MARKETS week ahead: September 15 – 21Markets are gearing up for the forthcoming FOMC meeting and surging expectations over a 25 basis points rate cut. These expectations have been priced during the week, where the S&P 500 reached a fresh, new all time highest level, ending the week at 6.584. On the same expectations the price of gold surged to another all time highest level, closing the week at $3.643. The 10Y US Treasury benchmark dropped below the 4,0% at one moment, however, returned a bit back as of the end of the week at 4,068%. This time the crypto market was also in the eye of the investors, where BTC managed to break the $115K resistance, ending the week modestly below the $116K.
The previous week started with the annual revision of non-farm payrolls, revealing a decline of 911,000 jobs, adding to concerns about a cooling U.S. labour market. In August, the Producer Price Index (PPI) fell by 0.1% month-over-month, bringing the annual rate to 2.6%, while core PPI also dropped 0.1%. Both figures came in below market expectations of a 0.3% increase. Meanwhile, inflation rose 0.4% for the month and 2.9% year-over-year, with core inflation slightly elevated at 0.3% monthly and 3.1% annually. Preliminary data from the University of Michigan showed September’s consumer sentiment at 51.8, slightly below the forecast of 54.9, while inflation expectations held steady at 4.8%. Declining jobs market increased market expectations to almost certain that the Fed will cut interest rates by 25 basis points on September 17th.
Nvidia and OpenAI are reportedly in talks to fund a multibillion dollar AI infrastructure project in the U.K., centred on building new data centres, in partnership with cloud firm Nscale. The agreement is expected to be unveiled during President Trump’s state visit to Britain next week. Governments globally are increasingly trying to attract the tech giants to bolster their domestic “sovereign AI” capabilities.
Gemini Space Station shares surged over 40% on Friday during their debut on the Nasdaq, opening at $37.01 under the ticker GEMI after being priced at $28, and reaching a high of $40.71. Founded by Tyler and Cameron Winklevoss, the company was valued at $4.4 billion and joins a growing wave of crypto firms going public amid a loosening regulatory environment under current US Administration.
News are reporting that investors have poured over $7 trillion into cash-like assets such as money market funds and high-yield savings, benefiting from recent Fed rate hikes. However, with the Federal Reserve expected to cut interest rates soon, these safe assets may lose appeal, prompting a shift toward riskier investments like stocks and bonds. Experts warn that a massive market rally fuelled by this "wall of cash" is unlikely unless rates drop close to zero. Historical data shows significant outflows from money funds only occur during major economic crises when rates are very low.
CRYPTO MARKET
A green week on the crypto market, supported by investors' expectation that the Fed will cut interest rates at their FOMC meeting, on September 17th. Almost all coins gained on this expectation surging the value of crypto coins mostly between 10% to 20%. At the same time total crypto capitalization passed the $4B mark, which represents another significant milestone for the crypto market. On a weekly level, total crypto market capitalization was increased by 8%, adding total $290B to its market cap. Daily trading volumes remained at higher levels, with turnovers of around $298B on a daily level. Total crypto market capitalization increase from the beginning of this year currently stands at +25%, with a total funds inflow of $803B.
BTC was the coin to lead the market, however, other altcoins also performed well during the week. BTC gained $115B of funds, increasing its value by 5,2% for the week. ETH had a good week with a gain of 10,3%, adding $53B to its market cap. XRP gained almost 13% w/w, adding $21,5B to its value. Solana and Polkadot are worth mentioning, as both coins gained above 20% for the week. Certainly, the star of the week was DOGE, with an incredible weekly gain of 41%. Ospreys Dogecoin ETF started trading during the previous week, attracting investors' funds and letting the coin surge by 41%.
Increased activity was also reflected in circulating coins. During the previous week, EOS increased the number of its coins on the market by 0,6%, while Algorand gained 0,5% of coins. Stellar managed to add 0,3% new coins to the market, same as Uniswap.
Crypto futures market
Investors' increased interest in ETH was recently exposed both on the spot and the crypto futures market. As per CME, the ETH futures open interest on this market has hit records of over $10B, as a reflection of institutional investors demand. ETH futures gained more than 7% during the previous week for all maturities. Futures expiring in December this year closed the week at $4.792, and those with the expiration date a year later were last traded at $5.143. This is a huge milestone as the long term futures returned once again to levels above the $5K mark.
BTC futures also gained more than 4,5% for all maturities. Futures maturing in December this year were last traded at $119.565, and those maturing a year later closed the week at $126.490.
