Market Update - October 18th 2024

The U.S. non-farm payroll report for September revealed stronger-than-expected job growth, with 254,000 jobs added and upward revisions for both July and August. This points to a resilient labour market and suggests that the economy remains close to full employment, contrary to earlier forecasts by Federal Reserve officials.

However, rising inflation expectations have led to a higher implied end-of-year interest rate standing at 4.36% compared to 4.05% a month ago.

Bond market volatility is once again elevated, with the MOVE index reaching yearly highs at 127 and the 2-year to 10-year Treasury yield spread fluctuating between inversion and positive territory, underscoring the uncertainty around the economic outlook. Investors remain divided on whether the U.S. is headed for a hard or soft landing, as shifting labour market conditions and inflation continue to shape market sentiment.

For Bitcoin and the broader crypto market, strong inflows continue. Over the past week we’ve seen US$419 million pouring into Bitcoin, whilst both exchange and CME Bitcoin futures open interest have reached yearly highs. Technically, Bitcoin is at a critical moment, after a period of consolidation throughout the year. We could be setting up for a positive scenario as we head into year-end, especially as we get closer to the conclusion of the US elections which has been a source of uncertainty to markets.

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