1 Minute Market Rundown – 28th September 2022
IMF Latest to Take the UK to Task
Global Yields Soar
Crypto Lift Off Delayed – Again
If this job was easy, where would the fun be? Yesterday’s risk positive tone lasted about as long as the Truss feel good factor. Global interest rate expectations are growing at a frankly scary/ludicrous/dangerous (delete as appropriate) pace and it continues to shake markets. Markets are pricing in a 6.25% base rate for the UK by May next year, the US 10 year yield is above 4% and the ECB continues to ratchet up their rate hike narrative, albeit in their usual befuddled manner.
On top of this markets reacted to the coincidental leaks that have sprung up on the Nordstream pipeline. Put this all together and you have stock markets getting slammed again, a roaring USD and a crypto rally that got snuffed out again before it really got started.
Honestly, It is hard to commit to a view at these levels. I struggle to recommend adding to long USD positions at these levels as I believe valuations are getting stretched. Conversely I can’t really recommend fighting the moves just yet as we are approaching month end and flows should indicate more USD buying for portfolio rebalancing.
The IMF is the latest economic group to come out and condemn the UK’s new economic measures, calling for a reversal or they will create inequality and inflation. I am a little surprised the pound has not plunged further yet, and it feels like a when not if. The USD may not be the best vehicle to express this trade and against the CHF, EUR and YEN are our preferred choices.
I wrote at the end of August that September is seasonally the worst month of the year for stocks and so it has played out. So let’s take some positives and point out that October has been the most positive month for BTC since its inception. Yesterday’s reversal hurt, but I remain a buyer on dips on a medium term basis and with risk markets in general pricing in all the doom and gloom I remain cautiously optimistic that the next significant move is higher.
As always, good luck out there!
Richard Usher – Head of OTC Trading
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 recognized self-regulatory organization (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.