MARKETS week ahead: September 16 – 22

3 dni temuLast week in the news

The ECB cut interest rates by 25 bps at their September meeting, which had some modest influence on European markets. The more important macro news came from the US, where August inflation showed a further relaxation, opening a case for the Fed to cut interest rates. Markets reacted positively to posted figures, where S&P 500 gained 4% on a weekly level, and is currently standing just 1% below its all time highest level. The US 10Y benchmark reached the levels below 3,7%, ending the week at the level of 3,65%. The demand for gold continues, pushing its price to a fresh new all time highest level at $2.577. Investors' optimism increased the demand for riskier assets, where BTC managed to reach the levels of 60K, as of the end of the week.

The ECB cut interest rates by 25 bps during the previous week. Such a move was expected by markets, considering the weakening Euro Zone economy. In an after the meeting speech, ECB President Lagarde did not provide any guidance over the further monetary policy moves, in terms of further cut of interest rates, except one comment that the direction of interest rates is “pretty obvious”. Analysts are generally in agreement that the ECB would have to further cut interest rates in order to support the weakened EU economy, with some voting for more aggressive cuts. The ECB inflation projections remained unchanged from June, however, growth forecasts were changed to the downside. At this moment, the ECB expects a yearly growth rate of 0,8% for 2024, and 1,3% in 2025. The modest growth is expected to be supported by a strong global economy and private consumption.

The US inflation in August reached 0,2% for the month and 2,6% on a yearly basis, showing that it is on a clear down path. This also leaves open space for the Fed to cut interest rates in the coming period. The majority of market participants are now perceiving a high probability that the Fed will make its first move at September's FOMC meeting, which is scheduled for September 19th. The only question which now remains open is how aggressively the Fed will cut? Based on the CME Group FedWatch tool there is an equal number of market participants who are expecting 25 bps and 50 bps.

OpenAI, a creator of Chat GPT application, is starting a new round of funding in order to collect $6,5 billion through issuance of convertible notes. The funds will be used for further development of their artificial general intelligence (AGI) and also for company restructuring in order to remove a profit cap for investors.

MicroStrategy, a company known for its strong devotion and holding of BTC, used the latest dip in the price of BTC to purchase more coins. As company CEO, Michel Saylor posted on the X platform, the company now holds a total 244.800 BTC.


Crypto market cap

The pivotal point for the previous week was the release of the US inflation data for August. Figures were in line with market expectations, in which sense, market participants sustained the previous odds that the Fed will cut for the first time in this economic cycle at their September FOMC meeting. Rate cut is perceived positively by markets, as they expect that the environment of decreased interest rates would help companies to increase their businesses and earnings in the future period. This week the crypto market was also in the spotlight of investors. Although the first half of the week was a bit bumpy, still, Friday's trading session brought back confidence in the crypto market. Total crypto market capitalization was increased by 8% within a week, adding total 152B to its value. Daily trading volumes were also increased to the level of 117B on a daily basis, from 79B traded a week before. Total crypto market capitalization increase from the end of the previous year currently stands at 412B, which represents a 25% surge from the beginning of this year.

Almost all coins gained during the previous week. The market was led by BTC, which managed to gain a little bit less from 10% on a weekly basis, increasing its market cap by 105B. ETH performed in a little bit shy manner, adding to its market cap 12.6B and increasing it by 4.5%. XRP also gained strongly in a week, increasing its value by 11.3% or 3.4B. BNB also performed solidly, with a surge in market cap of 9.6% adding 77B to it. The market favorite Solana was also among solid gainers, with an increase in value of 5.2% or 3.2B. The majority of other altcoins gained between 5% and 10%. There were only a few coins which did not manage to catch up with the general market, like Tron, which was down by 2.8% or Monero, which dropped by 2.2% on a weekly basis.

When it comes to the number of coins in circulation, the activity on the market was relatively lower from the week before. Algorand managed to increase the number of its circulating coins by 0.3%, same as Maker. This week, Filecoin was not leading the market, as it increased its coins in circulation by 0.2%, the same as Polkadot and Stellar. Tether increased its coins on the market by 0.3% same as its market capitalization.


Crypto futures market

The crypto futures market reacted strongly to developments from the spot market. BTC short term futures were traded higher by more than 13% from the week before, while the long term ones were up by around 11.5%. BTC futures maturing in December 2024 closed the week at the level of $61.220, which was 12.15% higher from the close of the previous week. At the same time, futures maturing in December 2025 were last traded at $67.825 or 11.4% higher.

ETH short term futures closed the week by 11.8% higher from the week before. December 2024 reached the last market price at $2.477, which was by 10% higher on a weekly basis. December 2025 was last traded at $2.668, which was an increase of 8.7% compared to the previous week.