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APRIL 8, 2024

ABOVE $70,000

As the halving event draws near, Bitcoin has surged to a record high of over the $72,000. The halving event, which will be happening on April 20, will reduce mining transaction rewards by 50%. The current 6.25 BTC block reward will halve to 3.125 BTC. This even will slow the creation of new coins, and as proven historically, it will likely lead to an increase in Bitcoin’s value. As a result, traders are optimistic about a post-halving rally, which has also led to increased interest in Ordinals and BRC-20 tokens. These tokens allow for data to be embedded within the Bitcoin blockchain and enable the issuance of transferable tokens directly through the network, respectively. BRC-20 tokens increased by nearly 6% in 24 hours, with tokens like Multibit (MULTI) surging by 22%. Moreover, the high open interest in BTC futures suggests expectations of increased price volatility, which has pushed Bitcoin’s price further up.

BULLION BOOM

Despite challenges from a stronger U.S. dollar and high interest rates, gold prices have climbed to a record high for the seventh day in a row driven by strong demand from Asian central banks. Spot gold reached $2,338.80 per ounce, with U.S. gold futures also rising to $2,358.40, reflecting optimism among gold bulls. Furthermore, the people’s Bank of China continued its gold-buying streak for the 17th consecutive month in March, holding 72.74 million ounces. This trend, alongside similar actions by the Reserve Bank of India, has contributed to the surge in gold prices. Moreover, it is worth noting that despite obstacles from strong U.S. economic data, gold has seen a 13% increase this year, prompting predictions of further increases. Additionally, silver, platinum, and palladium prices also saw gains during this period.

RETREAT BUT STILL OPTIMISTIC

Oil prices experienced a downturn following Israel’s announcement of troop reductions in Gaza, leading Brent futures to drop by 2.6% to approximately $90 a barrel after reaching a five-month peak. However, despite this retreat, it is important to highlight that projections regarding oil prices remain optimistic due to the ongoing Middle East tensions and disruptions in the oil supply chain. In addition, investor optimism remains robust, supported by strong timespreads, heightened volatility, and a preference for bullish oil call options, suggesting a favorable outlook for prices. Moreover, geopolitical uncertainties and supply disruptions, as demonstrated by the recent fire at a Mexican oil platform, continue to cast a shadow on the market.

INTERNATIONAL NEWS

Investors are currently betting heavily on the depreciation of the yen, with short positions at their highest level in 17 years. This surge in short bets is driven by the growing interest rate gap between the U.S. and Japan, leading to a widespread belief in the yen’s continued weakening, despite repeated warnings from Japanese officials about the risks and potential consequences of the currency’s decline.. The yen’s value is currently at a 34-year low, and efforts by the Bank of Japan (BOJ) to strengthen it have not been successful, and although Analysts suggest that interventions and statements from the BOJ may not be sufficient to reverse this trend. Moreover, the upcoming release of U.S. inflation data is expected to further intensify the selling pressure on the yen, as a delay in interest rate differential contraction propels the dollar-yen pair to multi-decade highs.

KEY EVENTS HAPPENING THIS WEEK

Monday: Speech from Chicago Fed President Austan Goolsbee.

Tuesday: NFIB optimism index report for March.

Wednesday: Consumer price index (CPI), wholesale inventories, and monthly U.S. federal budget reports for March, and Minutes of Fed’s March FOMC meeting.

Thursday: Producer price index report (PPI) March, initial jobless claims for week ending on April 6, and speeches from Fed Gov. Michelle Bowman, Boston Fed President Susan Collins, Chicago Fed President Austan Goolsbee, and Atlanta Fed President Raphael Bostic.

Friday: Import price index report for March, preliminary consumer sentiment report for April, and speeches from Atlanta Fed President Raphael Bostic, and San Francisco Fed President Mary Daly.

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