April 28th, 2025

Market wrap: A week of cautious optimism amid shifting global sentiments

The past week in global financial markets has been a fascinating blend of cautious optimism, policy-driven volatility, and renewed enthusiasm in certain asset classes. President Donald Trump and Treasury Secretary Scott Bessent’s more conciliatory tone in recent days has played a significant role in easing market tensions, particularly surrounding the US-China trade war. This shift in rhetoric has helped improve global risk sentiment, allowing equity markets to notch gains and safe-haven assets like gold to retreat.

Meanwhile, economic data, such as the University of Michigan Consumer Sentiment survey for April, paints a more complex picture, with rising inflation expectations signalling potential challenges ahead. The cryptocurrency market, particularly Bitcoin, has also captured attention, with a sharp rebound and record-breaking inflows into Bitcoin exchange-traded funds (ETFs).

As we look forward to a data-heavy week and the Federal Open Market Committee (FOMC) meeting on May 7, 2025, markets are poised for potential volatility, driven by earnings reports, economic indicators, and evolving geopolitical dynamics.

A softer tone from Washington sparks market relief

The improvement in global risk sentiment can be largely attributed to a de-escalation in US-China trade tensions. President Trump’s remarks that tariffs on China would be reduced “substantially”, though “not to zero,” coupled with Treasury Secretary Scott Bessent’s assertion that high tariffs are unsustainable, have provided markets with much-needed reassurance.

Bessent’s comments at a private investor summit hosted by JPMorgan Chase, where he described negotiations with Beijing as a “slog” but emphasised a desire for a “big, beautiful rebalancing” of trade, have fuelled hopes of a less confrontational approach.

This softer rhetoric marks a departure from earlier threats of 125 per cent tariffs on Chinese goods, which had triggered significant market sell-offs and wiped nearly US$19 trillion off global equity markets since February. The suggestion that Beijing is considering exempting some US imports from its retaliatory tariffs further bolstered investor confidence, contributing to a relief rally across global equities.

On Friday, major US equity indices reflected this improved sentiment. The S&P 500 gained 0.74 per cent, the Nasdaq climbed 1.26 per cent, and the Dow eked out a modest 0.05 per cent increase. The MSCI Asia ex-Japan index also ended the day up by 0.4 per cent, signalling a broader recovery in risk appetite.

Asian markets continued this trend into Monday morning, with indices trading higher, though US equity futures suggested a softer opening, hinting at potential consolidation after last week’s gains. The market’s reaction underscores the sensitivity to policy signals from the Trump administration, particularly as investors grapple with the uncertainty of on-again, off-again tariff threats.

Consumer sentiment and inflation fears cast a shadow

While markets have responded positively to the prospect of easing trade tensions, economic data reveals underlying concerns. The final University of Michigan Consumer Sentiment survey for April showed a slight improvement, rising to 52.2 from a preliminary reading of 50.8.

However, this figure remains near historic lows, reflecting deep-seated pessimism among American consumers. The survey highlighted a sharp deterioration in inflation expectations, with one-year inflation forecasts jumping to 6.5 per cent—the highest since 1981—from 5.0 per cent in March. This surge in inflation fears is largely tied to President Trump’s tariff policies, which consumers and economists alike worry could drive up prices and erode purchasing power.

The University of Michigan survey noted that the decline in sentiment was “pervasive and unanimous” across age, income, education, geographic region, and political affiliation, underscoring the widespread unease. Consumers cited “frequent gyrations in economic policies” as a key factor, making it difficult to plan for the future. This sentiment echoes broader business surveys, which have flagged uncertainty as a major hurdle for investment and growth.

The rise in inflation expectations poses a particular challenge for the Federal Reserve, which has already cut rates by 100 basis points since September 2024, bringing the benchmark rate to a range of 4.25 per cent–4.50 per cent. With the FOMC meeting scheduled for May 7, 2025, and Fed officials entering their communications blackout period, markets are bracing for clues on how the central bank will navigate this delicate balance between growth and inflation.

Bond yields and currency markets reflect cautious stability

The bond and currency markets have also reacted to the shifting landscape. Yields on US Treasuries eased on Friday, with the 10-year yield falling 5 basis points to 4.25 per cent and the 2-year yield dropping 3 basis points to 3.76 per cent. This decline suggests a reduction in investor fears about the inflationary impact of tariffs, as well as a partial unwind of earlier concerns about the creditworthiness of US debt.

Citadel’s Kenneth Griffin recently warned that the Trump administration’s policies could undermine confidence in US Treasuries, a sentiment that had driven yields higher earlier in the month. The recent pullback in yields indicates that markets are, for now, taking the administration’s softer tone at face value.

The US Dollar Index (DXY) remained largely unchanged at 99.47, reflecting a stabilisation after earlier volatility. The dollar had surged earlier in the week as risk sentiment improved, but safe-haven currencies like the euro, Swiss franc, and Japanese yen weakened slightly.

Gold prices, which had hit record highs above US$3,500 per ounce amid trade war fears, fell two per cent on Friday to around US$3,343 per ounce, as reduced demand for safe-haven assets and potential profit-taking weighed on the precious metal. These movements highlight the market’s attempt to find equilibrium amid competing forces of optimism and caution.

Bitcoin’s resurgence steals the spotlight

While traditional markets grappled with trade and inflation concerns, the cryptocurrency market has been electrified by Bitcoin’s rebound above US$90,000, reaching a 24-hour high of US$94,535. This 12.48 per cent surge in just three days has reignited enthusiasm among investors, with Bitcoin ETFs playing a pivotal role in driving the rally.

BlackRock’s IBIT and Fidelity’s FBTC have seen combined inflows of over US$2.3 billion in the past two weeks, with IBIT now holding more than 280,000 BTC and FBTC posting its strongest weekly inflows since its January 2025 launch. Total Bitcoin ETF assets under management have surpassed US$70 billion, underscoring the growing institutional adoption of cryptocurrencies.

The surge in Bitcoin ETF inflows has absorbed newly mined supply at an unprecedented rate, fuelling speculation of a major price breakout in the coming months. Bitcoin open interest has also jumped 20 per cent over the past 20 days, reachingAscend to US$26 billion, signalling aggressive positioning by traders.

However, this leverage-driven rally carries risks, as high leverage can amplify both gains and losses. Analysts warn that while sentiment is bullish, the market remains vulnerable to volatility, particularly if macroeconomic conditions shift or regulatory developments, such as the SEC’s approval of ProShares’ XRP futures ETFs on April 30, 2025, introduce new dynamics.

Grayscale’s push for SEC approval of Ethereum ETF staking adds another layer of intrigue to the crypto landscape. The firm argues that staking could unlock US$61 million in rewards, strengthen Ethereum’s network, and enhance US competitiveness in the global crypto market. These developments highlight the growing mainstream acceptance of digital assets, even as regulatory hurdles persist.

Looking ahead: A data-heavy week and earnings season

The week ahead promises to be pivotal for markets, with a packed US economic calendar and earnings reports from 41 per cent of S&P 500 market cap. Key data releases, including employment figures, retail sales, and industrial production, will provide critical insights into the health of the US economy amid tariff uncertainty.

The FOMC’s May 7 meeting looms large, with markets anticipating that the Fed will hold rates steady but scrutinising any hints about future policy in light of rising inflation expectations. Corporate earnings, particularly from tech giants like Alphabet, will also shape market sentiment, with 73 per cent of S&P 500 companies reporting first-quarter results beating consensus expectations so far.

In conclusion, the past week has been a microcosm of the broader market environment: a delicate dance between optimism and uncertainty. President Trump and Treasury Secretary Bessent’s softer tone has provided a reprieve, but consumer sentiment and inflation fears remind us of the challenges ahead.

Bitcoin’s resurgence and the crypto market’s institutional embrace add a layer of excitement, but leverage risks loom. As we navigate a data-heavy week and the FOMC’s next moves, investors must remain vigilant, balancing hope with the reality of a complex and evolving global landscape.

Source: https://e27.co/market-wrap-a-week-of-cautious-optimism-amid-shifting-global-sentiments-20250428/

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

April 25th, 2025

Nikkei soars, gold shines, and Bitcoin reserves drop: What’s driving global markets?

Reports of progress in trade negotiations, coupled with dovish signals from Federal Reserve officials, have bolstered risk sentiment, sending equity markets higher and tempering yields on US Treasuries. At the same time, the cryptocurrency market, particularly Bitcoin, is experiencing a transformative moment as institutional adoption accelerates and exchange reserves dwindle to historic lows.

Observing these developments, I see a world at a crossroads—where traditional finance is grappling with geopolitical and monetary uncertainties, while the digital asset space is carving out a new paradigm of value storage and investment. This market wrap dives into these dynamics, offering my perspective on what they mean for investors, policymakers, and the broader global economy.

Let’s start with the equity markets, which a wave of positive sentiment has buoyed. The MSCI US index climbed 2.0 per cent, with the Information Technology sector leading the charge at a robust 3.5 per cent gain. Alphabet Inc., Google’s parent company, was a standout performer, surging 4.9 per cent in late trading after reporting earnings that surpassed analyst expectations.

This tech-driven rally underscores the sector’s resilience, even as macroeconomic uncertainties linger. Across the Pacific, Asian markets followed suit, with Japan’s Nikkei 225 jumping as much as 1.8 per cent. The yen’s decline, spurred by encouraging comments from US-Japan trade talks, added fuel to the rally. These gains reflect a broader market belief that trade tensions, particularly between the US and China, may be easing, though the picture is far from clear.

On the trade front, the narrative is mixed. President Trump’s assertion that his administration is engaged in talks with China has injected optimism into markets. However, Beijing’s denial of such negotiations and its demand for the revocation of unilateral US tariffs paint a more complex picture. This push-and-pull dynamic is emblematic of the broader US-China relationship, where rhetoric and reality often diverge.

The market’s reaction—evident in rising equity indices and a slight uptick in Brent crude prices (+0.7 per cent)—suggests that investors are betting on a de-escalation, even if only incremental. Yet, the risk of missteps remains high. A failure to bridge the gap between Washington and Beijing could reignite volatility, particularly in sectors like technology and energy that are sensitive to trade disruptions.

Monetary policy is another critical piece of the puzzle. Federal Reserve officials have signalled a willingness to cut interest rates sooner than previously anticipated, a move that has ripple effects across asset classes. US Treasury yields softened, with the 10-year yield dropping 6.6 basis points to 4.31 per cent and the 2-year yield falling 7.4 basis points to 3.80 per cent. This dovish tilt has weakened the US Dollar index by 0.5 per cent, while boosting gold prices (+1.9 per cent) above US$3,300 per ounce. Gold’s strength, underpinned by central bank buying and haven demand, reflects a market hedging against uncertainty.

As someone observing these trends, I believe the Fed’s openness to rate cuts signals a pragmatic response to slowing growth signals, but it also raises questions about the sustainability of the current economic expansion. Lower yields and a softer dollar could fuel further equity gains, but they also risk inflating asset bubbles in an already frothy market.

Amid this traditional financial backdrop, Bitcoin’s trajectory demands attention. The cryptocurrency has staged a remarkable recovery from a 30 per cent drop earlier this year, now trading steadily above US$93,000. What’s driving this resilience? A significant factor is the sharp decline in Bitcoin reserves on exchanges, which have fallen to 2.6 million BTC—the lowest level since November 2018. Since November 2024, exchanges have seen a net outflow of over 425,000 BTC, with public companies snapping up nearly 350,000 of those coins.

This trend, led by firms like Strategy, co-founded by Michael Saylor, is reshaping the Bitcoin market. Strategy alone has amassed 285,980 BTC since last November, with its latest purchase of 6,556 BTC announced in April 2025. Other players, such as Japan’s Metaplanet (holding 5,000 BTC with plans to double its stake) and Hong Kong’s HK Asia Holdings (raising US$8.35 million to bolster its reserves), are following suit.

This corporate accumulation is more than a footnote—it’s a paradigm shift. From my vantage point, it signals a growing acceptance of Bitcoin as a strategic asset, akin to gold or other stores of value. Companies are not just dabbling; they’re making calculated bets on Bitcoin’s long-term potential. The market impact is tangible: between April 19 and 23, 15,000 BTC left exchanges, coinciding with Bitcoin’s price breaching US$93,000.

This outflow suggests that investors, particularly institutions, are moving their holdings to cold storage for long-term investment rather than short-term trading. Such behavior is often interpreted as bullish, as it reduces the liquid supply available for selling pressure. Data from CryptoQuant reinforces this view, showing that long-term holders saw their realised market worth rise by US$26 billion in the first three weeks of April alone.

Institutional adoption is further evidenced by the surge in Bitcoin ETF inflows, with nearly US$1 billion pouring into US-based funds this week. ARK Invest’s bullish outlook, raising its 2030 Bitcoin price target to US$2.4 million, underscores the growing conviction that institutional money will drive the next leg of Bitcoin’s rally.

However, technical analysts caution that Bitcoin must hold above US$93,500 to maintain its upward momentum. A breach below this level could trigger a pullback, especially given the market’s sensitivity to macroeconomic shifts like Fed policy or trade developments.

Reflecting on these trends, I’m struck by the duality of the current market environment. On one hand, traditional markets are riding a wave of optimism fueled by trade hopes and dovish central bank signals. Equities are climbing, yields are softening, and gold is shining as a hedge. On the other hand, Bitcoin’s rise—driven by institutional adoption and shrinking exchange reserves—represents a parallel narrative of disruption.

I see Bitcoin’s ascent as a signal that the financial system is evolving. Corporations no longer view digital assets as speculative gambles but as strategic reserves, a hedge against inflation, and a bet on a decentralised future. Yet, risks abound. Bitcoin’s volatility, while tempered, remains a concern, and the broader market’s reliance on Fed policy and trade progress leaves it vulnerable to shocks.

Looking ahead, the interplay between these forces will shape the global economy. Risk assets like equities and oil could extend their gains if trade negotiations yield tangible progress. However, a breakdown in talks could send markets into a tailspin, boosting safe havens like gold and, potentially, Bitcoin.

The Fed’s next moves will be equally pivotal. Earlier rate cuts could sustain the equity rally but risk overheating markets, while a failure to act could choke off growth. For Bitcoin, the path seems clearer: institutional adoption is likely to continue, tightening supply and supporting prices. Yet, regulatory scrutiny, particularly in jurisdictions like the US and China, could pose headwinds.

In conclusion, the current market landscape is a tapestry of hope, uncertainty, and transformation. Traditional finance is navigating a delicate balance of trade and monetary policy, while Bitcoin is carving out a new role as a corporate treasury asset. I’m cautiously optimistic about the near-term outlook for risk assets but mindful of the fragility beneath the surface.

Bitcoin’s resilience, in particular, is a story of adaptation and conviction—one that may redefine how we think about value in the years to come. For now, investors would be wise to stay vigilant, balancing the allure of opportunity with the realities of risk.

Source: https://e27.co/nikkei-soars-gold-shines-and-bitcoin-reserves-drop-whats-driving-global-markets-20250425/

Anndy Lian

www.anndy.com

j j j

April 21st, 2025

Market wrap: A pivotal moment for gold, Bitcoin, and global markets

As financial markets navigated the Easter holiday weekend of April 21, 2025, a confluence of significant events underscored a transformative period for global investors. The synchronised surge of gold and Bitcoin to new highs, coupled with a weakening US dollar amid speculation about Federal Reserve Chairman Jerome Powell’s potential removal, painted a complex picture of risk sentiment, economic uncertainty, and evolving market dynamics.

Against the backdrop of recovering global optimism around US trade negotiations, the week’s market movements offered critical insights into the interplay of macroeconomic forces, technical signals, and geopolitical developments. I explore these events in depth, weaving together their implications for investors, traders, and policymakers, while offering a grounded perspective on the broader financial landscape.

The week ending April 18, 2025, saw global risk sentiment rebound, driven by optimism surrounding potential trade resolutions between the US and key partners like Japan, Mexico, and Canada. This optimism was reflected in Asian equity markets, with the MSCI Asia ex-Japan index posting a modest 0.16 per cent gain on Friday and a more robust 2.35 per cent weekly increase, snapping a three-week decline totalling 8.5 per cent.

Notable performers included Malaysia’s KL Composite (+1.09 per cent), Thailand’s SET (+0.85 per cent), South Korea’s KOSPI (+0.53 per cent), and Taiwan’s TAIEX (+0.29 per cent), while China’s CSI 300 remained nearly flat. These gains, achieved in thin holiday trading conditions, suggested cautious investor confidence amid ongoing trade talks. However, US equity markets, closed for Good Friday, ended the week on a weaker note.

The S&P 500 fell 1.5 per cent, the Dow Jones Industrial Average slumped 2.7per cent, and the Nasdaq Composite dropped 2.6 per cent, reflecting concerns over trade uncertainties and mixed corporate earnings expectations. Looking ahead, investors are poised to scrutinise earnings from heavyweights like Tesla and Alphabet, which could set the tone for market direction in the coming weeks.

The most striking development on April 21, 2025, was the synchronised rally in gold and Bitcoin, which underscored a growing narrative of distrust in the US dollar. Gold hit its 55th all-time high in the past 12 months, reaching US$3,382.43 per ounce at 8:00 PM EST, as reported by Bloomberg. This milestone, part of a relentless 15.3 per cent year-to-date gain, was fuelled by safe-haven demand, central bank purchases, and a weakening dollar.

Simultaneously, Bitcoin surged past US$87,000 at 8:15 PM EST, according to CoinMarketCap, driven by a combination of whale accumulation, dollar weakness, and speculation around US monetary policy shifts. The correlation between these assets, traditionally viewed as divergent, signals a profound shift in investor psychology.

Both gold and Bitcoin are increasingly seen as hedges against currency devaluation and economic instability, particularly in light of reports that President Donald Trump is seeking to remove Federal Reserve Chairman Jerome Powell. This political manoeuvre, amplified by Trump’s Truth Social posts declaring that “Powell’s termination cannot come fast enough,” has sparked fears of undermined Fed independence, a sentiment echoed by Chicago Fed President Austan Goolsbee, who warned of potential damage to the central_above bank’s credibility.

The trading implications of this event are multifaceted. The spike in gold and Bitcoin prices drove significant market activity, with XAU/USD trading volumes surging 20 per cent compared to the previous day at 8:30 PM EST, per Forex Factory data. Similarly, Bitcoin’s trading volume on exchanges like Binance rose 15 per cent by 8:45 PM EST, according to CoinGecko, reflecting robust investor interest.

For traders, this heightened volatility presents both opportunities and risks. Pairs trading strategies, which exploit price divergences between gold and Bitcoin, could gain traction as their correlation strengthens. Portfolio diversification into these assets may also appeal to investors seeking to hedge against a depreciating dollar, particularly as the US Dollar Index (DXY) fell 0.2 per cent to 99.23 on Friday.

However, the risk of overbought conditions looms. Gold’s Relative Strength Index (RSI) reached 72 at 9:00 PM EST, signalling strong momentum but nearing overbought territory, while Bitcoin’s RSI of 68 suggested continued upside potential, per TradingView. Bullish MACD crossovers for both assets further reinforced their upward trends, but traders must remain vigilant for potential pullbacks, especially if trade negotiations falter or central bank policies shift unexpectedly.

The Bitcoin market, in particular, is showing signs of structural strength. Blockchain analytics firm Santiment reported that Bitcoin whales, holding between 10 and 10,000 BTC, accumulated 53,600 BTC since March 22, 2025, increasing their control to 67.77 per cent of the circulating supply. This accumulation, occurring amid price volatility and market uncertainty, reflects deep confidence among large holders.

On-chain metrics from Glassnode further support this bullish outlook, with a 10 per cent increase in active Bitcoin addresses by 9:45 PM EST, indicating growing network activity. These developments suggest that Bitcoin’s rally is not merely speculative but underpinned by fundamental demand, potentially paving the way for further price appreciation if macroeconomic conditions remain favourable.

The weakening US dollar, a key driver of the gold and Bitcoin rallies, was exacerbated by reports of Trump’s push to oust Powell. National Economic Council Director Kevin Hassett’s comments on Friday, coupled with Trump’s social media rhetoric, triggered a sell-off in the dollar against major G-10 currencies.

Markus Thielen of 10x Research noted that Bitcoin’s surge to US$87,000 was directly tied to this dollar weakness and gold’s two per cent rally, with the perceived threat to Fed independence acting as a primary catalyst. Powell’s recent remarks, emphasising a data-dependent approach and warning of stagflation risks, have clashed with Trump’s calls for immediate rate cuts, creating a tense backdrop for monetary policy.

A potential trade deal with Japan, hinted at by market observers, could temper some of this uncertainty, but the specter of Fed interference remains a significant concern. A bond market crash, loss of confidence in the dollar as a reserve currency, and heightened stock market volatility could ensue if Powell’s removal is pursued through questionable means, as cautioned by X posts from several analysts.

In Europe, the European Central Bank’s (ECB) decision to cut interest rates by 25 basis points on Thursday, the seventh reduction since June 2024, reflected softening inflation and a deteriorating growth outlook amid trade uncertainties. The 10-year European yield fell 3.7 basis points to 2.469 per cent on Friday, signalling investor caution. This dovish stance contrasts with the US Federal Reserve’s current pause, highlighting divergent monetary policies that could further pressure the dollar.

In commodities, oil prices rose nearly five per cent last week, with Brent settling at US$68 per barrel on Thursday, driven by trade optimism and supply concerns. However, the closure of major markets in Canada, the UK, Europe, and Hong Kong for Easter Monday limited trading activity, with Asian equities opening mixed and US equity futures pointing to a lower open.

Looking ahead, the interplay of trade negotiations, central bank actions, and corporate earnings will shape market trajectories. The potential for a US-Japan trade deal could bolster equities, but unresolved tensions with China, which recently imposed 34 per cent tariffs on US goods, pose risks.

Gold and Bitcoin’s synchronised rally suggests a broader shift toward alternative stores of value, a trend that may intensify if dollar confidence erodes further. Investors should monitor macroeconomic indicators, such as US retail sales and inflation data, alongside Fed commentary for clues on policy direction.

Technically, both gold and Bitcoin remain bullish, but overbought signals warrant caution. For now, the financial markets stand at a crossroads, with the gold-Bitcoin surge and dollar dynamics signaling a pivotal moment for global economic stability. I see this as a call for prudent diversification, rigorous risk management, and a keen eye on the evolving geopolitical and monetary landscape.

Source: https://e27.co/market-wrap-a-pivotal-moment-for-gold-bitcoin-and-global-markets-20250421/