WEEK OF OCTOBER 23, 2023
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What’s Moving The Markets?
US vs China Chip Battle
The Biden administration imposed new rules, which restrict China’s access to US AI chips, also provide an opportunity for companies like Nvidia, Intel, and Advanced Micro Devices to maintain their business in China’s chip market by seeking input from the semiconductor industry on supplying AI chips for smaller systems.
Yuan Overtakes Euro
China is intensively promoting its native currency, the Chinese Yuan, in international transactions, with the Yuan surpassing the Euro to become the second most used currency in SWIFT transactions, while the Euro’s usage hits a three-year low and the Chinese Yuan reaches a five-month high.
BofA Profits In Q3
Bank of America, the second-largest bank in the country, reported a robust third-quarter performance, marked by a 10% increase in profits year-over-year, yet also revealed unrealized losses of $131.6 billion on its securities, following a $106 billion loss in the previous quarter.
Bitcoin Pump & Dump
False reports of an approved Bitcoin ETF by BlackRock on social media triggered a swift price surge from $27,900 to nearly $30,000 and subsequent retracement to $28,000, resulting in over $65 million in exchange liquidations as it became evident that the information was debunked.
Bitcoin ETFs Q1 2024
Analysts at JPMorgan predict that the SEC will likely approve multiple spot bitcoin ETFs before January 10, 2024, with several pending filings, including ARK Invest’s application
Binance Suspends USD Withdrawls
Binance.US has suspended direct USD withdrawals, requiring customers to convert their dollars to stablecoins or other digital assets for withdrawal, and no longer providing FDIC insurance for USD deposits, as part of changes in their terms of service amid ongoing regulatory scrutiny
Bear Case: Bears were able to hold price below 4398 pivot and are currently within Daily demand which has been tested. If bears are able to break price below 4160, not much support until psychological level of 4100 and 4057.
Bull Case: Price currently trading within Daily demand that has been tested already. Bulls will want to defend this area with 4398 as first major target. If price able to break above 4430, next major supply sits at 4491.25
EARNINGS RELEASE CALENDAR
FOR WEEK OF OCTOBER 23rd
Expert Insights & Predictions
Japan’s Negative Interest Rates: What Traders Need to Know
The era of Japan’s negative interest rates is winding down, and this move is set to shake global markets. According to a recent Bloomberg survey:
The Bank of Japan (BOJ) is expected to end its negative rates policy in the first half of 2024.
The biggest impact? US Treasuries. A rise in Japanese yields may lead Japanese investors to pull funds from US, European, and Australian debt.
The US dollar might also take a hit. Around 37% of survey respondents believe US Treasuries will be most affected, with 36% foreseeing a declining dollar.
Historically, the BOJ’s decisions have sent ripples through global markets. Any shift in policy will likely bring more volatility, especially for bond markets.
Despite being traditional safe havens, US Treasuries have shown increased volatility, a trend that may continue.
Bottom Line: With Japan’s likely shift away from negative interest rates, traders should brace for market fluctuations and keep a close eye on global bond yields and the US dollar’s movement.