Watch Head of Trading Academy, Gavin Pannu run through current market themes covering the following topics:
*Political Risk at the current moment
Market Trading Analysis
Markets are a bit nervous to start the week as the steep acceleration higher in US treasury yields continued in the Asian session overnight. Even a casual inspection of prior market regimes shows that a steep back-up in yields at some point will prove dangerous for equity valuations. The 5-year US Treasury yield has vaulted above the 30-year for the first time since 2006.
Elsewhere, oil is several dollars lower on hopes for a peace deal in Ukraine.
Sentiment remains strong in the US market overnight after a positive session yesterday, but in Asia, sentiment was downbeat in Chinese markets as Shanghai reported record Covid case numbers. In FX, the JPY finally managed to fight back slightly after posting new cycle lows in its recent plunge late yesterday. Global yields are pinned near cycle highs after a historic rout in performance for bonds over the last year and a particularly bad quarter-to-date.
Bitcoin continues its rally and has reached a high of around $47,600 recently. Bitcoin’s on-chain metrics, which have shown long-term holders accumulating over the past few months, are finally proving to be accurate. With all macro headwinds being priced in for the short term, we are seeing some long-awaited relief. The Crypto Fear and Greed index has reached 60 which is classified as Greed. Bitcoin is facing heavy resistance, but if it is able to hold above the $46,000 level which roughly marks the yearly open heading into Q2, We could see further upside. Bitcoin has closed above the short-term holder cost basis around $46,000 for the first time in months. It is clear that $46,000 is a key pivot for the short-term direction of the market. The theme of institutional adoption continues with BlackRock planning to offer crypto trading to clients while UK and US regulation is set in sights as we can expect regulation announcements in the upcoming few weeks.
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