The information in this message does not represent any financial or investment advice. They're just random thoughts in my head.
gm
MACRO - We had another grim close to macro last week with SPX and NDQ both closing 1.5-1.7% lower which takes them to new YTD lows. Futures are opening mostly unchanged to start the day which I think is a bit of a win given the weekend sentiment, although it remains to be seen what will happen at the US equity open. Oil is back at $82 after headlines of OPEC+ considering a cut in production to sustain oil prices; any such cut would be the first time since the outburst of the COVID pandemic in March 2020. On the plus side we've seen US treasuries rally this morning putting the curve to 420/403/378/374bps in 2s/5s/10s/30s. A lot of headlines over the weekend about Credit Suisse going under because of the decline of its stock price. There are a lot of comparisons to Lehman Brothers and I'm seeing people quote CDS prices on NFT Twitter and claiming it's "end of days" type stuff. As someone who spent 10 years working in an investment bank trading CDS, I can tell you that most of what you read on Twitter over the weekend is total bollocks, and it's quite clear to me that the vast majority of people who are quoting CDS "prices" probably don't even understand what the levels they are talking about even means. Let me give you a clue, if CS was close to defaulting, CDS wouldn't be trading at 250bps and it certainly wouldn't be quoted in spread. If you're interest to read real news I'd suggest reading this article" https://www.ft.com/content/6104a699-fa7f-4a81-9c35-a9a2f8ff92d2. Elsewhere, this week is important in that we have non-farm payrolls on Friday, for which it looks like consensus is 250k. It's been somewhat less of an anticipated number this year with CPI garnering more attention, however, the recent "beats" have given the fed a licence to raise rates aggressively and telegraph a hawkish outlook. Consequently, if we saw this number coming below expectations (noting that the 250k consensus number is already lower than last month's 315k), there may be an angle or some pressure on the Fed to be less aggressive. If the number once again beats, then I'd be concerned of a big rate selloff and following equity selloff. It's safe to say bad is good and good is bad this Friday for payrolls.
CRYPTO - After having a remarkably strong week we saw a soft weekend which now sees BTC hovering around 19K and ETH just below 1300. We've seen alts drift lower too, notably $APE coin dipping sub $5 for the first time in a while. Part of me feels the rumours around Credit Suisse and other weekend headlines are to blame for that move as retail investors took speculative positions. With futures opening unchanged, it makes you wonder if we see that bid return as I bet there is a heavy short base across the crypto landscape now. For me prices are in no man's land right now, I don't think 2022 is the year for selling risk or positions, but I feel I'd want to be much closer to YTD lows in order to add risk and buy more here; so the frustrating rangeboundedness means trying my best to sit on my hands for me.
NFTs - We continue to see some very bullish datapoints in NFT space. We saw another huge punk sale, a Zombie for 980ETH, and a 777ETH trippy BAYC sale too. That, coupled with the strong price action in RENGA has shown how "alive" NFTs continue to be even in the depths of the bear market. We often see mega sales precede sustained rallies in NFTs. I would be advocating for that had the macro situation not been so dire. Just feels like a global risk-off sentiment makes it tough, but you never know, NFTs are a hybrid product and have their own mind often. Let's see what happens this week.
GL everyone.
-OSF
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