Bitcoin has rebounded to around $92,000 after last week’s $2 billion liquidation event, but traders are adopting cautious positioning amid high volatility and looming central bank decisions. According to market maker Wintermute, market activity has narrowed sharply into Bitcoin and Ethereum, with investors favoring delta-neutral and carry strategies over directional altcoin exposure while awaiting clarity from the Federal Reserve and macro indicators. The consolidation follows two months of macro uncerta ...

Summary of Asia Credit Trader Conference Call Industry Overview - The report focuses on the Asia credit market, particularly the high-yield (HY) and investment-grade (IG) sectors, amidst evolving macroeconomic conditions and trade tariff developments [2][7][11]. Key Points and Arguments 1. **Market Performance**: Risk assets started the week strongly, recovering from earlier spread widening in April. Asia HY outperformed, but the rally lost momentum as valuations approached this year's tight levels [2][7]. 2. **Tariff Outlook**: The outlook for tariffs has improved, with expectations that direct impacts on Asia credit will be limited. However, sectoral tariffs could significantly affect specific companies and industries [5][11]. 3. **US Economic Indicators**: The US labor market is a critical indicator for recession risks. The probability of a US recession is currently estimated at 35%, down from 45% previously, indicating a somewhat firmer growth outlook [3][11]. 4. **China's Economic Policy**: China is not expected to rush into easing monetary policy. The focus remains on the global macro backdrop rather than domestic policy changes [6][15]. 5. **Investment Strategy**: A market-neutral stance focusing on carry is recommended, as yields on Asia credit remain attractive. Preference is given to short-dated BBB, 7-10 year A, and BB corporates [6][9][10]. 6. **Credit Spread Forecasts**: The Global Credit Strategy team has revised USD and EUR credit spread forecasts tighter, indicating a shift towards carry-driven excess returns. Default forecasts for the US HY market have been lowered to 3% [8][12]. 7. **Sector Preferences**: For Asia IG, there is a preference for front-end BBB and 7-10 year A securities, particularly in China and India. In Asia HY, BB-rated corporates are favored, especially in India and Indonesia [9][10][25]. Additional Important Insights - **Technical Support**: Despite the lack of clear catalysts for a large selloff, technical factors are expected to maintain solid demand for Asia credit [11][15]. - **Hedging Strategies**: Recommendations include using Indonesia 5-year Sovereign CDS and a long/short strategy on Japan corporate CDS for hedging purposes [6][16]. - **Market Sentiment**: The sentiment remains cautious, with market participants likely to adopt a wait-and-see approach due to elevated US recession risks and the potential for further tariff developments [11][15]. Conclusion The Asia credit market is navigating a complex landscape influenced by macroeconomic indicators, trade tariffs, and sector-specific dynamics. A focus on carry and strategic positioning in credit securities is advised to capitalize on the current yield environment while managing risks associated with potential economic downturns.