Weekly Market Update: Week of October 24: New Rate Cuts Incoming?

Market Overview - Expectations for further monetary easing are strengthening, with anticipated cuts of 25 basis points in October and an additional 50 basis points in December [1] - The latest CPI print of 0.3% month-on-month is below the 0.4% consensus, indicating modest inflationary effects from tariffs [1] Political Stalemate - The U.S. government shutdown has frozen most macroeconomic data releases, increasing reliance on the single inflation reading [2] - The Senate failed to pass a continuing resolution to fund the government, with a vote tally of 50 in favor, 43 against, and seven abstentions [3] - The ongoing stalemate is causing disruptions across federal operations, raising concerns about future employment data [4] Digital Assets - Digital assets, particularly Bitcoin, are showing resilience amid political and macroeconomic uncertainty, with Bitcoin rising since the October 17th low near US$104K [5] - Fund flows indicate selective but engaged investor behavior, with Bitcoin favored as a relative safe haven while Ethereum exposure is being trimmed [5] - Digital asset ETPs saw net inflows of +US$573 million this week, with Bitcoin products gaining +US$528 million and Ethereum products losing –US$100 million [8] Market Sentiment - The combination of anticipated rate cuts and fiscal paralysis is reshaping market expectations and asset allocation [6] - Data scarcity is amplifying noise around inflation releases, potentially benefiting digital assets as demand for non-traditional hedges grows [6] - Early signs of stabilization in Bitcoin flows and leveraged positioning suggest a potential turning point in post-liquidation sentiment across the crypto landscape [6]