Trading Weekly: 28th October 2024

Welcome to the third edition of Zodia Markets Trading Weekly Newsletter.

Each week, we will provide a concise overview of key global economic events, market data and significant developments in traditional finance and digital assets set to shape the week ahead.

Summary

• BTC trades to $71k - continuing to strengthen its foothold on solid inflows into ETFs and crypto funds.
• Price action will be closely scrutinised inside the $70k-$73k channel – especially in the face of roiling geopolitical tensions and speculation of US officials probing USDT for sanctions violations and money laundering (hotly denied by Tether). ?
• Options bets for $80k by the end of November are rife as excitement builds around Trump’s, “…plan to ensure that the United States will be the crypto capital of the planet…” and plans for pro-crypto advisors like Musk.

Crypto:

• BTC made a rapid assault of $70k, buoyed by a combination of ETF inflows ($997.6mio last week), $901mio digital asset inflows into crypto funds (c. $3.4bio for Oct) and bets that a Trump victory will propel BTC to $75-$80k initially and then into $100k by 1Q25.
• The risk to this trajectory is a Harris / Walz administration and lack of focus, which risks a BTC move back towards $55k while the market is in a holding pattern for pro-crypto plans to materialise. Tokenisation and fractional ownership of high value real world assets takes column inches.

Backdrop:

• This week is all Big Tech earnings, a peek at preliminary US 3QGDP, key US PCE inflation and monthly US jobs data.? It’s quite a preamble to next week’s US Election (5th Nov) and China’s 04-08 Nov meetings where the market will be looking for fiscal safety nets.

On the radar:

• This week we see 5 of the Mag-7 (Alphabet, Amazon, Apple, Meta and Microsoft) reporting as US earnings season peaks (over 30% of S&P 500 due to report).
• Oil plunged c. 5% to $67.5 as Israeli strikes avoided energy and nuclear infrastructure. Yen drops as Japan’s LDP alliance lost its majority for the first time since 2009.
• US FI sold off / yields rise c. 5bp as $183bio in supply hits Mon & Tue. Investment grade corporate supply is estimated at $20bio. Euro advance Q3 GDP plus prelim Oct CPI => impact on ECB Dec meeting.
• UK landmark budget expected with ￡40bio to be generated by tax rises and cuts to spending.
• BoJ policy decision (extremely important due to Japanese lending to eurodollar markets).
• Chinese PMI numbers - official and private.
• China has restricted exports of minerals (they have 60% of world supply, and 90% are processed in China) used in everything from batteries to computer chips. e.g. antimony: a material used in semiconductors, military explosives and other weaponry.

Key releases:

Friday 1st Nov

US nonfarm payrolls, unemployment rate, average hourly earnings, manuf PMI, ISM Manu and construction spending

Disclaimer

Zodia Markets (UK) Limited (No. 13360649) is registered with the United Kingdom Financial Conduct Authority (Firm Reference 954558) under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 in respect of its activities in cryptoassets only. Registered address: 1 Basinghall Avenue, London, EC2V 5DD.

Zodia Markets (UK) Limited is also a Money Services Business registered with FinCEN in the United States, MSB Registration Number 31000244063837.

Zodia Markets (Ireland) Limited (No. 698195) is registered and supervised by the Central Bank of Ireland for Anti-Money Laundering and Countering the Financing of Terrorism purposes only (Firm Reference C453607) under the Criminal Justice Act 2010 to 2021. Registered address: 36 Dame St, Temple Bar, Dublin, Ireland, D02 EF64.

Zodia Markets (Jersey) Limited (No. 125434) is registered in Jersey and supervised by the Jersey Financial Services Commission as a Virtual Asset Services Provider and for the conduct of Investment Business (Class A), Firm Reference IB7800. Registered address: No 1 Grenville Street, St Helier JE2 4UF.

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