1 Minute Market Rundown – 24th March 2022
Russia – Ukraine
Yields in focus
Crypto consolidates
Rates markets continue to dominate proceedings with yields continuing to push higher but risk is holding in rather well. Looking across equities and crypto it feels like the dips are getting shallower and we are putting in higher lows.
We have been saying crypto has been quietly bid and that continues to be the way. It is the alts and not the majors that are currently outperforming though. Cardano has posted a c.19% rally over the past 24 hours, on the back of a massive uptick in projects being developed on its blockchain. Also worth noting that ADA has the highest allocation in Grayscale’s new ‘Smart Contract Platform Ex-Ethereum Fund.’ The majors are also grinding higher albeit still contained within their recent ranges. Resistance is well defined at $45k-$47k and $3400 in BTC and ETH respectively.
We as a desk have moved to a more bullish stance and believe things now look more constructive. The move in rates is something we are keeping an eye on though. The yield curve continues to flatten and if it were to invert that would be less than ideal. We of course believe that the Fed will do everything to avoid a recession and they may be hoping to reenact their 1994 actions where they doubled the Fed funds rate from 3% to 6% and avoided causing a recession as well as the curve inverting. With a lot of hawkishness now priced in, we are inclined to be long of risk as we think the FED does indeed avoid the recession outcome and money that has been sat on the sidelines now gets put to use.
Our favoured play currently is exclusively in crypto. We see more value in putting capital to use in crypto than FX. We would look to add to our crypto positions on a break of the resistance levels in BTC and ETH as mentioned above as well as $100 in SOL. FX seems to be caught between the USD going up against low yielders like the JPY, EUR and GBP and it being sold against commodity currencies like NZD and AUD. Gun to our head, we would still favour being short EUR/USD and GBP/USD but just think there is better value elsewhere currently.
For more information and industry insights, visit www.bcbgroup.com
Disclaimer
BCB Group comprises BCB Prime Services Ltd (UK), BCB Payments Ltd (UK), BCB Digital Ltd (UK) and BCB Prime Services (Switzerland) LLC. BCB Payments Ltd is regulated by the Financial Conduct Authority, no. 807377, under the Payment Services Regulations 2017 as an Authorised Payment Institution. BCB Prime Services (Switzerland) LLC, a company incorporated under the laws of the Swiss Confederation in the canton of Neuchâtel with business identification number CHE-415.135.958, is an SRO member of VQF, an officially recognised self-regulatory organisation (SRO) according to the Swiss Anti-Money Laundering Act.
This update: 14 Oct 2020
The information contained in this document should not be relied upon by investors or any other persons to make financial decisions. It is gathered from various sources and should not be construed as guidance. The information contained herein is for informational purposes only and should not be construed as an offer, solicitation of an offer, or an inducement to buy or sell digital assets or any equivalents or any security or investment product of any kind either generally or in any jurisdiction where the offer or sale is not permitted. The views expressed in this document about the markets, market participants and/or digital assets accurately reflect the views of BCB Group. While opinions stated are honestly held, they are not guarantees, should not be relied on and are subject to change. The information or opinions provided should not be taken as specific advice on the merits of any investment decision. This document may contain statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, new legislation and regulatory actions, competitive and general economic factors and conditions and the occurrence of unexpected events. Past performance of the digital asset markets or markets in their derivative instruments is not a viable indication of future performance with actual results possibly differing materially from those stated herein. We will not be responsible for any losses incurred by a client as a result of decisions made based on any information provided.