1 Minute Market Rundown – 4th April 2022
Russia – Ukraine
ETH and SOL outperforming
Fed mind in focus
S&P tops out
March proved to be another strong month for employment data with the headline number inline and unemployment ticking lower. The tight labour market has reaffirmed the hawks’ calls for a 50bps hike in May by the FED. Of the remaining 6 meetings for the year, it is now expected that there will be eight 25bps hikes. The data for us, just added weight to the argument that the USD will continue to outperform for now. The rates market continues its move unabated with the 2 year yield trading above the 30 year yield for the first time since 2007, joining inversions on other parts of the curve.
In crypto markets we are seeing a bit of consolidation as BTC tops out but ETH and SOL continue to outperform. BTC has stopped exactly where it should have last week and it does have some tough levels to break through. First up will be the 200 DMA at around $48400 and then the psychological level of $50,000. Whilst BTC has seen some selling, ETH has bounced back very well breaking $3500. Alts such as SOL and AAVE have had a good few days rallying over 9% and 20% respectively. The latter continuing to benefit from its platform v3 upgrade earlier this month.
Whilst there seems to be a bit more renewed interest by participants to put some risk on in the crypto space, we are keeping one eye on equities. Ultimately if equities do come under severe pressure, we do believe crypto will struggle to rally. The correlation between stocks and crypto continues to strengthen.
Despite news that Chinese regulators removed a key hurdle that impeded full US access to audits of Chinese companies listed on Wall Street, stocks have come under a little bit of pressure first thing this morning. With reports of atrocities we do not wish to explicitly type out surfacing, traders are weighing the prospect of stiffer sanctions on Russia. Inversions of parts of the yield curve and with manufacturing data slowing down, equities are running out of steam a little.
We are still happy to be long ETH/JPY. With a war going on and inflation where it is at, nothing will be a straight line move and we will use dips to add to the position.
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