👀 PMI Data Today: Bitcoin Stalled, Oil Options Frenzy?

Good Morning!

Fresh PMI readings show the Eurozone still stuck in contraction mode – a headache the ECB can't ignore. While Lagarde's playing it cool on rate cuts, behind-the-scenes chatter suggests we might need to go below neutral to jumpstart things. The euro's feeling the pain, down 3%+ this month – its worst showing since April 2022. Meanwhile, the U.S. and UK are expected to show more resilience in their PMIs. The IMF's betting on American muscle to carry global growth through 2025, which explains why traders are piling into the dollar. Add potential Trump-related trade tensions into the mix, and you've got the yuan looking nervous.

In today’s email:

• PMI: All eyes on PMI figures today

• Bitcoin: Still struggling to break $67k decisively

• Oil: Traders set records in options trading

• Gold: Chinese demand slowing as reflected in Shanghai premium

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THE BIG IDEA

America's economic resilience is paradoxically becoming a global headache, as its strength forces interest rates higher worldwide and deepens the divide between U.S. and international markets

Here's something that'll make you scratch your head: The U.S. economy is crushing it so hard, it's actually becoming a problem for everyone else. Think about it – while America's economic engine is purring like a well-oiled machine, Europe and China are stuck in first gear. Today's fresh PMI data is expected to hammer this point home even further.

The numbers tell an interesting story. The U.S. composite PMI has been flexing near 12-month highs, showing remarkable consistency in growth. Meanwhile, the Eurozone's economy unexpectedly shrank last month (first time since February), and China's been essentially moving sideways since summer. This divergence is creating some fascinating market dynamics.

But here's where it gets really interesting

The strength of the American economy is forcing everyone to rethink Fed rate cut predictions for next year. As U.S. yields climb higher, they're dragging global rates up with them – a nasty surprise for international markets already struggling to find their footing. The Treasury yield curve is now at its steepest in over two years, sending ripples through global markets.

What's particularly intriguing is that this American boom isn't exactly sharing the wealth. U.S. consumers have shifted their spending habits dramatically – they're splurging on services rather than goods, keeping the benefits largely within American borders. The gap between services and goods spending is now at a 20-year high.

If today's PMI data shows America continuing to outperform expectations, we might see another market shake-up. The dollar could surge higher, yields could climb further, and global stocks might need to buckle up for a bumpy ride. It's a classic case of too much of a good thing – at least for the rest of the world.

MARKETS AT A GLANCE

TOP NEWS

The Eurozone's economy continues to show weakness with manufacturing decline and services sector barely growing, as latest PMI data reveals

The Eurozone's stuck in a sluggish patch, with October's PMI data showing the economy contracting for a second straight month at 49.7. While manufacturing's still in decline mode (though improving slightly to 45.9), services are barely keeping their head above water at 51.2. Most concerning? Business optimism just hit a 12-month low – not exactly the comeback story we were hoping for.

The yen hits a three-month low against the dollar, driven by persistent rate differentials and growing political uncertainties

The yen's taking a beating, sliding to three-month lows against the dollar at 153.18. While you might think the narrowing rate gap between the U.S. and Japan would help, the math still isn't in the yen's favor. With Japanese deposits earning a measly 0.03% versus the dollar's 4.76%, traders aren't exactly rushing to hold yen. Add in Trump comeback talks and upcoming elections, and you've got a recipe for more volatility ahead.

Oil traders set records in options trading volume as Middle East tensions and upcoming U.S. elections fuel market uncertainty

You know something's up when oil traders start breaking records in the options market. We're seeing an unprecedented 4 million Brent options contracts – that's 4 billion barrels worth of oil – as traders scramble to hedge against Middle East tensions. With Israel-Iran tensions simmering and the U.S. election potentially reshaping OPEC+ relations, everyone's buying insurance against price spikes.

CRYPTO

DRW's Don Wilson draws parallels between current SEC crypto crackdown and his past victory against a Gensler-led CFTC, suggesting regulatory vagueness might be intentional

Fresh off getting sued by the SEC, trading veteran Don Wilson isn't backing down. He's calling out what he sees as the SEC's purposefully vague crypto guidance, comparing it to his 2018 victory against Gensler's CFTC. Despite spending millions on compliance, Wilson says the SEC's "come in and register" mantra rings hollow when there's no clear path to do so.

Michael Saylor walks back controversial self-custody comments after fierce industry backlash from crypto leaders

MicroStrategy's Michael Saylor just did a 180° on self-custody, declaring it "a right for all" after catching heat from crypto's heavyweights. Vitalik Buterin called his original take "insane," while Casa's Jameson Lopp warned about centralizing Bitcoin with third-party custodians. Talk about a quick attitude adjustment when the crypto community speaks up.

Ripple CEO Brad Garlinghouse predicts a crypto "reset" post-election, regardless of the winner, amid criticism of Biden’s policies

Speaking at DC Fintech Week, Garlinghouse expressed hope for progress after the U.S. election, criticizing the Biden administration as "hostile" toward crypto. While Kamala Harris supports tech innovation, Trump positions himself as "the crypto president." With pro-crypto funding ramping up, Garlinghouse backs candidates opposing regulatory crackdowns, highlighting ongoing legal battles, including Ripple’s case against the SEC over XRP's classification as a security.

Ethereum's upcoming "Verge" upgrade promises revolutionary accessibility by enabling node operations on mobile devices through stateless verification

Vitalik Buterin just dropped a game-changer: Ethereum's next upgrade could let you run a node from your phone or smartwatch. The "Verge" upgrade introduces stateless verification, slashing hardware requirements from hundreds of gigabytes to something your pocket device can handle. While initially banking on Verkle trees, they're exploring quantum-resistant STARK alternatives for long-term security.

GOLD

China’s gold premium swung from record highs to negative, driven by demand shifts and supply restrictions

The Shanghai gold premium surged from $40 to $121.2 per ounce by September 2023, fueled by high demand and import restrictions aimed at defending the Yuan. As import limits eased, the premium fell sharply, reaching -$10 by late 2024. Slowing Chinese demand and fluctuating withdrawals from the Shanghai Gold Exchange contributed to the decline, while global gold prices stayed resilient amid geopolitical risks and lower interest rates.

DAILY ECONOMIC CALENDAR (ET)

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