🚨 CPI Shock: Bitcoin Tremors, Stocks Rally

Good Morning!

The global stock market's hitting record highs! European futures are up 0.2%, riding the tech wave. All eyes are on today's US inflation report, which could be a game-changer for Fed rate cuts. The core CPI's expected to show the smallest back-to-back gains since August, potentially setting the stage for a September rate cut. Meanwhile, tech giants like TSMC, Nvidia, and Apple are fueling the rally in Asia and beyond.

In today’s email:

• US 🇺🇸 CPI: All eyes today on CPI data

• Bitcoin: Holding steady around $58k, for now

• S&P500: Hits a record high of 5600

• CFTC Chair: Chair Rostin Behnam reaffirms Bitcoin and Ethereum as commodities

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THE BIG IDEA

June's US inflation data is expected to support a Fed rate cut in September, with core CPI potentially showing the smallest two-month rise since August.

Brace yourselves for some potentially market-moving inflation data, folks! Thursday's CPI report could be the golden ticket to a Fed rate cut in September. We're looking at a possible 0.2% rise in core CPI for the second month straight - the tamest two-month stretch since last summer. If the forecasters are right, this could solidify expectations for the Fed to start unwinding its most aggressive tightening campaign since the early 1980s.

NYC rents might cool in June, impacting the CPI significantly. Used car prices, after rising 16.2%, face new pressures from a cyberattack. Auto insurance remains a major inflation driver, with expected rate hikes continuing the upward trend.

The broader implications?

If these numbers come in as expected, it could set the stage for the Fed to start cutting rates as early as September. That's music to the ears of investors who've been eagerly awaiting the end of this tightening cycle.

So, whether you're a market junkie or just trying to figure out why your wallet feels a bit lighter these days, Thursday's report is one to watch. It could be the first domino in a chain reaction leading to lower interest rates and a shift in the economic landscape. Stay tuned!

MARKETS AT A GLANCE

TOP NEWS

S&P 500 hits record high of 5,600 amid tech rally and Fed rate cut hopes.

The S&P 500 reached a historic 5,600 mark, fueled by tech giants like Nvidia and Apple. Fed Chair Powell's comments did little to dampen market optimism for rate cuts. Investors now eye Thursday's CPI data, with expectations of a "risk-on" reaction. The rally continues despite looming volatility warnings.

Central banks worry about 'weaponization' of forex reserves amid geopolitical tensions.

Central banks are increasingly concerned about the safety of their currency assets due to rising geopolitical risks. A UBS survey found that 33% of reserve managers view the 'weaponization' of FX reserves as a top risk, double last year's figure. Escalating global tensions could lead to sanctions or seizures of assets.

Wall Street titan Bill Hwang convicted in $36 billion fraud case.

Archegos founder Bill Hwang's high-stakes gamble just went bust. Found guilty of fraud and market manipulation, Hwang's $36 billion house of cards came crashing down, leaving Wall Street giants nursing a $10 billion hangover. Next stop? Potentially trading pin-stripes for prison stripes in October.

CRYPTO

CFTC Chair Rostin Behnam reaffirms Bitcoin and Ethereum as commodities, pushing for greater regulatory oversight.

As the crypto world turns, the CFTC's spinning a familiar tune. Chair Rostin Behnam's back at it, insisting Bitcoin and Ethereum are commodities and should fall under his agency's watchful eye. Citing a recent court ruling and a 2022 report, Behnam's making a case for the CFTC to step up its crypto game. He's not just talking the talk – he's laid out a five-point plan to whip the wild west of digital assets into shape.

BitMEX pleads guilty to violating the Bank Secrecy Act, facing potential fines and prison time for executives.

Looks like BitMEX's luck has finally run out. The crypto exchange just pleaded guilty to playing fast and loose with anti-money laundering rules from 2015 to 2020. Turns out, asking for an email address doesn't quite cut it when it comes to KYC. The DOJ's not mincing words, calling BitMEX a "vehicle for large-scale money laundering." With founders already on probation, this could mean more than a slap on the wrist.

CoinGecko survey reveals mixed sentiments in crypto market, with 49.3% bullish and 25% neutral.

Looks like the crypto crowd's caught in a game of "Bull, Bear, or Shrug." A recent CoinGecko survey shows just under half of us are feeling bullish about the market. Meanwhile, a quarter are playing it cool in neutral territory, waiting to see which way the crypto winds blow. Interestingly, the spectators are the most bearish – maybe they're just enjoying the show from the sidelines. With Bitcoin's recent dip and looming Mt. Gox repayments, it's no wonder we're seeing such a mixed bag of sentiments.

Ethereum price metrics suggest a potential rally above $3,400, with declining exchange supply and growing layer-2 activity as key indicators.

Looks like Ethereum's gearing up for a comeback tour! Despite a recent 18% dip, onchain and derivatives metrics are painting a bullish picture. The supply on exchanges is dropping faster than a hot potato, while layer-2 solutions are seeing more action than a blockbuster movie premiere. Even the options market is showing more love for calls than puts. With 40% of ETH supply locked up and layer-2 volumes skyrocketing, we might just see ETH break that $3,400 resistance.

Goldman Sachs plans to launch three new tokenization products, targeting institutional clients in the US and Europe.

Goldman's jumping on the tokenization train. They're cooking up three new products for later this year, focusing on the US and Europe. Word is, they're eyeing an RWA marketplace and diving into the "fund complex." Why? Client interest in crypto is skyrocketing. They're keeping it exclusive, though - financial institutions only, no retail investors allowed at this party. And don't expect any wild, permissionless blockchain shenanigans; they're playing it safe with permissioned systems.

GOLD

Gold holds gains as Fed Chair Powell's remarks boost rate-cut expectations, with prices above $2,370 an ounce.

Looks like gold's still got its Midas touch! The shiny stuff's holding onto its gains after Fed Chair Powell's Congressional testimony hinted at potential rate cuts. Traders are now betting on a September trim, with gold basking above $2,370. This year's been golden for the metal, up 15% thanks to central bank shopping sprees and geopolitical jitters. Keep an eye on today's inflation data - it could be the golden ticket to more gains.

CIBC raises gold price forecasts, predicting $2,600/oz by 2025, with a potential Trump presidency seen as more bullish for bullion.

CIBC's crystal ball is glittering with optimism. They've cranked up their gold price forecasts, eyeing a shiny $2,600/oz by 2025. The golden drivers? Central bank shopping sprees and retail investors seeking safe havens. But here's the kicker - a Trump comeback could turn this rally into a gold rush. Why? Think bigger deficits, higher tariffs, and a less independent Fed. Even Biden's not looking too shabby for gold, but Trump's policies could really make those bullion prices sparkle.

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