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]