Daily Updates:

• President Trump’s comment that the US economy is facing “a period of transition” was a deflection to the question of whether the US will experience a recession this year. This raised speculation that the president is willing to experience some “disturbance” and hardship in the economy in order to pursue the promised benefits of his longer-term program of tax cuts and tariff revenues further down into his second presidency.
• The entire Trump 2.0 administration has added to this sentiment with Treasury Secretary Scott Bessent stating last Friday that the US economy is heading for a “detox period” as Trump reigns in government spending.

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• Those Sunday comments deepened a three-week selloff, which took its toll on equity markets even further yesterday.
• The S&P 500 posted its largest single-day loss (-2.70%) since December 18, 2025 and the Nasdaq-100 (-3.81%), posted its largest single-day percentage drop since September 2022. 
• Treasuries rallied, with 10-year yields falling close to 10bps and 2-year yields dropping to 3.89%, a 5bps fall, as markets aggressively priced in at least three rate cuts over the year. 
• BTC plunged even lower in the Asian session, touching $76K, but has since slowly regained its footing, now closer to $82K, and ETH’s selloff at the Asian open saw it fall to $1788. The last time ETH had fallen below the range of $1800 was in October 2023. 
• In derivatives, the term structure inversions for BTC and ETH continue, with implied volatility levels at the front-end ticking up even higher. Skew for tenors below 90 days, remain predominantly negative towards puts, and whilst longer-tenor options remain hopeful, they have lost some of their call-skew. 

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• Deutsche Boerse’s post-trade unit, Clearstream, will launch BTC and ETH settlement and custody services for institutional clients next month. Over time, they plan to expand their crypto offerings to include stablecoins, tokenised securities, and services like staking, lending, and brokerage.

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• Ethereum’s Holesky testnet regained finality yesterday at Epoch 119090, after nearly two weeks of non-finalisation due to a configuration bug which was exposed during the Pectra testnet roll out. Developers continue working on node stability to restore full functionality for Pectra testing.

This Week’s Calendar:

Charts of the Day: