Market Overview - Financial markets experienced volatility, starting strong but ending with uncertainty due to geopolitical tensions and regional bank issues [1] - The US dollar initially strengthened but softened after dovish signals from the Federal Reserve, while safe havens like the Japanese yen and Swiss franc saw inflows during market stress [2] Federal Reserve Insights - FED Chair Jerome Powell highlighted increased downside risks to employment and evidence of labor market cooling, despite delays in official data due to the government shutdown [3] - Powell maintained that long-term inflation expectations align with the 2% target and indicated the possibility of a quarter-point rate cut at the upcoming meeting [4] - He acknowledged that the Fed may halt quantitative tightening soon, with the balance sheet expected to remain larger than pre-pandemic levels due to higher demand for reserves [4] Currency Pairs Analysis - AUD/JPY has shown signs of bullish movement after finding support at previous levels, with a short-term target set around 102 [5][6] - The British pound has gained strength against most currencies, with a focus on its sustained range against SGD and potential breakout towards 1.76 [7][10] Economic Indicators - Canadian inflation has declined to approximately 3%, while UK inflation is expected to rise to 4%, influencing the strength of the pound and the Bank of England's rate decisions [11]

Core Insights - Bitcoin is showing signs of stabilization with a nearly 2% increase over 24 hours, reaching a high of $109,405, indicating a potential bottoming phase for the cryptocurrency [1] - The Federal Reserve's dovish pivot suggests an end to quantitative tightening and possible interest rate cuts, which could positively impact risk assets like Bitcoin [1][5] - The upcoming U.S.-China trade negotiations are critical for market sentiment, with a positive resolution likely to trigger a significant upward rally in Bitcoin [4] Market Conditions - The end of quantitative tightening is anticipated to ease financial conditions, potentially benefiting risk assets as liquidity withdrawal slows [2] - A softening of the U.S.-China trade war is expected, with key meetings aimed at reducing tensions, which could further influence market dynamics [2] Expert Opinions - Analysts believe that lower interest rates may push investors towards riskier assets, including cryptocurrencies, although caution is advised due to ongoing trade war risks [3] - The immediate future of Bitcoin and the broader crypto market is contingent on the upcoming inflation report, but U.S.-China trade negotiations are seen as having a more significant impact on market sentiment [3] Future Outlook - A quarter-point rate cut is anticipated in the Fed's next meeting on October 29, which could positively influence Bitcoin's price action, with effects likely to manifest in the first quarter of the following year [5] - The return of liquidity from the Fed's plans to end quantitative tightening is expected to create a more favorable environment for speculative assets like Bitcoin [4]

Market Overview - The stock market experienced gains on Wednesday, driven by better-than-expected earnings reports, which overshadowed concerns regarding escalating U.S.-China trade tensions [1] - President Trump's recent threats to China impacted the S&P 500's rally attempt, which had been supported by comments from Fed Chair Jerome Powell about potentially ending quantitative tightening [1] Portfolio Management - Discussion on the portfolio included the potential sale of Abbott Laboratories due to its recent underperformance and overlap with Danaher, which is showing signs of recovery [1] - There is a consideration to shift focus towards Johnson & Johnson, perceived as a better-managed company compared to Abbott and Danaher [1] - Salesforce's stock performance remains uncertain, with concerns about investor patience following a positive keynote from CEO Marc Benioff [1] - Starbucks is viewed as a key position with a promising turnaround story [1] - Costco is suggested as a potential buy due to its currently low valuation multiple [1] Company Analysis - BTIG initiated coverage of Nike with a price target of $100, designating it as a top pick for 2026, reflecting confidence in the company's turnaround under CEO Elliott Hill [1] - Nike's stock is considered potentially undervalued, with a price-to-earnings ratio that may not accurately reflect its future earnings potential, which are expected to rebound [1]

Group 1: Federal Reserve's Actions - The Federal Reserve may soon conclude its balance sheet reduction program, which has decreased the balance sheet from $9 trillion to $6.6 trillion since 2022, reducing holdings by $2.4 trillion [2][3] - Chairman Jerome Powell indicated that the Fed could reach a point to stop the balance sheet runoff in the coming months, contingent on monitoring liquidity conditions and short-term funding rates [3][2] Group 2: Cryptocurrency Market Dynamics - Bitcoin is trading lower at around $112,600, marking a weekly decline of over 7%, prompting traders to seek alternative cryptocurrencies (altcoins) [1] - The global crypto market cap is currently at $3.79 trillion, with the Fear and Greed Index in the "fear" zone at 37, and an average crypto RSI of 48.1 indicating the market is nearing oversold territory [5] Group 3: Altcoin Performance - Several altcoins are showing relative strength despite Bitcoin's weakness, with Solana rising 6.4% to around $207 and Dogecoin gaining over 4% [4] - Notable altcoins like ZORA and USELESS have gained about 20% in the past day, with USELESS reaching a new all-time high of $0.41 [6] - COAI, an AI-linked token, exhibited extreme volatility, recently jumping from $7.46 to $44 before correcting to around $15.96, indicating potential for altcoin outperformance [7] Group 4: Future Outlook - If the Fed confirms the end of quantitative tightening later this year, it could improve liquidity conditions, favoring altcoins such as SOL, XRP, and meme tokens like ZORA, COAI, and USELESS as potential investment opportunities for Q4 2025 [8]

Group 1: Dollar Performance - The dollar index (DXY00) fell by -0.24% as it reversed its overnight gains due to positive comments from ECB President Lagarde, which boosted the euro and negatively impacted the dollar [1] - The ongoing US government shutdown is bearish for the dollar, with potential economic repercussions if the shutdown persists [1] - Expectations for a rate cut by the Fed at the upcoming FOMC meeting on October 28-29 were reinforced by dovish comments from Fed Chair Powell, leading to accelerated losses in the dollar [1][4] Group 2: US-China Trade Tensions - The US-China trade conflict escalated with China sanctioning five US units of South Korean shipbuilder Hanwha Ocean Co., reflecting ongoing tit-for-tat actions between the two nations [4] - The imposition of special port fees on each other's vessels has significant implications for the global economy, as vessels account for over 80% of international trade [4] Group 3: Euro Performance - The euro (EUR/USD) rose by +0.30% after recovering from early losses, driven by positive remarks from ECB President Lagarde about the Eurozone economy [5] - The German October ZEW expectations of economic growth survey exceeded expectations, providing additional support for the euro [5] - Political uncertainty in France, particularly regarding a potential no-confidence vote for Prime Minister Lecornu, has created downward pressure on the euro [6]

Group 1 - The expectation is that bond yields, particularly the ten-year yield, may continue to decline due to attractive real yields in the bond markets and a decrease in inflation [1][2] - A formal announcement regarding a new inflation target could lead to further declines in bond yields, currency appreciation, and a reduction in the inflation rate [2][3] - There have been significant capital inflows into the South African bond markets, exceeding 409 billion rand in recent months, which is a crucial factor for the bond market's performance [4] Group 2 - The yield differential between the U.S. Treasury ten-year yield and the South African government bond yield is favorable for South Africa, contributing to the positive sentiment in the bond market [5] - The inflation differential between South Africa and the U.S. has narrowed, indicating a faster dis-inflation rate in South Africa, which is important for investors [5] - There is a renewed positive sentiment towards emerging markets, with South Africa being a notable player in this category [5] Group 3 - Central banks globally are increasing their gold holdings, with the price of gold recently spiking to a record $4,000, which may influence the South African Central Bank's strategy [6] - South Africa maintains significant gold reserves and has the capacity to extract more gold if necessary, indicating a strong position in terms of gold assets [7] - Concerns about rising debt levels are prevalent, but emerging market debt has not increased as significantly as that of advanced economies, suggesting a different risk profile [8][9]

Core Viewpoint - Pressure on long-dated bonds is easing globally as investors respond to supply changes and seek bargains following a recent selloff [1] Group 1: Yield Changes - Yields on 30-year US bonds have decreased by approximately 25 basis points since early September, while UK gilts have dropped by 20 basis points and Japanese bonds have fallen nearly 15 basis points [2] - This decline in yields has reversed a significant selloff that previously pushed Japan's long-dated yields to an all-time high and UK gilts to their highest level since 1998 [2] Group 2: Supply Changes - The easing pressure on long-dated bonds is partly attributed to a reduction in long-end supply, with Japan's finance ministry proposing to cut issuance of long-dated debt in upcoming auctions [3] - The Bank of England is also reducing the share of long-end bond sales in its quantitative tightening program starting next month, and Australia's debt manager has indicated it may consider reducing ultra-long bond issuance [3] Group 3: Market Sentiment - The shift in supply dynamics is prompting a reevaluation among investors, with TS Lombard strategists noting that supply "fixes" are creating buying opportunities in the UK and Japan [5] - The change in sentiment regarding long-end bonds has also influenced the US market, leading strategists at Citigroup and Bank of America to withdraw recommendations that longer-term Treasuries would underperform [5] Group 4: Economic Outlook - The recent optimism about long bonds highlights how supply concerns were a significant factor in the previous selloff, despite broader fears of increasing fiscal deficits [6] - An economist from TS Lombard suggests that the rise in 30-year yields globally is not indicative of an "imminent fiscal apocalypse," but rather a result of declining demand from pension funds and insurers, along with central bank quantitative tightening [7] Group 5: Federal Reserve Influence - In the US bond market, concerns regarding the independence of the Federal Reserve contributed to pushing 30-year yields close to 5% earlier in the month [8] - However, a recent near-unanimous policy decision by the Fed has alleviated these concerns, leading Citi's rates strategists to recommend clients take profits on bets that 30-year interest-rate forwards will underperform compared to five-year tenors [8]

Economic Reports and Central Bank Decisions - Several economic reports from China, inflation data from Japan, the UK, and Israel, Swiss export figures, and a credit ratings review of Italy are expected to be highlights in the upcoming week [1] - Central banks in major economies, including Indonesia, Brazil, and South Africa, are anticipated to maintain a watchful stance without changing rates [1][2] US and Canada - The Federal Open Market Committee (FOMC) is expected to cut rates by 25 basis points, influenced by market expectations and political pressures rather than economic data [3][4] - Retail sales in the US are forecasted to rise by 0.3% in August, following larger gains in previous months [6] - The Bank of Canada is likely to cut its benchmark overnight rate to 2.5% amid dismal jobs data and economic contraction [8] Asia - China will release a range of economic data, including retail sales and industrial output, to assess the impact of targeted support on demand [10] - The Bank of Japan is expected to leave rates unchanged, with attention on potential future hikes as inflation remains high [13] Europe, Middle East, and Africa - UK inflation data is expected to remain at 3.8%, with the Bank of England likely to keep its key rate on hold at 4% [14] - The European Central Bank will host a conference with potential comments from policymakers following recent rate decisions [16] - Credit assessments for key euro-area borrowers, including Italy and Greece, are scheduled, with Swiss export numbers gaining significance amid trade negotiations [17] Latin America - Brazil's GDP-proxy data is expected to show a decline in economic activity as it heads into the second half of 2025 [19] - Angola and Ghana are anticipated to cut their key rates to support their economies as inflation cools [19] - In Argentina, economic forecasts are being revised downward following poor electoral results, with key economic data releases expected [22]

Market Analysis - Bitcoin price rallied from $15 thousand to $124 thousand despite the harshest Fed quantitative tightening in its history [1] - The market anticipates a significant impact on Bitcoin's price once quantitative easing begins [1]

Market Cycles & Historical Analysis - The analysis suggests that Bitcoin's four-year cycles are likely to continue, despite potential disturbances [1] - Bitcoin's history shows recurring patterns: a halving event, followed by an all-time high, then a dip and reset [2][3] - Past bull markets were driven by different factors: early adopters in 2013, retail investors in 2017, and institutions in 2021 [7][8][12][21] - Each cycle faced hurdles like exchange collapses (Mount Gox), ICO bubble bursts, and regulatory crackdowns [9][10][15][16] - The analysis highlights that human nature and market exuberance contribute to the cyclical pattern [17][19][20][55] Current Market & Future Risks - The current bull market (2025) is driven by favorable US regulations, potential Fed rate cuts, and the approval of spot Bitcoin and ETH ETFs [29][30][31] - Institutions hold over 10% of Bitcoin, potentially buffering volatility [32][33][34] - Risks include short-term pullbacks, profit-taking by institutions, and potential unwinding of leverage in the system [35][36][39] - The analysis suggests that the market is still macro-dependent, and any delays in Fed rate cuts or a flare-up in inflation could cause a violent retracement [42][43] Quantitative Easing (QE) & Tightening (QT) - Quantitative easing involves central banks buying assets, adding money, increasing the money supply, and lowering interest rates to stimulate growth [44][45] - Quantitative tightening involves central banks selling assets or letting them expire, decreasing the money supply, pushing rates up, and slowing growth to curb inflation [45][46] - Historical data shows that Bitcoin can hit all-time highs even as the Fed funds rate goes up [48]