Yesterday was a day off for all markets

This Daily Digest will cover:

• 📊 Yesterday was a day off for all markets!
• 🪙 Crypto holds on to its gains
• 🇯🇵 Focus on Bank of Japan tonight

Yesterday was a day to forget as tight ranges held everywhere with the States honouring Martin Luther King Day.

Today has started with a hangover and movement is minimal across asset classes. To be frank, there is little on the horizon to change this until the Bank of Japan meeting this evening where the market is bracing for a change in policy again as the end of yield curve control beckons. This move, whilst a yen story, will have broader implications for the USD elsewhere and risk assets so should be monitored closely. To put it into perspective the implied volatility is above 50 for overnight USD/JPY which I have rarely, if ever, seen before.

Gun to my head I think the risk is skewed that they under deliver tonight and the yen suffers a sharp setback in its recent rally. This could see Euro and GBP longs squeezed and even the recent crypto rally abate giving us a chance to buy the dips. We have squared most of our yen cross short positions and just retain our core Crypto longs for the moment.

I continue to be impressed by the bid tone across the board in Crypto. BTC especially is giving back none of its gains as it battles to break 21400/500. The reaction to a break will be key as detailed in yesterday’s report. Dips to 20,200 and 1470 in BTC and ETH should be treated as the ideal entry points tonight should we get a sell off.

Good luck as always!