Spreadex Market Update
US Inflation on Watch As Bitcoin Breaks Above $30k
Bitcoin Breaks Out on Lower Fed Rates Outlook
Bitcoin surged above $30k yesterday for the first time since June last year, reflecting the positioning adjustments being made in the market ahead of today’s US CPI report. BTC futures have been on a tear this year as the outlook regarding Fed rates has shifted. Yesterday, FOMC member Goolsbee called for “prudence and patience” from the Fed regarding any further rate adjustments. If today’s US CPI release confirms the expected drop in inflation the market is looking for, Bitcoin should see further price gains with $32460 the next target for bulls.
NZD has been on the ropes today. A weaker opening for risk markets on the back of fresh IMF warnings yesterday has seen the Kiwi bearing the brunt of the risk-off tone today. NZDUSD is currently trading back below the $.62 level as the reversal from the $.6374 April highs gathers steam.
The IMF yesterday sounded the alarm over the health of the global economy. On the back of recent banking sector turmoil, the ongoing impact of the Russia-Ukraine war, elevated inflation and central bank tightening, the IMF warned that global growth is likely to fall sharply this year. As a result of weaker growth, the IMF also cautioned that central bank interest rates are likely to fall to pre-covid levels once the current inflationary spike has been corrected, though didn’t give clear timing on this forecast.
Finally, the BOC meets today for its April rates decision. On the back of the recent drop in inflation, no change is expected from the bank with Macklem likely to reaffirm the bank’s message that it will continue to monitor the pass-through effects from its tightening campaign and the trajectory of inflation but stands ready to more if needed should CPI bounce back.
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