💥 CPI Countdown: Bitcoin and Gold Poised for Epic Moves!

Good Morning!

In a classic case of market recalibration, we're seeing Trump's election momentum hit pause as traders pivot to hard economic data. Treasury yields have shot up while rate cut expectations for December have cooled to 62% from 77% last week. The big show-stopper? Today's CPI report could either validate or shake up this narrative. Meanwhile, the dollar's flexing near one-year highs against the euro, though this strength is giving gold bulls a headache despite record runs. Watch for Powell's commentary tomorrow and retail numbers Friday – they'll either fan or fizzle these flames.

In today’s email:

• CPI: All eyes back on critical CPI inflation data today 

• Bitcoin: Flirting with $87k, awaiting CPI data

• COIN50 Index: Coinbase’s answer to the S&P500 

• Gold: Sitting around $2600 after post-election pullback

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THE BIG IDEA

Global markets hit turbulence as Trump's return triggers bond yield surge, with Asia taking the heaviest hits while Bitcoin flirts with $90K amid regulatory optimism

Markets are doing their best impression of a seesaw as Trump's triumph continues to ripple through the financial world. Treasury yields have shot up to July highs, sending Asian markets into a tailspin and pushing the dollar to flex its muscles at a three-month peak against the yen (hello, 154.94!).

The plot thickens in the bond market, where yields are staging their own rebellion. The two-year Treasury's now strutting at 4.351%, while its 10-year cousin is eyeing that crucial 4.48% resistance level. Break that, and we might be looking at a sprint to 4.75% – something that could give stockholders more than a few sleepless nights.

Meanwhile, Bitcoin's having its moment in the sun, touching just shy of $90K before catching its breath around $87K.

Trump's promise to make America "the crypto capital of the planet" has digital asset enthusiasts practically dancing in the streets

But it's not all champagne and confetti. China's feeling the heat from potential Trump tariffs, and their stimulus announcements are landing about as well as a lead balloon. Asian markets are wearing the pain on their sleeve – Hong Kong's down 1%, Japan's Nikkei dropped 1.8%, and South Korea's Kospi took a 2.2% hit.

The dollar's supremacy story gets even juicier against the euro, which slumped to a one-year low. Trump's previous comments about the EU "paying a big price" for trade imbalances are echoing through trading floors, while China's central bank is playing defense, trying to prop up the yuan from a three-month low.

All eyes are now locked on today's U.S. CPI data, which could either calm these choppy waters or whip up an even bigger storm.

MARKETS AT A GLANCE

TOP NEWS

Yen breaches critical 155-mark against dollar post-Trump win, putting Japanese authorities on high intervention alert

Japan's currency dance with danger continues as the yen slips past 155 against the greenback – territory not seen since July. With Trump's return driving Treasury yields skyward, Japanese officials are nervously eyeing their intervention playbook. They've already burned through ¥15.3 trillion this year in currency defense, and BOJ's Ueda might need to fast-track those rate hikes sooner than planned.

China returns to dollar bond market after three years, targeting Saudi Arabia in a strategic pivot that underscores growing Middle East ties

Beijing's making waves in the debt market with its first dollar bonds since 2021, eyeing up to $2B in Saudi Arabia – quite the departure from traditional London or New York listings. With orders already exceeding $25.7B, and initial yields hovering around Treasury+25-30bps, this sale signals deepening Sino-Saudi economic ties beyond their usual oil-and-steel dance.

Oil analysts predict potential price plunge to $40/barrel in 2025 if OPEC+ unwinds production cuts, with Trump's return adding extra pressure

Black gold could see some serious red, with analysts eyeing a potential 40% nosedive to $40/barrel in 2025. Between China's sluggish demand, surging non-OPEC supply, and Trump's "drill baby drill" agenda, OPEC+'s grip on prices looks shakier than ever. Though a gradual unwinding seems more likely, Citi's already betting on $60 Brent next year.

CRYPTO

Crypto analyst van de Poppe predicts Bitcoin hitting $1M amid warnings of looming debt crisis and complex Trump presidency impacts

While Bitcoin's dancing around $87K has bulls dreaming big, van de Poppe's crystal ball shows both sugar and spice. He's calling for that magic $1M mark by 2026, but here's the plot twist – it might come packaged with a 2008-style debt crisis. On Trump's return? The analyst shrugs it off as short-term noise, reminding us that Bitcoin's true north isn't tied to any president's compass.

Ethereum's capabilities expand with Zamfir's "time machine" platform enabling smart contracts to execute based on future conditions

Meet STXN, Ethereum's new time-bending upgrade that's turning heads in crypto circles. Spearheaded by proof-of-stake pioneer Vlad Zamfir, this clever platform lets smart contracts play fortune teller – executing trades based on future triggers. With Consensys' backing and Metamask integration, it's bridging today's transactions with tomorrow's conditions.

Coinbase unveils COIN50, a market-cap weighted crypto index mirroring S&P 500's approach, dominated by Bitcoin and Ethereum

Coinbase is rolling out crypto's answer to the S&P 500 with its new COIN50 index. Tracking the top 50 digital assets, it's already sporting a 97.65% yearly return. Bitcoin leads the pack at 50.3%, followed by ETH at 27.5%, while 45 smaller coins share just 11.2% of the pie.

President-elect Donald Trump announced that Tesla CEO Elon Musk and Strive co-founder Vivek Ramaswamy will co-lead the new Department of Government Efficiency, or “DOGE.”

This appointment, symbolically abbreviated like the popular cryptocurrency, has sent Dogecoin’s market cap surging to $60 billion. Musk and Ramaswamy will work on dismantling bureaucratic inefficiencies and driving reform from outside traditional government structures. Meanwhile, Dogecoin's price jumped 12.2% within 24 hours, reflecting growing enthusiasm within the broader crypto market.

GOLD

Gold & Silver Market Summary: Election Impact, Fed Cut, and China Demand

Gold started last week stable at $2,740 but fell 3.5% post-election before recovering 64% of the decline. Silver saw similar drops from $32.5 to $30.9, rebounding near $31.6. Key factors include the Federal Reserve’s 25-point rate cut and China’s strong gold ETF buying, though local jewelry demand remains subdued. Gold remains technically pressured — a fall to $2,600 is possible short-term, but long-term tailwinds like geopolitical risk and official sector demand support gold. Silver’s medium-term outlook benefits from rising solar and industrial applications, particularly in Japan.

DAILY ECONOMIC CALENDAR (ET)

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