Vol has bounced, but is still low

Daily Updates:

• US equity and bond markets picked up where they left off as markets opened yesterday following the Easter break. 
• Although trading volumes were lighter than usual according to Bloomberg, both the S&P 500 and Nasdaq-100 plunged by another 2%. That brings the S&P 500’s performance since the US election in November 2024 to -12%. 
• The positive correlation between US longer-tenor treasuries and US risk-on equities continued as the 10 year yield jumped 8bps, back above 4.4% and the yield on the 30-year maturity surged 11bps.
• As we have often seen, the selloff that has ricocheted across US markets coincided with a rally in alternative haven assets, notably gold, which is now trading above $3,400/ oz – another new ATH. That also comes alongside a further weakening in the US dollar, with the Bloomberg Dollar Index reaching a 15-month low. 
• The Japanese yen also extended its rally past 140 against the US dollar, the strongest it's been since September 2024.

• While US-risk on equities which BTC has been trading with closely since January 2024 continued to sell off, BTC is showing stronger signs of resilience. Currently changing hands at $88.4K, it is up 3% on the week, compared to the NDX which is down closer to 6%. However, as we have seen in the recent past, BTC may just be lagging behind US equities. 
• After reaching a local bottom for implied volatility all month, BTC options markets are now once again pricing in slightly higher volatility as ATM implied volatility for the 7-day tenor has jumped 10 points since its April 18 low, though is still at overall low levels. Longer tenors on the other hand have not moved significantly over the past week. 

• Front-end volatility for ETH has also followed BTC up, though its term structure is still much flatter relative to BTC and has not yet inverted. Other measures of sentiment still show an outsized bullish outlook for BTC than for ETH. The 25delta put-call skew ratio has jumped up for BTC as spot price rallied, with the 7-day skew touching its highest point all month. Comparatively, shorter-tenors for ETH have moved sideways. 
• Additionally, perp funding rates for ETH have hovered at negative to neutral levels, compared to BTC’s currently positive funding rate.

• The deepened selloff in US assets which is being coined the phrase ‘Sell America’ comes alongside further criticism from President Trump towards Chair Powell. Trump turned to Truth Social stating that “‘Preemptive Cuts in Interest Rates are being called for by many” and that “there is virtually No Inflation”. However, according to the President, “Powell has always been ‘Too Late’, except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected.”
• Those messages come after Trump told reporters last week “If I ask him to leave, he’ll be out of there.”
• Chicago Fed President Austan Goolsbee warned that “there’s virtual unanimity among economists that monetary independence from political interference - that the Fed or any central bank be able to do the job that it needs to do - is really important” as Trump continues to undermine the credibility of the Fed.

• Upexi Inc., a consumer-goods company, is raising $100M to accumulate and stake SOL tokens as it joins a slew of companies looking to adopt a digital asset treasury strategy. That $100M investment is being led by GSR. Upexi’s stock price surged from $2 to $18 on the news, before paring those gains back to $10.

• Circle, the issuer of the USDC stablecoin, is planning to launch its own payments network for financial institutions and technology firms to link together and settle cross-border transactions in stablecoin payments.

This Week’s Calendar:

Charts of the Day:

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