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It’s been a turbulent day so far.
Bitcoin hit a new record high of $109,888 this afternoon.
Note yields reached 5.1% in 2020 after sales today showed weaker demand than expected. In 30 years, it also rose 11 basis points, exceeding 5% yield. The 10-year yield rose to 4.6%.
The auction results come a few days after Moody’s was downgraded from last week’s Triple A rating to AA1. Given this week’s relatively quiet economic calendar, it’s not surprising that US stocks have moved that much at auction today.
The S&P 500 slides 1.2% at around 1.2% in auction results, but Nasdaq composites fell 1.4%, eliminating profits early in the session.
Bitcoin pulled back slightly after approaching $110,000, but rose by about 1% in 24 hours of 24 hours of ET.
But what’s surprising is seeing Bitcoin (which has been traded consistently like a risky asset this year) despite rising bond yields. Treasury sales usually coincide with risk-off sentiment. And today, the BTC was replaced like a safe haven.
Before I get too excited, Noelle Acheson, author Cryptography is now a macro Note that newsletter, this is called “decoupling.” I have to agree.
“We’re probably seeing the building of concerns about Japan-caused bond market ‘events’,” she writes today. “Government debt yields for 30 and 40 years have skyrocketed over the past few days and are now at record highs.”
Japan’s 30-year bond yields reached a new high of 3.2% during Asian trading on Wednesday, according to data from the London Stock Exchange. Japan’s 20-year auction on Tuesday showed the weakest demand for offering for more than a decade.
The bond move means that the Japanese yen is gaining strength against the dollar, said Dan Tapiero, founder of 10T Holdings. It could explain the Bitcoin rally.
However, it is difficult to say how long this trend will last.
Like I said, there isn’t much macro data to trade this week, but risk assets still face headwinds. In the ongoing trade war, analysts are pulling S&P 500 revenue expectations back to the rest of the year. Furthermore, tariffs could still hurt the labor market and second quarter GDP. So far, the Fed has not been holding back interest rates.
In points about revenue forecasts, we acknowledge that estimates typically estimate that it will decline later in the year. However, this time the slash is quite important. Since the start of the second quarter, analysts have reduced the S&P 500’s forecast revenue growth from 8.9% to 4.8%. Fact Set The data will be displayed.
The first unemployment claim of tomorrow will provide the next labor market update. The first filer for the week that ended May 17th is expected to be 230,000. This has been a slight increase since the previous week.
Of course, if BTC is not traded like a risky asset, Hoddlers don’t have to worry about these potential headwinds.
