BTC buying continues…

Thoughts of the Day

The week before Bitcoin experienced a significant correction from nearly $74,000 to below $61,000 because of weakened investor sentiment and total outflows of $880million from US BTC ETFs. However, last week saw inflows of $860 million with just 4 trading days. The buying is likely to continue as more retail and institutional investors become more familiar with BTC as an investment option. New highs are inevitable in the weeks ahead.

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Week Ahead

Monday:

Tuesday: The RBA meeting minutes will likely explain why it kept its interest rates at 4.35% in its latest meeting and what needs to occur for it to start cutting interest rates.

The US JOLTS Job Openings is expected to show a decline of jobs openings from 8.863 million to 8.79 million in Feb.

Wednesday: The Euro Area inflation rate is expected to show that prices rose +2.6% Year-on-Year in March as it did in February. The core rate is expected to decline slightly to +3% on an annual basis from +3.1%. The unemployment rate is expected to remain at 6.4% in Feb as it did in Jan.

The US ADP Employment Change is expected to show that +130k jobs were added to the economy in March, down from +140k in February.

Thursday: The ECB Monetary Policy Meeting Accounts will be released.

Friday: The US Nonfarm Payrolls is expected to show that +200k jobs were added to the economy in March, down from +275k in February. The US unemployment rate is expected to remain at 3.9%.

The Canadian economy is expected to see +25k jobs added to the economy in March, down from +40.7k in Feb. The unemployment rate is expected to edge higher to 5.9% from 5.8%.

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What Happened Yesterday

Market Movements as of New York Close 28 Mar 24 (31 Mar for Crypto)

The US PCE Price Index showed that prices rose +2.5% YoY in Feb as expected, up from +2.4% in Jan. The core index showed that prices rose +2.8% YoY in Feb as expected, down from +2.9% in Jan.

The US stock and bond markets were closed due to the Good Friday holiday. 

The crypto market traded in a relatively tight range with Bitcoin falling as low as 69,200 (-2.4%) and Ether falling as low as 3,470 (-2.5%). However, it then recovered over the rest of the weekend and finished higher.
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Headlines & Market Impact

China’s Taobao working with startup on deliveries by reusable rocket

Notable Snippet: Chinese rocket maker Space Epoch is working with Alibaba’s online shopping platform Taobao to make reusable rockets for express deliveries that could arrive globally in an hour, Space Epoch announced on Sunday.

The project is in early trial stages and aims to develop a rocket that can carry up to ten tons of cargo in a 120 cubic metre container, Space Epoch said in a notice posted on its official WeChat social media account.

Beijing-based Space Epoch is looking to use its ‘Yuanxing-1’ rocket, which completed ignition and offshore recovery tests last year.

The company will carry out rocket delivery tests in the near future, noting that achieving its goals will not be easy in the short term.

President Xi Jinping has called for the expansion of strategic industries including the commercial space sector, deemed key to building constellations of satellites for communications, remote sensing and navigation.

Last year saw 17 Chinese commercial launches with one failure, among a new record 67 orbital launches by China. That was up from 10 commercial launches in 2022, including two failures.

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U.S. updates export curbs on AI chips and tools to China

Notable Snippet: The Biden administration on Friday revised rules aimed at making it harder for China to access U.S. artificial intelligence (AI) chips and chip making tools, part of an effort to hobble Beijing’s chip making industry over national security concerns.

The rules, released in October, seek to halt shipments to China of more advanced AI chips designed by Nvidia (NVDA.O) and others as Washington cracks down on Beijing over concerns its advancing tech sector could help boost China’s military.

The new rules, which run 166 pages in length, go into effect on Thursday. They clarify, for example, that restrictions on chip shipments to China also apply to laptops containing those chips.

The Commerce Department, which oversees export controls, has said it plans to continue updating its restrictions on technology shipments to China as it seeks to bolster and fine-tune the measures.

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New US inflation data ‘along the lines’ of what Fed wants, Powell says

Notable Snippet: The personal consumption expenditures (PCE) price index data for February, which was released on Friday, “is what we were expecting,” Powell said, and even though the numbers showed less of a slowdown than last year, “you won’t see us overreacting.”

The data last month were “not as low as most of the good readings we got in the second half of last year, but it’s definitely more along the lines of what we want to see,” Powell said during an appearance at the San Francisco Fed where he was interviewed by Kai Ryssdal of public radio’s “Marketplace” program.

Powell’s comments were in line with his remarks after the Fed’s policy meeting last week, in which he said higher-than-expected inflation in January and February had not changed the sense that price rises would keep falling this year to the central bank’s 2% target.

Powell in recent weeks has had to reconcile expectations that rate cuts will begin this year with data showing improvement in the inflation numbers had slowed to start the year.

“We need to see more progress on inflation before cutting rates, ” he said on Friday. “The decision to begin to reduce rates is a very, very important one … The economy is strong right now, and the labour market is strong right now. And inflation has been coming down. We can and we will be careful about this decision because we can be.”

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Best,
Phan Vee Leung
CIO & Founder, TrackRecord