deen

10 Juni 2022

Market deep dive: The market remains choppy, slowly wading through looming sentiments

Fabio Ackeret

Fabio Ackeret

Sales Trader bei Crypto Finance (Brokerage) AG

Über den Autor

A choppy week comes to an end, but BTC$ and ETH$ are trading close to last week’s level at 30.1k and 1.8k, respectively.

On Thursday, China’s exports for May printed +16.9% (YoY), more than double of what analysts expected, while imports came in at +4.1% (YoY). This marks a continuation of the double digits yearly growth of exports before the Shanghai lockdown.

As cities in China are finally starting to open up again after month-long lockdowns, China’s largest port in Shanghai is nearing normal operations. On top of this, the US is considering removing some of the tariffs imposed on Chinese export to ease inflation pressure for US consumers. However, the recovery remains fragile. Today, some media reported new restrictions in Beijing.

The ECB left the deposit rate unchanged at -0.5%, but prepared the market for the first rate hike in a decade, which will be decided on at next month’s meeting. They will also end their asset buying programme on July 1st. Given the record high Eurozone inflation (at 8.1%), the ECB is still far more dovish than its peer overseas. It is to be expected that they are weighing the capability of southern Eurozone members to honour their debt higher than the protection against inflation of the people within the common currency block. Some might even argue that inflation is appreciated to lower the value of government debt.

The market is awaiting the FED’s interest rate decision and the Monetary Policy Statement scheduled for next Wednesday, and is looking for any indications during the FOMC press conference. The market is pricing in a 50bps rate hike with a small outside chance of a 75bps hike.

US inflation numbers for May will be released today in the afternoon and might give clues about the FED’s rate hike path.

The Ethereum merge on Ropsten was successful. This was the first out of three merges that need to be completed before the actual merge, and marks an important milestone on Ethereum’s path to transition from PoW to PoS.

In other news, PayPal announced that it would allow selected US users to transfer cryptocurrencies to external wallets for a fee (and within PayPal free of charge). As of Q1 22, PayPal has over 400m active users worldwide, and their plans to continue expanding their crypto offering is good news for the ongoing adoption of cryptocurrencies within traditional finance.

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