🤑 Goldilocks Economy: Perfect for Bitcoin and Gold?

Good Morning!

US job market strength sparks 'no landing' scenario, boosting global markets despite ongoing Middle East tensions. The economic landscape's shifting. Friday's job report flipped the script from "hard landing" fears to a potential "no landing" – where the job market stays hot while inflation chills. This narrative's so gripping it's overshadowing the grim anniversary of Israel-Hamas conflict. Asian markets are riding the Wall Street wave, with Japan's Nikkei surfing a 2% swell. The dollar's flexing its muscles, sending other currencies to the gym. But watch out – Japan's finance ministry is giving the side-eye to speculators, hinting at potential intervention.

In today’s email:

• Jobs: Markets now pricing in a ‘no-landing’ scenario?

• Bitcoin: Back to $64k, are we ready to break higher now?

• NFTs: Making a comeback? 

• Gold: Still holding strong despite strong jobs data 

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THE BIG IDEA

ECB's potential rate cut decision next week is more complex than markets anticipate, with arguments for and against the move creating uncertainty

The financial world's abuzz with chatter about the European Central Bank (ECB) potentially slashing rates next week. But hang on – this isn't the slam dunk markets seem to think it is.

Sure, weak sentiment indicators and inflation dipping below 2% for the first time in ages have got traders salivating. But let's not forget the ECB's September game plan: a gradual, measured pace for rate cuts. Has a single batch of gloomy data really flipped the script?

On one side, we've got deteriorating growth outlooks and inflation undershooting targets. Some ECB doves are already cooing about an October cut.

But hold your horses – there's another side to this coin

Hard macro data since September? Zilch Those sentiment indicators the ECB used to side-eye? They're driving the doom and gloom now. And while headline inflation's taking a nosedive, services inflation is still partying like it's 1999 (or at least pre-pandemic).

Here's the kicker: unlike in a tightening cycle, the ECB doesn't need to dance to the market's tune when it comes to easing. Delivering fewer cuts than expected? That could actually help keep inflation in check – not exactly a nightmare scenario for our central banking friends.

So, what's the verdict? It's anyone's guess. The ECB's decision hinges on whether they see recent data as one big disinflationary trend or just a blip on the radar. If they do cut, it's a signal they're pivoting to growth support – a whole new ball game.

Whatever happens, one thing's for sure: next week's ECB meeting is shaping up to be more nail-biting than a penalty shootout in the Euros!

MARKETS AT A GLANCE

TOP NEWS

Goldman Sachs reduces US recession odds to 15% following strong job report, maintaining rate cut forecasts

Goldman Sachs is feeling bullish after the latest jobs report dropped. They've slashed the odds of a US recession to a mere 15%, down from 20%. Why? September's job gains were hotter than a freshly minted Bitcoin, with unemployment dipping to 4.1%. Goldman's crystal ball still shows rate cuts on the horizon, but they're pumping the brakes on expectations for another 50-bps slash. October might throw a curveball with hurricanes and strikes, but for now, the job market's looking stronger than a triple-shot espresso.

Treasury yields edge up as investors weigh Fed's next moves after strong jobs report

Treasury yields inched up Monday morning, reacting to Friday's knockout jobs report. The 10-year yield flirted with 4%, while the 2-year climbed a tad higher. With 254,000 new jobs in September, the economy's flexing its muscles. This strength might nudge the Fed towards smaller rate cuts. Traders are betting on a quarter-point trim in November, but keep your ears peeled – we've got a Fed speaker lineup today that could drop some rate hints.

BOJ's regional report hints at potential future rate hikes, showing economic improvements despite no immediate action signals

The Bank of Japan's latest regional report is giving off more "rate hike" vibes than a techno DJ's playlist. They've upgraded assessments for two regions and noted growing wage increase expectations among business leaders. While the BOJ's likely to keep things steady at month-end, this report's a gentle reminder that rate hikes aren't off the table. With Japan's biggest labor union gearing up for next year's wage talks, all eyes are on potential salary bumps that could influence the BOJ's next move.

CRYPTO

Bitcoin nears $64,000 amid positive US job data and rate cut expectations, despite geopolitical tensions

Bitcoin's pulling a Lazarus act, rising from its $60,000 slumber to flirt with $64,000. What's got crypto bulls charging? A jobs report juicier than a well-done steak and whispers of another Fed rate cut. Analysts are calling the US economy "Goldilocks" – not too hot, not too cold. But before you pop the champagne, remember: Middle East tensions are lurking like a bear in the woods. Can Bitcoin keep its momentum, or will geopolitics play party pooper?

Memecoins inspired by Len Sassaman emerge as crypto community anticipates HBO's Bitcoin creator documentary

Memecoins featuring Len Sassaman – the bookies' favorite for Satoshi – are popping up faster than conspiracy theories at a flat earth convention. We've got LEN tokens, SASHA coins (for his cat), and even ODIN tokens (apparently another feline friend). These digital trinkets are raking in millions. Is this peak crypto madness or a genius market play?

NFT weekly sales volumes hit a high since August, nearing $85 million

For the week ending Oct. 6, NFT sales surged to nearly $85 million, marking the biggest selling week since late August. While top blockchains like Bitcoin and Ether saw drops, Mythos Chain and Polygon experienced sharp gains. Dmarket led in sales, and overall transactions jumped by over 71%, signaling a renewed interest in the NFT space despite broader market struggles.

Bitcoin’s security may not be complete without better privacy measures

Bitcoin’s ultimate security promise relies on transparency, but without privacy, transactions remain vulnerable to seizure or criminal activity. While Bitcoin’s proof-of-work system ensures robust security, its lack of privacy features raises concerns for users. Emerging solutions like Taproot, Lightning Network, and Silent Payments aim to enhance Bitcoin’s privacy, but a full privacy upgrade may be necessary to achieve true final settlement in the long run.

GOLD

Gold is poised for another price surge, with $3,000 in sight

Technical indicators suggest gold is gearing up for a major breakout. With geopolitical tensions and growing demand for safe-haven assets, analysts believe the precious metal could surge past the key $2,075 level, potentially hitting $3,000. Despite a short-term pullback due to strong U.S. jobs data, gold remains on track for one of its best annual performances.

DAILY ECONOMIC CALENDAR (ET)

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