The SEC Is Likely To Allow The First U.S. Bitcoin Futures ETF To Begin Trading Next Week

Okay, it is Friday the 15th of October. Hope you're doing well and hope you've had a great week so far. I'm just going to jump straight in and start talking about Bitcoin. Seen a decent move in the overnight session which has seen Bitcoin futures bust through $60,000, and it all comes on the back of this headline which came out in the overnight Asia-Pac session where the SEC is poised to allow the first US Bitcoin futures traded fund to begin trading. And this is, of course, a watershed moment for the cryptocurrency industry. I must stress, though, that this has not been confirmed. In fact, the SEC spokesperson declined to comment on this report, according to Bloomberg, who tried to reach out to them overnight. But again, looking at what's been on the agenda here, the push to have a Bitcoin-related ETF has been something which has been underway for several years. So this being, as I said, a watershed moment. And if so, would mean that there's, as you can see on this table, 4 futures-backed Bitcoin ETFs that could begin trading on US exchanges as soon as this month. As you can see here, 18th, 19th, and the 25th of October, from the likes of Invesco, ProShares being the first one here. And so looking at the chart, the overnight move was, was sharp in terms of reaction. We, we broke through the weekly high which was the prior overnight APAC session high at $59K. And as you can see here, we've run up. I've just put a rectangle on the overnight movement that we've seen in Bitcoin futures. Just looking here at this, this trend channel with some of the price action that we've been looking at over the last 2 weeks. So I'm just quite interested to see here, we've just fatigued a little bit on that initial blip on the reaction when Europe is coming to the markets. Just found a bit of a top on that top end of that trend line, which would come in coincide as well just short of the $61,000 mark. So Yeah, some really strong moves in Bitcoin on the daily chart. Obviously breaking above $60K, if we can close above that, is somewhat symbolic. And we can see here that previous high was at the same level on the 10th of May and was an inflection point through the kind of end of Q1, commencement of Q2 of this year, and would open up then further upside technical levels of relevance, not until we to get a little bit higher, probably around first of all $61K, just above $61,350, and then ultimately $64K and then back up to the 65 territory. So yeah, we'll be interested to see how the close on Bitcoin looks today. But otherwise, other than that, let's just jump straight into an overall flavor of what we've got for other asset classes this morning. And as you can see, equity index futures are slightly positive, albeit a slight drift off their Asia-Pacific session highs. Does come in the context of a really strong close on Wall Street and As a matter of fact, you know, just having a look at the likes of the S&P, the NASDAQ, now over the course of the last 48 hours or so, really phenomenal comeback after just printing that double bottom that we had through Tuesday, Wednesday, the mid part of the week. We've just come racing back to the upside. And on the daily chart for the S&P here, we're back above the 50 DMA, which is obviously quite key. And again, interested to see how we close the session later on today and And for the Nasdaq, we're just below that point. So still keeping a half an eye there. Nasdaq obviously tends to swing out and underperform depending on the— largely the rate environment and hinged on the Fed expectations. And on the daily chart, you can see here an interesting one to watch if we continue to pressure on or push to the upside as we go into the US session today, that 50 DMA with that rectangle here I've put which has been a key area of resistance previously back in summer. Uh, and if we can break back above there, then perhaps we can continue to push back on, on this recovery higher up. But that would be a key obstacle to tackle in the short term for the NASDAQ, which on the 30-minute bar you can see has just had a really phenomenal ride, uh, of late over the last 2 sessions or so. Um, why has that been happening? Well, a couple of things to just have a quick look at. Um, this is looking at earnings season, uh, and obviously yesterday, um, we're starting to see that pick up a little bit more pace. Couple more banks were reporting, um, so the largest financial institutions— Citi, Bank of America, Morgan Stanley— they all finished higher yesterday post-earnings. Uh, UnitedHealth Group led gains in the Dow. They were up in excess of 4%. The healthcare giant raised its outlook, uh, and as you can see here, um, these green rectangles indicative of the earnings seasons that we've had since the onset of the pandemic and every single earnings season generally we've moved higher. Question marks a little bit more this time and earnings going forward because now we're starting to see just the economy just come off the boil a little bit from that rampant pricing in of the recovery coming out of the pandemic. But certainly be interested to see how things play out. Still super early, of course, in the, in the earnings cycle so far. The other thing, of course, we had yesterday was the likes of the applications for US state unemployment benefits. They fell to their lowest, as you can see here, since March of 2020. So the best that we've had since the pandemic, showing employers are hanging on to their workers in this tight labor market. And then the other thing was prices. And as you can see here, cost pressures are cooling. Prices paid to American producers rose in September, the slowest pace of the year. Amid cooling costs for services including airfares as the Delta variant impact impacted demand. So yeah, kind of to explain the rationale why equities have been so bullish, I guess in a sense is the case of, look, it's not that the Fed are not going to taper and start their tightening cycle, that's still very much going ahead. It's the fact that inflation, yes, is high, it's sticky, it's perhaps non-transitory, However, it's cooling. Also, some signs of that being the case, and whether or not it's cooling or not, it's just not going higher at this point. And that seemingly has been enough from the CPI, PPI reports to just alleviate some of that yield movement that we were seeing last week, which was really dictating proceedings as people were really aggressively pricing in those inflation expectations. So they've been perhaps reined back a little bit. As to where we're at this moment in time. Some of that, the jobless data also helping with some of the positive earnings as a consequence. Hence the reason we get a little bit of a bullish sentiment just materialize over the course of the last 48 hours. A few other things then to be aware of. But before I get into them, don't forget we've got the latest episode of The Market Maker coming out on the podcast channel. So again, Apple, Spotify, Google Podcasts, just type in Amplify Me Market Maker and the latest episode is going to be going out at 10 AM this morning. So remember to check that out. Otherwise, yeah, a few other news stories and then we'll look at a few other charts. This is to do with vaccines. So I don't think this is particularly a big deal. I'd say largely expected, but again, another kind of positive in regards to another variable to throw in the mix. A panel of expert advisors to the US FDA unanimously voted yesterday to recommend booster shots of Moderna's COVID-19 vaccine for Americans aged 65 and older, or those at high risk of severe illness or occupational exposure to the virus. So again, when generally the efficacy rates of vaccines are decreasing, it's well known that then that's going to require booster shots. So the more approvals that come the more that I can counteract any vaccine hesitancy and things like that to give people more confidence to go ahead, go out, go ahead and get those booster shots. And again, that helps just again alleviate any concerns about any return of COVID as we go into the seasonal kind of cooler months of the year in the Western, in the Western world. Otherwise, other charts then following some of the movement in equities. Oil is right back up there again. Not that there's been anything too specific in an oil-related headline, but as far as the session is concerned today from an intraday perspective, I'd keep an eye on the weekly high that was printed on Monday. We've come just short of that as Europe has stepped into the market. That would be at $82.18. Obviously on the weekly, well above that key area of really $80. And so oil looking good at the moment. I mean, from a, from a more multi-day week perspective, even if we were to pull back, you still got some pretty solid support. Now I'd be eyeing up and around that $80 handle, and now we're trading at $82. Wouldn't be a surprise at all, barring anything unexpected, that we continue to just— if we can break out above that weekly high, then we continue pushing on with the next kind of technical area of resistance not seen till 84 in the futures market at the moment. Currency-wise, it's pretty quiet. Dollar perhaps a touch softer this morning. The Dixie's trading down about 0.1%, so just giving a bit of like reprieve for the major currency pairs. And top left, EURUSD cable up 16, 29 pips each respectively. As far as the commodity market, gold pretty much locked in a period of consolidation after the breakout to the upside that we had yesterday afternoon in the US session. And so confined by at the moment $1,800 on the upside in the futures market and be looking down at around the S1 and the low that was seen in the APAC session at 1788 as an area of support to define that period of consolidation that we're in. All right, a few other headlines overnight in Asia, perhaps a few things just to be aware of, just in the context of what's been going on with Evergrande. Not too much movement on that specific company in itself, but China have come out and loosened restrictions on home loans at some of its largest banks, according to people familiar with the matter. Default risks mounting for China developers as funding dries. And so a bit of an attempt here to just, just get back into control of that situation and stop any spillover effects that that can have from Chinese authorities. In a similar type of fashion here, the PBOC, the central bank, injected 500 billion yuan through its medium-term lending facility. That was very much generally in fitting with expectations. Generally, that was what was rolling off and maturing today. So they've just kind of filled that void. As well to keep the system functioning flush of liquidity for the time being. Um, elsewhere, Brexit. Um, I did write quite a bit about this in my notes that you can access on my Twitter account. My handle is here if you want to have a read of that. But a long story short, the European Commissioner yesterday struck a bit of a conciliatory tone, presented his proposals resolving what's been this, the issue from the beginning of Brexit, which has been the how they're going to deal with trade and the issue of Northern Ireland. And apparently the European Commissioner early in the day told European diplomats behind closed doors that the bloc would retaliate forcefully if the UK seeks to pull out of the Northern Ireland Protocol. Now the problem that that has is that the PM Boris Johnson is expected to pushed back against the latest proposal from Europe. And so hence the reason why we're getting a little bit of an elevation, if you like, in, in the confrontation, at least a verbal rhetoric happening between the two sides once again. You know, we haven't been here for a while, but we have been here, of course, many times over the recent years. Again, what's the outcome? Hard to say at this point. Frost, who's on the UK side, said that the UK is prepared to trigger Article 16, a clause in the protocol that allows for unilateral safeguard measures if serious economic, societal, or environmental difficulties result from its implementation. Um, so again, while the UK have kind of been somewhat surprised almost by the proposal and somewhat concessions being made by Europe so far to come forward with their latest plan. British demands that the European Court of Justice oversight be ended is a key sticking point for the UK. So at the moment, there's going to be a lot more hot words said, I guess, but I don't necessarily think that that's going to faze the sterling currency for now because I think the market's fairly acclimatized to the fact that there's probably not going to be a result of this. It will just drag out for a considerable period of time. If there's any looming deadlines on any type of agreements, they'll just get rolled over as they have done multiple times in the past. All right. So a quick look at the day ahead. What have we got on the schedule? So pretty quiet overall for this morning. Not too much going on. French CPI data coming out in the next half an hour or so from when I'm recording this, expected year on year 2.1%. which would be unchanged from previous. Otherwise, it's really more of a US-centric session. As you can see here, you've got US retail sales. First of all, the headline figure for this afternoon expected at -0.2%, coming back down from the previous +0.7%, as you can see here, that we had previously in the month of August. Now, according to analysts at ING, they say that retail sales would be dragged, dragged lower by a plunge specifically in, uh, vehicle sales. That's more of a function of a lack of supply than a drop-off in demand, given the dearth of inventory to sell, the ongoing production bottlenecks, and the fact that second-half car prices are just astronomically high at the moment. They're up around 45% this year. So outside of autos, the figures should remain positive, with rising incomes and surging household wealth providing strong underpinnings. So I guess the takeaway from what they're suggesting is although it might look weak on the surface, if it is indeed a factor of then specifically weighted to auto sales, you can almost disregard that, look at the other underlying figures, and it might be that they're actually more positive, but it's just that motor, motor vehicles are pulling the number down. So if there is any initial knee-jerk negative type reaction, just be careful of a quick reversal as, as traders will be looking out for those details. Otherwise on the calendar, you've also got the New York Fed manufacturing figure at the same time as retail sales. Then later on you get University of Michigan sentiment. It's the preliminary number for October, so worth keeping an eye on with that, looking for a slight improvement from last month up to 73.1 from 72.8. Speaker-wise, Fed's Bullard, non-voter, 4:45, obviously more on the hawkish disposition. And then Fed's Williams, close one to watch, uh, voting member speaking at 5:20. And that is it. So again, check out the latest Podcard episode, it's coming out later on this morning, 10 o'clock London time. Had a chat with Eddie about the bank earnings from this week and investment banking fees just going through the roof. Why is that happening? How long can it last? How hedge funds are looking to get in on some of that deal-making action as well. So yeah, hopefully you'll enjoy it. And with that, I wish you a great session and a fantastic weekend ahead. Take care.