Market
The overall picture of the market is still sideways. On May 14th, during Asian time, there was a lot of selling on the Coinbase exchange, around 3000-4000 BTC. CBP is closer to -$100. There are no special issues, so I’m not sure what this BTC sale means… So far, it appears to be being well absorbed by buyers. (This is not a situation you see often)
I think the most important levels are $61,000 – $65,000 – $67,000 and these are the points where the trend may reverse.
This week, PPI/CPI/Retail Sales, important macro data that can affect the market, will be announced. This data can invalidate any prediction. There are currently concerns about stagflation in the market. Additionally, the inflation expectations announced last Friday exceeded market expectations, rekindling fears of inflation. BTC also reacted sensitively to the data, causing an immediate price reversal from up to down.
Today I would like to mainly talk about my thoughts on CPI. (I do not have a CFA qualification and am not an expert on macros, so please forgive me if there are any mistakes)
CPI (Disinflaion vs Reinflation)
- PPI/Powell Speaker – 5/14
- CPI/Retail Sales – 5/15
Due to the strong disinflation trend that has continued since last year, CPI data has become less important in the market, but it has recently begun to rise again, attracting the market’s attention. That said, people’s attention has clearly shifted to inflation.
I expect the CPI to be released on the 15th to be slightly cooler and good for the market. Currently, Wall Street’s median CPI estimate is 3.4% (YoY). The Cleveland Fed’s CPI forecast is 3.56%, higher than the previous month.
Shelter accounts for the largest proportion of CPI. The data shows a slight increase starting from Q3 2023, but still maintaining a disinflation trend. Shelter is currently controversial among analysts… I think shelter data will continue to remain low going forward.
Manheim used car prices fell both MoM and YoY…
Regarding wage growth… It keeps getting lower…
Oil is also a factor that can greatly affect CPI. Although the possibility of a rebound exists, all April fears have dissipated and Oil is down 10%. Reinflation is not in sight at the moment… (Not all data is immediately reflected in CPI)
Morgan Stanley : “We forecast core CPI inflation fell to 0.29%M in April (0.3%M cons, 3.6%Y annual rate). Core goods remain in negative territory, and services come in lower with softer car insurance inflation.”
PPI will be announced one day before the CPI data is released! Considering their correlation, most movements may be completed on the day of the PPI announcement. No one can predict with 100% accuracy what the outcome will be. What is clear is that growth remains robust. If the CPI cools this time, I think stagflation concerns will decrease significantly compared to before. I expect BTC to end its 60-day sidetrend and start a new trend if this week’s macro data (PPI, CPI, Retail Sales) has a positive impact on the market. Hot Summer.
(If the CPI is hotter than expected… it’s time to touch the grass)
VIX/VVIX
One thing that is concerning is that many people appear to be positive about the CPI. It appears that position hedging against PPI/CPI is not sufficiently done. During bull markets, it is common for volatility to be lower. Just because the VIX is low doesn’t mean you have to sell stocks unconditionally… But if the CPI is negative…
13F
The number of institutional BTC holders reported via 13F continues to surprise. Bracebridge Capital reports holding $262M in the ARKB ETF, or 61% of its total portfolio. Most institutions’ holdings in the BTC ETF may be small, but compared to other ETFs launched in the same period… The BTC ETF has been an overwhelming success.
Source : Eric Balchunas
ETF Market
As with the options market, the ETF market is also generally quiet. The HK ETF shows an overall outflow trend after the first day, but this feels normal considering the overall quiet market. The US ETF continues to see GBTC outflows and remains quiet with no significant trends.
It seems like the market is waiting for a new trend to start.
China
CHINESE OFFICIALS TO SELL $140 BILLION OF LONG-TERM BONDS – FT
These are Chinese government bonds, not US government bonds… China is on the move!
Metaplanet
Japanese listed company Metaplanet has adopted BTC as a strategic reserve asset. Japan has the highest national debt-to-GDP ratio and the yen continues to fall. I expect to see this movement in many places in the future.
Have a good weekend!
NFA DYOR 🙂
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