Syz the moment

VIX has not closed here since the melt up started in late October 2023. You do not compare volatility to trending assets over time, but the shorter term chart shows a clear picture. VIX panic is here. Source: TME, Refinitiv

If you split BTC price in 2 parts, one around halvings (green) and one between halvings (red), then you see that ALL gain is around halvings. Ergo: halvings/S2F/scarcity is the root cause of BTC value. Source: PlanB @100trillionUSD

UK inflation remained weaker than anticipated in January, holding steady at 4% year-on-year, defying forecasts of a rise to 4.1%. This unexpected outcome suggests reduced pressure on the Bank of England (BoE) from underlying price increases. Notably, services inflation reached 6.5%, slightly below the BoE's projections. Despite the stable headline rates, the BoE remains cautious amidst labor market tightness and signs of economic recovery. As a result, traders have adjusted their expectations for rate cuts, now anticipating two cuts for the year, with the first expected in September. However, amidst this cautious sentiment, the UK bond market could emerge as an attractive opportunity. Expected decreases in the Consumer Price Index (CPI) signal potential inflationary relief, supporting the case for Bank of England rate cuts by mid-2024. Furthermore, appealing yields following recent market pullbacks add to the attractiveness of the UK bond market as an investment avenue. It's worth noting that the market does not anticipate a rate cut until the first half of 2024, providing investors with ample time to position themselves strategically. #UKInflation #BankOfEngland #InvestmentOpportunity #BondMarket #EconomicOutlook

Goldman Sachs Panic Index is near decade lows. Source: Win Smart

source : barchart

-> Headline CPI: o Consumer prices rose 0.3% MoM (more than the 0.2% expected), driving the YOY change to 3.1% YoY versus 2.9% expected. Still, the decline from the +3.4% shows the disinflation trend is in place o Under the hood, food and Energy services costs jumped MoM along with transportation services -> Core CPI: o The index for all items less food and energy rose 0.4% MoM in January, the biggest jump since April 2023. The shelter index increased 0.6% MoM in January and was the largest factor in the monthly increase in the index for all items less food and energy. o Core CPI fell below 4.00% YoY for the first time since May 2021, but the +3.86% YoY print was hotter than the 3.7% expected. -> SuperCore CPI: o Core CPI Services Ex-Shelter index soared 0.7% MoM (the biggest jump since September 2022), driving the YoY change up to +4.4% - the hottest since May 2023 (see chart below). Our take: The disinflation trend remains in place. However, the “easy part” of the disinflationary process is behind. Buoyant final demand might sustain some upward pressures on prices. This data raises the odds that the Fed will stay put in March. Source: Bloomberg, www.zerohedge.com

There’s been over 5500 ETF launches in history. NEVER before has an ETF reached $3 Billion AUM in less than 30 days… until now. Both Blackrock and Fidelity’s Bitcoin spot ETFs have just done it. A month after the SEC approval, investors have poured a net $2.8bn into Bitcoin ETFs. Gear up for a Bitcoin FOMO rally to all-time highs, Bernstein's Chhugani says: The market priced in the ETF approval news quickly, but has not priced in the ETF inflows and the upcoming supply crunch. Chhugani believes that the money is still coming from the ‘believers’, who have discovered an easy way to get Bitcoin in their broker accounts via the ETFs. "The disbelievers stay on the sidelines, and based on our investor conversations, we feel that the early interest we are getting is from new curious investors, not yet deployed, but intrigued enough to learn about Bitcoin. The ETF has added a sense of legitimacy, so far missing in the crypto sector. We expect many of these new Bitcoin enthusiasts to allocate capital in the coming days and we think Bitcoin ETFs/Bitcoin miners could benefit, in that scenario". Source: Bloomberg, HolgerZ

Bottom-line: go LONG Fiscal deficits receivers and go SHORT Fiscal deficit payers (i.e interest-rate sensitive sectors) "The wider-than-normal divergence between loose fiscal policy (which is stimulating) and tight monetary policy (which slows things down) contributes to wider-than-normal divergence between the performance of different economic sectors. It results in a wider-than-normal gap between sectors that are directly or indirectly on the receiving side of the deficits (eg business that rely on spending from upper and upper-middle class spenders) vs those that are the most sensitive to interest rates and thus are the most hurt by tight monetary policy (eg commercial real estate). And because some sectors of the economy are doing great partially due to the fiscal stimulus, it makes it unlikely that monetary policy or other assistance will arrive to the weaker areas any time soon. And ironically, because public debt levels are high, tight monetary policy *contributes* to looser fiscal policy by increasing the overall interest expense of the government, which goes to various entities in the economy and strengthens some of the sectors that are not sensitive to interest rates. This is a condition known as fiscal dominance". Lyn Alden