🇨🇳 Chinese Stimulus: Bitcoin Surges as Gold Holds its Ground!

Good Morning!

Beijing's new stimulus promises stirred up a financial typhoon. Chinese stocks rode a roller coaster Monday, with Hong Kong shares taking a nosedive while mainland markets mostly climbed. The culprit? A stimulus package big on promises but light on specifics. No dollar figure attached left foreign investors scratching their heads, while locals seemed more optimistic. It's a financial Rorschach test – what do you see in these economic inkblots?

In today’s email:

• China: Government announces stimulus measures but will it be enough?

• Bitcoin: Back above $64k, will we see it trend higher?

• ETC Group: Recommends holding Ethereum, Solana, and Aptos

• Gold: Strong as ever, holding $2650+

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THE BIG IDEA

China's stimulus announcement leaves investors wanting more details, but market optimism persists amid economic challenges

China's long-awaited stimulus reveal turned out to be more of a financial striptease than a full monty. Finance Minister Lan Foan's weekend press conference was heavy on promises but light on the juicy details investors were craving.

The government pledged to boost debt, prop up the property sector, and throw consumers a lifeline. But the burning question on everyone's mind – "How much yuan are we talking about here?" – went unanswered. It's like being told you're getting a raise without knowing the amount. Cue the investor head-scratching.

This vagueness didn't sit well with some market watchers. Shanghai QiuYang Capital's Huang Yan lamented the lack of a concrete roadmap, leaving investors to navigate this economic maze blindfolded. The market had been buzzing with speculation of a stimulus package anywhere from 2 to 10 trillion yuan. That's quite a spread – like estimating your dinner bill between "cheap takeout" and "Gordon Ramsay's latest hotspot."

Given the fog of fiscal uncertainty, China's stock market has been volatile

The CSI300 Index surged 16% since the central bank kickstarted its most aggressive stimulus measures since the pandemic. But recent wobbles suggest investors are starting to wonder if this policy support has enough muscle to revive growth.

HSBC's Fred Neumann advises patience, hinting that the real fiscal fireworks might not pop until the National People's Congress later this month. Meanwhile, Jason Bedford, a China market veteran, sees signs that authorities are gearing up for a credit demand revival.

So, what's an investor to do? Keep your eyes peeled, your calculators handy, and maybe brush up on your tea leaf reading skills. This financial drama is far from over, and the next act promises to be a doozy.

MARKETS AT A GLANCE

TOP NEWS

Oil prices drop over 1.5% due to China's weak economic data and unclear stimulus plans, despite Middle East tensions

Black gold's on a slippery slope. Brent and WTI crude futures took a nosedive, shedding over 1.5% early Monday. The culprit? China's economic woes struck again, with disappointing inflation data and a vague stimulus plan leaving oil bulls scratching their heads. Even the specter of Middle East tensions couldn't keep prices afloat. It's a crude awakening for the energy markets!

S&P Global Ratings forecasts more sovereign foreign-currency debt defaults in the coming decade due to higher debt and borrowing costs

Brace for a global financial hiccup! S&P Global Ratings is sounding the alarm on sovereign foreign-currency debt defaults. The culprits? Skyrocketing debt levels and pricier hard currency borrowing. Some nations are already spending a whopping 20% of government revenue just on interest payments. It's a perfect storm of inflation, currency woes, and external debt imbalances. Time to keep a close eye on those sovereign balance sheets.

Euro zone's cooling job market signals potential for faster ECB rate cuts as economic concerns grow

The euro zone's job market is finally showing cracks. After years of surprising resilience, employment growth is slowing, and vacancy rates are dropping. This shift has the European Central Bank considering faster interest rate cuts. While unemployment remains low, big names like BASF and Thyssenkrupp are already trimming staff. The ECB's balancing act? Cooling inflation without freezing the job market.

CRYPTO

Bitcoin surges above $64,000, leading crypto market gains amid renewed China stimulus hopes and increased demand for bitcoin-based assets

Crypto bulls are charging! Bitcoin leapt over the $64K fence, with Ether and Solana's SOL hot on its heels. The rally sent $100 million in short positions to the slaughterhouse. Memecoins like Mog and SPX6900 are stealing the show, fueling "supercycle" whispers. China's stimulus tease and positive U.S. economic vibes are keeping the "buy everything" party going.

Chinese researchers claim to have breached encryption algorithms using a quantum computer, raising concerns for crypto security

Chinese scientists have reportedly cracked the code on cracking codes. Using a quantum computer, they've managed to breach encryption algorithms that keep our digital assets safe. While it's not a full-scale hack yet, it's a wake-up call for the crypto world. The good news? Vitalik Buterin's already sketching out a potential fix. It's a quantum leap in computing that's got the crypto community quantum leaping into action!

Arbitrum DAO considers recalling $120 million from Gaming Catalyst Program due to missed deadlines

A proposal from Arbitrum DAO member Joseph Schiarizzi suggests recalling 220 million ARB tokens ($118.6 million) from the Gaming Catalyst Program (GCP) after it missed key deadlines like issuing RFPs and providing regular updates. The program, which launched in June, aimed to boost the Arbitrum gaming ecosystem but has faced scrutiny over transparency and progress. Offchain Labs defended the delays, citing the complexity of setting up the program. Schiarizzi insists the goal is to get GCP back on track, not to end it.

ETC Group recommends holding Ethereum, Solana, and Aptos amid market fluctuations

ETC Group advises investors to hold onto Ethereum, Solana, and Aptos, citing their strategic roles in the layer-1 blockchain space. Despite recent setbacks like Ethereum's underperformance due to lowered gas fees and weak ETF flows, the network retains a 45% market share. Solana shows sustained growth, with $1 billion in bridged net flow, while Aptos exhibits strong developer activity, particularly in gaming. However, Aptos faces challenges with its Move programming language compared to Solana's more established Rust ecosystem.

GOLD

Gold's rally set to continue amid US rate cuts and geopolitical risks

Gold prices surged over 28% this year, reaching new highs following the Fed's September rate cut. Safe-haven demand driven by Middle East tensions, the Ukraine war, and the upcoming US election is expected to sustain upward momentum. While central bank buying slowed in August, overall demand remains strong. Analysts predict gold will average $2,580 in Q4 and $2,700 in 2025, supported by lower borrowing costs and ongoing geopolitical uncertainties.

DAILY ECONOMIC CALENDAR (ET)

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