MARKETS week ahead: September 24 – 29Last week in the news
The long awaited Fed's rate cut finally occurred, with a surprising 50 bps. Thai was the main event which shaped the market sentiment during the previous week. Despite the cut, the 10Y US Treasury yields reverted to the upside, ending the week at the level of 3,74%. The US Dollar was losing in value, supporting the price of gold to reach a new all time highest level at $2.621. The US equity markets responded positively to the rate cut, pushing the S&P 500 to the higher grounds, ending the week at 5.702. The crypto market was also among weekly gainers, with BTC testing the levels above the $63K.
The event which was long awaited by markets during the previous period, was the Feds pivotal point. This is an expression used by markets to express the point where central monetary authorities start easing monetary policy. Although the market participants were divided on whether the Fed will cut by 25 bps or 50 bps, the Fed's decision came as a sort of surprise. In an after the meeting statement, Fed Chair Powell noted that the Fed sees inflation slowly moving to its 2% target, while the jobs market retains relative stability, while the economy “continued to expand at a solid pace”. In the view of economic projections, the FOMC members currently perceive two more rate cuts, in total of 50 bps, till the end of this year, and 100 points rate cut in 2025 and 50 bps in 2026. The jobs market is perceived to decline to the level of 4,4% till the end of this year, from the current 4,2%. The market reacted positively to the Fed move, where equity markets gained further in value.
Although the economy seems to do well in the US, the housing market is still strongly under pressure. Published data for August, show a further significant drop in home sales in the US of even 4,2% compared to the same month of 2023. At the same time the supply of houses is increasing, reaching a 22,7% increase in August from the same period last year, while the average price of homes are higher by 3,1% compared to the last year.
The Bank of Japan was also discussing the level of rates on JPY during the previous week, and decided to keep them at current levels. The BoJ Governor noted that the Bank is in no rush to increase interest rates, as they are looking for global uncertainties to decrease. This represents the important news for the markets, considering the significant amount of carry trades in JPY.
Apple released its new IPhone 16, however, the company is also in talks with JPMorgan to take over companies cards business from its current provider, Goldman Sachs. As news is reporting, the most challenging parts of negotiation are related to credit cards, considering increasing delinquencies on credit card repayments during this year.
Crypto market cap
Fed`s surprising 50 bps cut during the previous week was perceived overall positively by markets. The crypto market also benefited from increased investors' optimism, where BTC and ETH were leading the market cap to the upside. Total crypto market capitalization was increased by 5%, bringing additional $96B to the value of this market. Daily trading volumes remained relatively stable during the week, moving around $104B on a daily basis, with a little change from the week before. Total crypto market capitalization increase from the end of the previous year currently stands at $508B, which represents a 31% surge from the beginning of this year.
The majority of coins gained during the previous week, with the major ones attracting the most funds inflows in nominal terms. BTC managed to add almost 5% to its value on a weekly basis, increasing it by $59B. ETH followed the positive market sentiment, with an increase of its value of 7.3% on a weekly basis, adding $21B to market capitalization. BNB was also in the spotlight of investors, with an increase of 5.7% in value and adding $4.5% to its market cap. The $ 4B also managed to add market favorite Solana, increasing its cap by 6.2% w/w. In relative terms, solid weekly performers were Theta, with a surge in value of 7.7%, IOTA added 9.3% to its value, NEO jumped by almost 6%, while Monero was higher by 5.1% on a weekly basis. There were only a few coins which finished the week with a modest weekly loss, like ADA, which remained almost flat, Zcash was traded down by 2.5% while Maker dropped by 5.4%, but it should be noted that Maker`s 5.4% of circulating coins were withdrawn from the market during the previous week.
The previous week brought back some increased activity when circulating coins are in question. Maker had withdrawn 5.4% of its circulating coins from the market, while Polygon`s withdrawal was 4.5%. There is still no public information about what was behind these withdrawals. On the opposite side, IOTA added 0.6% more coins on the market, while LINK added even 3.1% more coins to the market. Tether added 0.5% new circulating coins, increasing the total market capitalization for this percentage.
Crypto futures market
In line with the spot developments the crypto futures market also reacted positively to the Fed's rate cut and surge in value of crypto coins on the spot market. BTC futures were traded higher by around 5% for all maturities, while ETH futures were traded around 4.9% higher also for all maturities.
BTC`s futures maturing in December 2024 ended the week at the level of $64.365, while those maturing a year later were last traded again above the $70K, ending the week at $71.195. ETH futures maturing at the end of this year reached the last price at $2.605, and those maturing in December 2025 are still struggling to reach the $3K level, still trading at $2.798.
