🚨 ECB to Stay Behind Fed?

Good Morning!

The tech world's holding its breath for Nvidia's earnings report today. This AI chip giant's value has skyrocketed from $390 billion to a jaw-dropping $3.2 trillion since ChatGPT's debut. Talk about a growth spurt! With expectations of doubled Q2 revenue, investors are on edge. Europe's markets are playing it cool, but options traders are bracing for a potential $300 billion swing in Nvidia's value. That's more than most S&P 500 companies are worth!

In today’s email:

• ECB: Eyes a slower path to easing than the Fed

• Bitcoin: Back below $59k for now

• RWA: Growth maybe slower but we’re getting there!

• Gold: Pushing up against key resistance level

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THE BIG IDEA

Gold's new high amid market optimism raises eyebrows, while euro rates steepen on heavy supply and looming ECB decisions

We're witnessing a peculiar paradox in the financial world. Picture this: risk assets are partying like it's 1999, rate cuts are the talk of the town, and yet, gold's quietly stealing the spotlight, hitting a dazzling $2,500 per troy ounce. Like finding a doomsday prepper at a rave - something doesn't quite add up.

Now, before you dismiss this golden rally as just another hedge against inflation or geopolitical jitters, there's a plot twist. Whispers in the market suggest China and Russia are beefing up their gold reserves while giving the cold shoulder to the greenback. It's like they're playing financial chess while the rest of us are still setting up the board.

Meanwhile, in the bond market, Tuesday's 2-year Treasury auction was hotter than a fresh batch of cryptocurrency. With a near 70% indirect bid, it seems central banks can't get enough of that short-term debt. It's as if they're betting on the Fed's rate-cutting spree with the enthusiasm of a bargain hunter on Black Friday.

Across the pond, European bonds are doing the steepening tango, with 30-year Bund yields leading the dance.

The culprit?

A tsunami of corporate, SSA, and government issuances flooding the market. It's a high-stakes game of financial Jenga, with each new bond threatening to topple the tower.

But hold your horses before you start mirroring every US market move. Friday's eurozone inflation and unemployment data might just be the splash of cold water needed to wake up from this rate-cut daydream. The ECB might be eyeing a slower path to easing than its American counterpart, reminding us all that in the world of central banking, it's not always monkey see, monkey do.

So, as we navigate this topsy-turvy financial landscape, remember: in a market where everything's up, something's gotta give. Keep your eyes peeled and your analysis sharp - the next plot twist could be just around the corner.

MARKETS AT A GLANCE

TOP NEWS

Nvidia's earnings report could significantly impact the entire market, with investors closely watching for signs of sustained AI chip demand

Nvidia's become the market's golden child, but it's not all smooth sailing. The AI chip titan's value has skyrocketed ninefold since 2022, but recent volatility has investors on edge. Wednesday's earnings report is the tech world's Super Bowl. Wall Street's expecting another quarter of triple-digit growth, but the real nail-biter is the forecast. Cloud giants are still throwing cash at AI, but for how long? Nvidia's pitching ROI stats to keep the hype train rolling. Meanwhile, whispers of delays in their next-gen Blackwell chips are adding extra spice. With Nvidia now dubbed "the most important stock in the world," this earnings call could make or break the market's mood.

BOJ's Himino reaffirms readiness to raise rates if economy stays on track, echoing Governor Ueda's stance

Bank of Japan's playing it cool but keeping its options open. Deputy Governor Himino's singing the same tune as the boss - they're ready to hike rates if inflation stays the course. But don't expect them to rush; they're watching the markets like hawks. July's surprise rate hike to a 15-year high sent the yen soaring and stocks tumbling, but Himino's not sweating it. He's betting Japanese firms can handle the heat. Looking ahead, the BOJ's crystal ball shows a "balanced state" on the horizon. Inflation on target and growth cruising above average? Sounds like a central banker's dream.

Dollar nears year-low as markets anticipate Fed rate cuts; bitcoin drops below $60,000

The greenback's hovering near a 13-month low, with sterling flirting with multi-year highs. Markets are betting on Fed rate cuts, debating between 25 or 50 basis points. Bitcoin stole the spotlight, tumbling over 4%. Aussie dollar hit an eight-month peak, but inflation progress disappointed. All eyes on upcoming U.S. economic data for fresh clues.

CRYPTO

Analyst skeptical of $30T tokenized RWA prediction, suggests $1.3T by 2030 is more realistic

A crypto analyst challenges Wall Street's bullish $30T forecast for tokenized real-world assets by 2030, proposing a more conservative $1.3T. This lower estimate could still significantly impact Web3, creating a "flywheel effect" on NFTs, social platforms, and gaming. The analyst notes Ethereum's potential value capture is complicated by Layer-2 networks potentially taking 95-99% of revenue.

Bitcoin falls below $59K, Ether drops 10% in sudden crypto market downturn

Crypto markets took a nosedive late Tuesday, with Bitcoin plunging below $59,000 and Ether shedding nearly 10%. The sell-off triggered $313 million in liquidations, the largest since August 5. Other top cryptocurrencies also saw significant drops. The cause of the sudden downturn remains unclear, leaving traders scrambling to understand the market's abrupt shift.

MakerDAO rebrands as Sky, introduces USDS stablecoin and SKY governance token

MakerDAO's rebrand to Sky unveils USDS and SKY tokens, launching September 18. Part of the "Endgame Plan," it aims to simplify DeFi and boost accessibility. The shift introduces "Sky Stars" projects and upgrades existing tokens. However, tensions with Aave over recent governance decisions loom, highlighting broader DeFi ecosystem challenges.

TON blockchain's six-hour outage, triggered by an airdrop-induced network overload, rattled the crypto community and exchanges alike

The Open Network (TON) just took an unexpected nap, snoozing for over six hours with no transactions processed. This digital siesta wasn't planned - blame it on an airdrop party gone wild. The DOGS memecoin's generous giveaway sent the network into a tizzy, overloading validators faster than you can say "Who let the DOGS out?" Binance and Bybit hit the pause button on deposits and withdrawals, while TON's team scrambled to wake up their sleepy blockchain. The plot thickens with Telegram founder Pavel Durov's recent run-in with French authorities, adding a dash of drama. Despite the turbulence, Toncoin's only down 2.14%. Talk about a ruff day in crypto land!

GOLD

Precious metals are poised for potential breakouts, with gold, silver, and platinum all testing key resistance levels

Shiny stuff alert! Gold, silver, and platinum are playing a high-stakes game of chicken with their resistance levels. Gold's flirting with the $2,520-$2,530 mark, while silver's trying to charm its way past $30 per ounce. Platinum's caught in a tug-of-war between $935-$940 and $975-$985. The precious metals are coiled like springs, just waiting for that perfect catalyst to send them soaring. Keep your eyes peeled - this metallic dance could get interesting!

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