Central banks take centre stage

Today we’ll cover:

• Central banks take centre stage
• Crypto underlyingly bid with BTC the mainstay
• USD firm as yields hold lofty levels

Firstly thanks to everyone with whom I had meetings or spoke to at events and at the BCB Group stand at Token2049 in Singapore. It was an amazing event and the buzz around the industry remains real and intense.

Central Banks take centre stage for the rest of the week starting with the FOMC tonight and followed tomorrow by the SNB, BOE, Norges, Riksbank and the BOJ. What is intriguing is the divergence in policy which is now coming through. The ECB hiked unexpectedly last week but indicated they are likely done. The FOMC is expected to do nothing but indicate maybe more. The BOE was nailed on to hike today until inflation missed expectations this morning so anything is now possible. The BOJ, well who knows!

This all indicates one thing, volatility. I have a leaning to fade this USD strength as my base case is a weakening dollar into year end as stocks rally but I am far from married to the view and will watch Powell closely tonight.

Crypto has bounced really well recently from the sell off early last week. BTC has led the charge and been the main concentration of demand we have seen our end. Whispers of ETF approval as soon as next month are giving a reason to focus on fresh positivity and banishing worries over FTX liquidations. Sadly, the fact the rally is fairly BTC centric, combined with the plethora of moving averages and resistance levels between 27,500 and 28,500, leave me feeling a little cold towards the timing and sustainability of the rally broadly speaking. Chart of the day below is BTC/USD.

Short into 28,000 with a stop above 29,000 or buying the dip to 25,000 remain the games in town…

Good luck as always

Rich

Richard Usher
Head of OTC Trading