continuous downward trend, but this decline is still very difficult to slow the inflation from the month to month. In addition, the price decline of new homes has not yet transmitted to the rental market. I even asked a few small partners who live in rental housing in the United States, all of whom said that they did not feel the decline in rents, according to the data released by Zumper.
The median rent in the United States is still on a rising trend, but it is beginning to fall in a number of cities, and it is expected that Christmas will be around the corner if we are to make all the reductions. The decline in new-home purchases, while keeping prices from rising, will force prospective buyers to continue renting, and the decline in new-home sales is not a reduction in demand, but a rise in costs. That is the main reason it is difficult to transmit to the rental market. The average rent for one studio in the United States now exceeds $1,500, while the rent for two bedrooms exceeds $1,845, which is the highest price in history, and the price of one bedroom is trending down, but the price of two bedrooms is increasing, as can be seen from the September chart. While recession fears of falling rents are certain, they are not necessarily short-term. It's not just that CPI expectations have led to a chill in the market. Even the Nasdaq's head company was in the red. Apple's stock dropped 6% in the early hours of this morning, while Meta's is down nearly 4.5%. Zuckerberg has announced a hiring freeze, is interested in restructuring the company, and even has said that third-quarter results will not look good because macroeconomic tensions are driving budget cuts.
Although the dollar index began to decline following the violent intervention of the UK, it is still too early to say that the DXY has peaked. At the very least, the Fed's strong rate hike in November will probably cause the dollar to appreciate again, and if the October CPI reading is not satisfactory, there is no guarantee that the Fed will not raise its terminal rate to 4.75% at the end of 2022, implying two 75 basis points, so exchange rates should stop earning their last penny. There were a lot of little buddies who asked me how I did it, and quite simply, yesterday I'd said it in great detail, that before the euro zone rate hike the dollar was changed into euros, and before the Fed hike the euro was basically going to be a quarter to the dollar, and yesterday morning my little buddies who listened to me were now getting free pig's feet, and there were quite a few places where the dollar was changed into euros, whether it was on the exchange or on Curve, so that goes without further ado.
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But be cautious if the dollar continues to fall. And those of you who can look at the exchange rate of the renminbi against the euro will be surprised. In addition, as the US dollar index has dropped, there has been a rush to buy Treasury bonds. Yesterday, there was a buying trend for mid- and long-term Treasury bonds. Early this morning, all short-term Treasury bonds began to buy in large quantities. The liquidity of Treasury bonds can finally be eased for a while. But even so, the Fed's reverse repos still reached a record $2,372bn for the second day running, taking in 103 counterparties in the early hours of this morning. That suggests that there is still plenty of outside money sloshing around, neither into Treasuries nor risk markets, carrying the central bank's wool every day from overnight interest rates. I wonder if the Fed will get jerked off the skin. The Fed, in particular, had a good teammate, with Florida's hurricane damage causing price booms, and Biden's solution was to get Congress to approve additional relief payments. The Fed tightens and Mr. Biden splits. After all, the mid-term election is more important. If Biden can't buy the hearts of the people without the support of the US Federal Reserve, the Democrats will have a hard time handling it this time. But the costs will be well known. The Nasdaq fell to a fresh two-month low yesterday in price terms. However, the BTC and the ETH have performed very well. In the last two days, they have followed the trend rather than followed the trend. Although it is difficult to get 100% accurate information, the fact that the U.S. dollar institutions are leaving the market and European funds are buying more and more money from the USDC cannot be excluded from the reason for the slowdown in the currency market. In addition, due to the low market value of the currency, no liquidation is needed.
As of 8:00 this morning, the market value of USDT, the main trading force, has remained flat and has not changed at all, while BUSD, which has experienced a sharp increase in market value in the last two days, has also moved horizontally and has not changed at all. Neither of the two main stablecoins has increased in value, indicating that there has been no interest in entering the market for the last 24 hours.
The once-stellar USDC was ruthlessly abandoned at the same time today, with some $330 million remaining to be removed from the USDC, and USDC's market value has dropped below $49 billion, putting USDC's estimated market value well below $40 billion before US inflation ends. DAI, which represents the ETH's physical leverage, also lost $20 million in market value, suggesting that some ETH holders are not bullish about the aftermarket.
So, in terms of the overall stablecoin trend, money is still in flight, and of course this part of the flight is still, statistically speaking, more under the control of the US population, though intellectually it is hardly the bottom of the risk market at the moment, and small-to-medium-size purchases of short-term Treasuries should be good relative to the wait-and-see and big-money rolling off the wool, especially as real returns from one to two years of Treasuries have swollen into whole numbers.
Although the market value of the main stablecoin is declining, the main trading force, USDT, has not retreated. From the transaction to 8 a.m. to the volume of funds, purchasing power has again increased, especially from the detail data can be found that it is still in Europe's main trading time zone that a large amount of funds have moved in. Europeans are not relaxed about the currency market in the face of exchange rate depreciation and the recession. Many of the smaller partners should thank the Europeans, whose continued buying may also have contributed to the gradual break between the currency and the NASDAQ.
From the overall selling pressure on BTC and ETH, we can see that although the Nasdaq recorded a new low, the selling pressure on BTC and ETH both decreased compared to the previous day, indicating that relatively stable prices will not stimulate the departure of currency holders. However, as September ends, more chips will be left voluntarily on the exchanges before the release of CPI data, especially after the release of today's PCE data.
And the transfer out of the exchange can find that although selling pressure is decreasing, with the price of small fluctuations, both BTC and ETH withdrawals also showed a small drop compared with the previous day. Especially BTC, the withdrawals can not cover selling pressure, resulting in more chips stuck on the exchange, and ETH is still significantly ahead of selling pressure in terms of cash withdrawals, reducing inventory.
As can be seen clearly in the stock movement of the exchange, the BTC which has increased the stock in the recent period has continued to show signs of increasing its holding. Although the price of the BTC is relatively firm, the chips have been accumulating which is attributed to the lack of purchasing power and purchasing sentiment. The higher inventory of ETH will bring greater risk, and the continuously decreasing inventory is the best way to reduce the risk. It also shows that the current buying sentiment of ETH is relatively strong.
In particular, the increasing number of ETHs pledged for mining at POS shows that there are still a lot of investors who are in lock-up mode without knowing the redemption time. After all, a 4% return on the money standard plus a block bonus is still very attractive for holders who do not want to leave. By 8:00 this morning, the ETH in the lock had increased by more than 30,000 units and the average revenue had decreased by 0.003%.
From 10 pm last night to 10 am this morning, the price distribution of BTC positions shows that there was a large fluctuation from last week in the amount of profitable chips with positions of more than half a year to high-value hedged BTCs, with total sales of more than 1,300 BTCs, while total loss chips with positions of more than a month and above USD 25,000 reduced their holdings by more than 5,000, with average sales of more than 416 units per hour. And the $19,000 pile is about to pass its peak.
However, the long-term holders of BTC saw their chips continue to rise substantially, having not moved for more than 155 days. Thus, it can be inferred that although long-held chips fluctuated relatively high, they tended to be too few compared to those that were reluctant to engage in turnover. More BTCs are choosing long-term holdings, so they have no interest in current macro sentiment or even price volatility.
Although the price doesn't change too much, the mood of BTC and ETH is different again. BTC should continue to go on the bullish path, benefiting from the firm price. ETH, whose price doesn't fluctuate too much, is betting on the bearish mood even though it goes through a game of too much short.
All in all, Nasdaq and Nasdaq futures hit their lowest levels in the last two months yesterday. However, the relatively strong BTC and ETH prices seem not to have been affected by the Nasdaq. It remains to be seen whether the Nasdaq is completely decoupled from the BTC. However, on the trend line, there is still a certain degree of correlation, although the BTC and ETH fluctuate much less. Also, the August PCE data will be released tonight, which is not expected to be very pretty .
