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Quick Macro Update
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Last week, crypto prices have tested the topside of the recent range with BTC trading up to 20,500 and ETH to 1,400 only to mean revert and test recent lows of 18,920 in BTC and 1,260 in ETH this week. As expected, with little to no crypto narrative to follow, crypto has been driven purely by macro forces.

In that regard, all eyes are on the Fed and by extension on CPI print this Thursday, where uncertainty remains high.


Sell-side economists are predicting a rise of approximately 0.4% m/m and 6.5% y/y in core CPI, carried by strong shelter inflation. We think that as long as labour demand remains robust (as shown by last week's upside surprise in NFP) and CPI prints high, Fed will continue to keep financial conditions tight, with no pivot in sight.


USD continues to remain bid, as real returns on dollar outperforms every other asset class YTD. Commodities and Precious Metals showing grim figures with WTI, Lumber, Copper, Palm Oil and Gold down in nominal terms

Correlation across assets

Amalgamation of global macro sentiment has driven correlations across assets back to extremes. BTC correlation with equities and gold (positively correlated) at all-time highs and USD (inversely correlated) at all-time lows.

Puts and Calls

In the crypto vol space, we are seeing heavy demand for front-end as market is buying up gamma ahead of Thursday's print. Most were buying puts (often funded with short calls) and preference was BTC over ETH.

Q4 predictions

Ultimately, as the liquidity tap is tightened fully, core CPI remains sticky above target, and geopolitical risks start to weigh in more, Q4 will definitely be more challenging.

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War Room - 20 November 2023
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