Thursday, Apr 13, 2023
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“If all the economists were laid end to end, they’d never reach a conclusion.” – George Bernard Shaw
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**The ETH rally.**It’s not Shapella, at least not directly – it’s more a liquidity and relief play. More on this below.US CPI shows stickiness. While there was good progress on the headline figure, the core index for March showed a higher increase than in February, not a great sign for monetary easing. More on this below.**BTC futures climb on stage.**It’s not just open interest that is back to where it was (in USD terms) before the Terra collapse last May. There is also a notable pick-up in new product proposals. Argentina’s National Securities Commissionhas approvedthe trading of BTC futures. This is in a country whose central bankhas prohibitedcommercial banks from offering crypto services. And several firmshave filed proposalsfor leveraged BTC futures ETFs, which would return double BTC’s performance. Speculative? Well, yes, of course.**Twitter crypto trading?**Twitter userswill soon be ableto trade shares and crypto assets via social trading platform eToro, according to an announcement on the latter’s Twitter account (of course). Details are still thin, but as Twitterreportedly hasover 500 million users, the impact – even if just in optics and mindshare – could be significant? Or it could lead to hype and disappointment – optics doesn’t necessarily lead to actual use. Worth keeping an eye on, though.
Yesterday’s US CPI print for March had something for everyone, and thus ended up delivering not very much at all.
Headline CPI grew by 5.0% year-on-year, the lowest increase since May 2021, less than the expected 5.2% and much less than February’s 6.0%. So, good news there, and the market initially liked it – bond yields dropped sharply and the S&P 500 soared on opening.
Core inflation, however, which removes the more volatile energy and food components, delivered an increase bang in line with expectations: a year-on-year jump of 5.6%, vs 5.5% in February. That’s not much of an increase, but nor is it a decrease, which the Fed desperately needs.
Taking the 3-month annualized core CPI increase (to capture and smooth more recent data), we get an increase of around 5.1%. Persistent, and still way too high.
(chart via Bloomberg)