Strong storms rattled markets last week as investors were still breaking down the repetitive hawkish comments by the Fed. The Bank of England also moved world markets Wednesday as it intervened in buying government debt in steps to stabilize its economy after tax reductions were announced. Worry that uncertainty would spread to pension funds then prompted immediate action. Inflation remains rampant not only in the UK, but throughout Europe, in what seems like a never-ending battle. The British Pound finished higher for the week close to 1.11 after seeing a historical low near 1.04 the week prior and before BoE action last week. The Euro currency remained below parity still, holding the 98 cent level.
The S&P 500 reached year to date lows below 3600 as the index finished down just lower than 5% for the third quarter, and down about 25% for the year. Volatility in interest rates remained active as the yield curve dipped lower in the body of the curve 20 bp and more. After reaching a year to date high, close to 4%, the 10 year treasury retreated back to safety below 3.7% by Friday. Fed fund action currently pricing in another 75 bp hike at the next meeting early November, then another hike to the 4.25-4.5% terminal rate level for the entire 2023 year.
Labor markets will take the spotlight this week with the monthly unemployment rate released Friday, in addition to non-farm payrolls. Unemployment is currently surveyed to remain unchanged, with non-farm payrolls declining to 265k from 315k. Initial jobless claims remain at historical lows with University of Michigan consumer sentiment improving slightly, but still holding at historical lows as well. Investors look ahead to the last quarter of the year, hopeful more transparency and priced in expectations will motivate markets higher looking ahead to a brighter 2023.
Bitcoin continues to hold strong in the face of troublesome concerns in the forex and bond markets, fueled by a strengthening US dollar and questionable domestic policies. Unlike arbitrary monetary policies of nation states, Bitcoin is programmed with a strict monetary policy, confirming transactions roughly every 10 minutes with a 50% decline in issuance roughly every four years. Bitcoin’s Proof-of-Work hash rate also reached another new all-time high this week, a signal suggesting miners continue to build out previously planned and paid for infrastructure, are able to source cheap electricity, and remain confident in the longer term prospects of profitability. Technicals for Bitcoin remain suggestive of a potential mean reversion attempt throughout the quarter, so long as the current lows continue to hold.
Ethereum’s Proof-of-Stake consensus mechanism also continues to see growth, with 84,300 validators representing 14.1 million ETH being staked. Any related staked ETH and associated staking rewards will remain locked in the protocol until the code to unlock them is written and added to the protocol, which carries an estimated development time of six to 12 months. Although the network issuance can tip into deflationary territory thanks to a transaction fee burning mechanism, muted on-chain activity over the past few months has kept token burning and issuance mainly at par. Technicals for Ethereum suggest a non-specific consolidation and accumulation process with an attempt for higher highs throughout the quarter.
Over the past week, traditional finance players continue to show interest in the new world of Decentralized Finance. France’s central bank announced exploration of the benefits for a central bank digital currency (CBDC). Banque de France’s Governor stated, “a wholesale CBDC could significantly contribute to improving cross-border and cross-country payments” and also mentioned the potential for improved CBDC liquidity management via DeFi, using automated market makers. The governor also pointed to the development of “Project Jura” who recently completed a CBDC pilot by the French and Swiss central banks in collaboration with the Bank of International Settlements Innovation Hub. France’s efforts reflect the work of the ECB, who currently are carrying out a public inquiry to determine the feasibility of digitizing the euro which experts expect could launch in 2026.
SWIFT, the interbank messaging system for cross border payments, announced a proof of concept project with Chainlink, a protocol that connects off-chain data sources to on-chain smart contracts. SWIFT’s Strategic Director, Jonathan Ehrenfeld Sole, pointed to increased demand from institutional investors for digital asset data and instruments. Chainlink can also help with interoperability and ease of access, a common concern for investors in traditional finance.
Finally, Telefonica, a multinational telecom company based in Madrid Spain, enabled payments with cryptocurrencies like BTC, ETH, and USDC. These efforts are in addition to their partnership with Qualcomm Technologies to advance its “extended reality” ecosystem and bring the metaverse to life. The firm has also built and released its own NFT marketplace integrated with Metamask.
|__hssrc||session||This cookie is set by Hubspot whenever it changes the session cookie. The __hssrc cookie set to 1 indicates that the user has restarted the browser, and if the cookie does not exist, it is assumed to be a new session.|
|AWSELB||session||Associated with Amazon Web Services and created by Elastic Load Balancing, AWSELB cookie is used to manage sticky sessions across production servers.|
|cookielawinfo-checkbox-advertisement||1 year||Set by the GDPR Cookie Consent plugin, this cookie is used to record the user consent for the cookies in the "Advertisement" category .|
|cookielawinfo-checkbox-analytics||11 months||This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".|
|cookielawinfo-checkbox-functional||11 months||The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".|
|cookielawinfo-checkbox-necessary||11 months||This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".|
|cookielawinfo-checkbox-others||11 months||This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.|
|cookielawinfo-checkbox-performance||11 months||This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".|
|CookieLawInfoConsent||1 year||Records the default button state of the corresponding category & the status of CCPA. It works only in coordination with the primary cookie.|
|__cf_bm||30 minutes||This cookie, set by Cloudflare, is used to support Cloudflare Bot Management.|
|__hssc||30 minutes||HubSpot sets this cookie to keep track of sessions and to determine if HubSpot should increment the session number and timestamps in the __hstc cookie.|
|bcookie||2 years||LinkedIn sets this cookie from LinkedIn share buttons and ad tags to recognize browser ID.|
|bscookie||2 years||LinkedIn sets this cookie to store performed actions on the website.|
|lang||session||LinkedIn sets this cookie to remember a user's language setting.|
|lidc||1 day||LinkedIn sets the lidc cookie to facilitate data center selection.|
|UserMatchHistory||1 month||LinkedIn sets this cookie for LinkedIn Ads ID syncing.|
|AWSELBCORS||5 minutes||This cookie is used by Elastic Load Balancing from Amazon Web Services to effectively balance load on the servers.|
|__hstc||5 months 27 days||This is the main cookie set by Hubspot, for tracking visitors. It contains the domain, initial timestamp (first visit), last timestamp (last visit), current timestamp (this visit), and session number (increments for each subsequent session).|
|_ga||2 years||The _ga cookie, installed by Google Analytics, calculates visitor, session and campaign data and also keeps track of site usage for the site's analytics report. The cookie stores information anonymously and assigns a randomly generated number to recognize unique visitors.|
|_ga_HB5P757H6F||2 years||This cookie is installed by Google Analytics.|
|_gat_gtag_UA_202302885_1||1 minute||Set by Google to distinguish users.|
|_gid||1 day||Installed by Google Analytics, _gid cookie stores information on how visitors use a website, while also creating an analytics report of the website's performance. Some of the data that are collected include the number of visitors, their source, and the pages they visit anonymously.|
|at-rand||never||AddThis sets this cookie to track page visits, sources of traffic and share counts.|
|CONSENT||2 years||YouTube sets this cookie via embedded youtube-videos and registers anonymous statistical data.|
|hubspotutk||5 months 27 days||HubSpot sets this cookie to keep track of the visitors to the website. This cookie is passed to HubSpot on form submission and used when deduplicating contacts.|
|undefined||never||Wistia sets this cookie to collect data on visitor interaction with the website's video-content, to make the website's video-content more relevant for the visitor.|
|uvc||1 year 1 month||Set by addthis.com to determine the usage of addthis.com service.|
|_fbp||3 months||This cookie is set by Facebook to display advertisements when either on Facebook or on a digital platform powered by Facebook advertising, after visiting the website.|
|fr||3 months||Facebook sets this cookie to show relevant advertisements to users by tracking user behaviour across the web, on sites that have Facebook pixel or Facebook social plugin.|
|loc||1 year 1 month||AddThis sets this geolocation cookie to help understand the location of users who share the information.|
|VISITOR_INFO1_LIVE||5 months 27 days||A cookie set by YouTube to measure bandwidth that determines whether the user gets the new or old player interface.|
|YSC||session||YSC cookie is set by Youtube and is used to track the views of embedded videos on Youtube pages.|
|yt-remote-connected-devices||never||YouTube sets this cookie to store the video preferences of the user using embedded YouTube video.|
|yt-remote-device-id||never||YouTube sets this cookie to store the video preferences of the user using embedded YouTube video.|
|yt.innertube::nextId||never||This cookie, set by YouTube, registers a unique ID to store data on what videos from YouTube the user has seen.|
|yt.innertube::requests||never||This cookie, set by YouTube, registers a unique ID to store data on what videos from YouTube the user has seen.|
|AnalyticsSyncHistory||1 month||No description|
|li_gc||2 years||No description|
|loglevel||never||No description available.|
|pum-1717||1 month||No description|