TechFlow reported on August 19 that according to a new report from QCP Capital, U.S. equities hit record highs and Asian markets broadly rose, as investors express strong expectations for upcoming rate cuts and a soft economic landing. However, options markets are pricing in a volatility spike of up to 1% for this Friday's speech by Powell at Jackson Hole, reflecting underlying market nervousness.
In stark contrast to the optimism in equity markets, sentiment in the cryptocurrency market remains extremely bearish. Funding rates for Bitcoin perpetual contracts dropped to -13% over the weekend—the lowest level since 2022. Additionally, the market appears to be overlooking the risk of further unwinding of yen/dollar carry trades. According to Bloomberg, institutions such as Vanguard are increasingly betting on further interest rate hikes by the Bank of Japan. Whether this could become a catalyst for further market declines is worth watching.
