Morning Wrap (20.10.2023)

• Asia-Pacific indexes are mostly losing for another day in a row after the session on Wall Street once again worsened market sentiment.

• The leaders of the declines are again the indexes from China, and are losing about 0.50% each. The index from Australia, the S&P/ASX 200, loses 0.40%. Meanwhile, Japan's Nikkei index is the only one gaining at +0.30%.

• Despite the decline, stocks in China saw some recovery after regulators injected a record amount of short-term liquidity into the country's financial system.

• Capital outflows to safe assets continue in the market. Gold gains 0.20%, the dollar also remains strong, while US Treasury bond yields lose 0.90%.

• Alongside the dollar, the euro also remains strong, but despite this, the EURUSD pair is trading down slightly, losing 0.05% to 1.0577.

• Increased tensions were noted after an American destroyer in the Red Sea intercepted drones and missiles aimed at Israel by Yemeni Houthi rebels. Oil prices surged to over $90 per barrel after drone attacks targeted US outposts in Iraq and Syria.

• Japan's Finance Minister Suzuki expressed concerns about rising global economic uncertainty, particularly in Japan, due to the Middle East conflict. Suzuki highlighted the worsening fiscal situation in Japan.

• Japanese CPI data: Overall Nationwide at 3% and Core CPI Nationwide YoY at 2.8%.

• PBoC set the Interest Rates as expected: 5 Yr at 4.2% and 1 Yr at 3.45%.

• EC President von der Leyen stated that 93% of Hamas' equipment originates from Iran. She emphasized the importance of increasing sanctions on Iran and addressing evasion.

• Cryptocurrencies remain strong in the face of growing uncertainties in global traditional markets. Bitcoin is gaining and is already trading above $29,000.

• Information has also emerged regarding long-term cryptocurrency investors. According to on-chain data, this group of investors is growing steadily and is already over 75%, which, combined with the halving in April 2024, could be a significant constraint on the supply side and therefore positively impacting the price.

Bitcoin is gaining significantly more than Ethereum and the rest of the altcoins. As a rule, this is what characterizes the first period of increases in the cycle. All the demand force is directed precisely at BTC, and only when it reaches a new ATH does it spill over into the altcoin market.