Here’s what’s up with the market today.
Looks like it’s gonna be a bit of a rollercoaster.
– 8:00-10:00 The market’s in the red (downward trend).
– 11:00-15:00 It turns green (upward trend). This usually happens when the People’s Bank of China (PBOC) withdraws liquidity, and it’s tied to the Federal Reserve’s Reverse Repo Program (RRP). If the Fed’s RRP goes down, the PBOC tends to withdraw liquidity, and this happens every 3 days.
– 16:00-18:00 Back to red.
– 19:00-22:00 This is interesting. If the ADP employment report (a jobs data report) drops, Bitcoin tends to rise. Factory orders also go up, but here’s the catch: it’s not because of retail demand. It’s because factories are placing orders themselves, not because people are buying more.
– 22:00-24:00 Red again.
– 01:00-08:00 Green. The Fed’s RRP went up slightly last night, but if it drops over the next few days, it could signal that the Fed is waiting for more data (like the Non-Farm Payrolls report on Friday) before making big moves.
Now, let’s talk about the bigger picture. There’s a lot of drama happening globally:
Interest Rates: The chances of the Fed cutting interest rates have gone up. Earlier, people thought there’d only be one rate cut in 2025, but now it looks like there could be three. Yields (returns on bonds) are dropping, and tensions between Canada, China, and the U.S. are heating up over tariffs. The Nasdaq (a tech-heavy stock index) is down 10%, and Trump’s policies are adding to the uncertainty.
Recession Fears: The odds of a recession in 2025 have jumped to 39%, up from 26% earlier. This is partly because of Trump’s policies. He wants lower interest rates, but the Fed won’t budge unless job creation is threatened. Stocks are already down nearly 10%, and we’re getting close to that breaking point.
Trade Wars: Remember Trump’s first trade war? It’s looking like we might be heading into round two. China is slapping tariffs on the U.S., and Canada and Mexico are caught in the middle since they rely heavily on exports to the U.S. (87% of Canada’s exports and 77% of Mexico’s go to the U.S.). If China steps in and starts buying more from Canada and Mexico, things could get even messier.
China’s Moves: China is injecting liquidity into its economy (353 billion yuan this time) to keep things stable. When they inject more than they withdraw, it’s a sign they’re serious about stimulating the economy. Last month, their methods were a bit sneaky, but this month, things seem more transparent. Gold prices are rising, and housing prices might follow soon.
Trump’s Tax Cuts: Trump is talking about cutting taxes on domestic production and manufacturing. This could weaken the U.S. dollar because it increases the money supply, which might actually be good for crypto liquidity (more money flowing into the market).
So, what’s the takeaway? The market is super sensitive right now to global events, especially around trade wars, interest rates, and liquidity injections. Crypto is reacting to all of this, with Bitcoin getting a boost when jobs data is weak or when there’s more liquidity in the system. But overall, there’s a lot of uncertainty, and things could swing wildly depending on what happens with the Fed, Trump, and China.
It’s like watching a high-stakes poker game where everyone’s bluffing, and the market is trying to guess who’s holding the best hand. Buckle up—it’s going to be a bumpy ride!
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