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Global Macro

In global macro, we've seen better risk-on tones this week. Equities picking up slightly on good bank earnings and better sentiments toward tech stocks.

The UK

Headline news of UK's Hunt tearing up Truss' mini-budget, reversing tax-cut plans and reviewing the £2,500 price cap for energy yielded positive sentiments for markets. 30Y Gilt currently trading at 4.29%, plunging 48bps after Hunt's announcements.

China

Across the globe, in Asia, President Xi Jinping's 105 minute speech on Sunday boasted new growth and development prospects for China, vowing to reclaim technological independence. However, China has delayed the release of economic data indefinitely with no further explanation, inevitably creating speculations of worse than expected economic data print.

The Yen

The Yen weakened to a 32 year low trading above 149 prompting further speculations of the Japanese authorities intervening again. BoJ and FSA are scheduled to hold the 17th cooperation on financial stability, where we could see a pivot that would change the narrative for JPY.

CPI, BTC and ETH

In the vol space, as we shared in our last broadcast, demand for gamma skyrocketed into CPI and sold off right after. BTC 14 Oct ATM vols trading from 50 handle pre-CPI, up to 110 before getting smashed back down.

Since the massive quarter-end expiry, both BTC and ETH vols have been drifting lower. Skews on the other hand, have continued to rally (become less negative) with the 1W risk reversals (calls minus puts) almost flat for both BTC and ETH as the market continues to unwind CPI-related downside protection.

With little calendar events till the next FOMC in early November, crypto continuing to lag behind equities, and skews near flat, protective downside structures are the cheapest levels they have been since June.

Disclaimer

QCP Capital is an exempt payment services provider pending licensing by the Monetary Authority of Singapore as an MPI for Digital Payment Token Services under the Payment Services Act (2019).

This information contained in this document is intended as a general introduction to QCP Capital and its activities as a Digital Payment Token (DPT) service provider and is for informational purposes only. QCP Capital is not acting and does not purport to act in any way as an advisor or in a fiduciary capacity vis-a-vis any counterparty. Therefore, it is strongly suggested that any prospective counterparty obtain independent advice in relation to any trading investment, financial, legal, tax, accounting or regulatory issues discussed herein. This document is only directed at informed and qualified investors. By reading this material attests that you are fully aware that trading of DPTs is not suitable for the general public and that you are an informed and qualified investor, and are also fully cognisant of all technological and financial risk(s) associated with trading Digital Payment Tokens.

Before you engage us or any of our services, you should be aware of the following:

Please note that this does not mean you will be able to recover all the money or DPTs you paid to your DPT service provider if your DPT Service Provider’s business fails.

You should be aware that the value of DPTs may fluctuate greatly. You should buy DPTs only if you are prepared to accept the risk of losing all of the money you put into such tokens. your DPT service provider if your DPT service provider’s business fails.

You should not transact in the DPT if you are not familiar with this DPT. This includes how the DPT is created, and how the DPT you intend to transact is transferred or held by your DPT service provider. You should be aware that your DPT service provider, as part of its licence to provide DPT services, may offer services related to DPTs which are promoted as having a stable value, commonly known as “stablecoin”.

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Disclosure: The authors of this content and members of Nansen may be participating or invested in some of the protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Nansen does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Nansen at any time without notice. Nansen accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.