Market Update (Mar 28 2023)

CryptoExplorer Author

Posted On Mar 28, 2023 |

As every day, here is our daily market update. Find out what has influenced the price and what we expect in the coming days.

Good afternoon all. Let's dive into a big one.

Firstly, I have done a large breakdown over the last 2 days on professionals opinions and digesting this into my research. I uploaded my notes and then put them into ChatGPT to summarise, and it's actually quite good. I've uploaded this in the <#916659752287731764> channel. I will now dive into all and explain this along with market pricing.

🪙 ***Bond Market:***

So, the main volatility has come from the Bond market. We can see that across the curve (2 Year, 5 Year, 10 Year, and 30 Year), Yields have plummeted in the past few trading weeks. Falling yields mean the Bond market is pricing in the FED to cut rates in a quarter or two's time due to there being a risk now that something may have broke... the banks. However, we have seen Yields bounce slightly in the past few days. That is on the feeling that the Banking crisis may have been sured up by the FED providing liquidity against the Banks Bonds portfolios (using the Bonds the bank owns as collateral for these loans). Therefore, Yields have gone higher as this may mean the FED has another rate increase or two left in them. In my opinion, I think the FED will be done in May (next FED meeting) unless data screams otherwise (unlikely).

💵 ***Equities:***

The Equities market hasn't really moved higher and got ahead of itself yet like the Bond market has, although this may be something we experience in the next week or so. It is my hope that this is the case so we can fill Shorts on the SPX (S&P) at $415 - $430 range.

Essentially, the market is and has got excited at the thought of the FED pausing rates and then eventually cutting them. The issue is this, usually the FED cuts rates because something has systemically broken, or is about to, and they need to stimulate growth. Now, growth/the economy isn't the problem, it's inflation. Take a look at the graph showing the performance of Equities when the FED has cut rates.

Categories: Market Update

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