WTI Trades with Negative Bias Around $77.00, Snaps Three-Day Winning Streak to Multi-Month Top

Commodity

Summary:

WTI retreats from over a three-month high, though the downside seems cushioned. US sanctions on Russia fuel worries about tightening global supply and lend support. The recent breakout through the very important 200-day SMA favors bullish traders.

West Texas Intermediate (WTI) US Crude Oil prices edge lower on Tuesday and for now, seem to have snapped a three-day winning streak to the highest level since October 8 touched the previous day. The commodity trades with a negative bias around the $77.00 mark during the early part of the European session, though the fundamental backdrop warrants some caution before positioning for deeper losses.

The US Treasury Department on Friday imposed tougher sanctions against Russia's oil industry, targeting nearly 200 vessels of the so-called shadow fleet of tankers. The latest development threatens to tighten global supplies. Adding to this, speculations that US President-elect Donald Trump's administration may tighten sanctions against flows from Iran in the coming months should continue to support Oil prices and validate the positive outlook for the commodity.

Meanwhile, the incoming US macro data pointed to a resilient economy. Furthermore, expectations that Trump's expansionary policies will boost fuel demand support prospects for a further appreciating move for Crude Oil prices. Apart from this, the ongoing US Dollar (USD) profit-taking slide, prompted by retreating US Treasury bond yields and easing fears about Trump's disruptive trade tariffs, suggests that the path of least resistance for the black liquid is to the upside.

Even from a technical perspective, last Friday's breakout and acceptance above the very important 20-day Simple Moving Average (SMA) adds credence to the constructive outlook. Hence, any subsequent slide could be seen as a buying opportunity and is more likely to remain cushioned. Traders now look forward to the release of the US Producer Price Index (PPI), which will influence the USD and provide some meaningful impetus to USD-denominated Crude Oil prices.

Source: FXSTREET

Risk Warnings and Disclaimers

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Glendon

Economic

Forex

The USD/CAD pair remains weak around 1.4380 during the early European trading hours on Tuesday. The stronger-than-expected Canadian December labor market data and a surge in crude oil prices underpin the Canadian Dollar (CAD) against the Greenback. Traders will take more cues from the US December Producer Price Index (PPI), which will be released later on Tuesday.

Traders have become slightly less confident the Bank of Canada (BoC) will continue cutting interest rates in the January meeting after data on Friday showed that the Canadian economy added more jobs than expected in December. The possibility of an interest rate cut from the BoC on January 29 declined to 61%, down from 70% before the labor market data, according to Reuters.

Furthermore, higher crude oil prices amid wider United States (US) sanctions on Russian oil boost the commodity-linked Loonie, as Canada is the largest oil exporter to the US.

On the US front, the Bureau of Labor Statistics indicated on Friday that Nonfarm Payrolls (NFP) increased by 256,000 jobs in December, the most since March, while the Unemployment Rate fell to 4.1% during the same report period. This reading could reinforce bets that the US central bank will maintain a hawkish stance through most of the year, which might lift the USD. The markets are discounting the chances at 2.7% for a 25 basis points (bps) rate cut at the January 28-29 FOMC meeting, according to the CME FedWatch tool.

Source: FXSTREET

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Alex

Bond

For a long time, fixed income investors have viewed central banks as a primary driver of markets — whether it was the ultra-low rates of the 2010s aimed at boosting economic growth and combating persistently low inflation, crisis interventions to stabilize markets and the economy during the COVID-19 pandemic, or the subsequent moves to sharply raise interest rates in response to soaring inflation. Overall, central bank actions and their forward-looking guidance have been front and center as a leading indicator for economic growth, inflation and ultimately markets.

I believe 2025 will be different. Instead of being a principal driver of markets, I see the U.S. Federal Reserve taking a back seat and responding to market events after they occur. Investors will likely hear the Fed maintain a refrain of “data dependence” and “economic uncertainty” and a “meeting-by-meeting” approach. With U.S. economic growth expected to remain above 2% and inflation back within range of the Fed’s 2% target, the Fed can afford to take a more patient approach.

As the Fed’s stance becomes less influential, markets will instead be taking their cues from the other dominant macro force: governments. Fiscal spending and policies — on everything from trade and immigration to taxes and regulation — are all highly important to the future path of growth and inflation. With U.S. policies in flux, I believe market volatility will remain elevated, leading to both higher risk and greater opportunity for investors and active managers that can successfully navigate this period of fiscal dominance.

Against this backdrop, here are five themes that I anticipate will drive core bond portfolios in 2025:

1. The macro backdrop may be favorable, with healthy growth and contained inflation

As president-elect Donald Trump prepares to take office and enact policy changes, I anticipate that U.S. growth may be stronger than previously expected. I see the economy benefiting from a more business-friendly climate defined by potential deregulation and tax cuts. I also anticipate that inflation may be stickier than previously estimated, with tariffs and immigration policies potentially affecting the pace of price increases.

The U.S. economy is on solid footing with healthy forecasted growth

Still, I’m not overly concerned about a sustained spike in inflation. I see a variety of factors that may help offset the impact of potentially inflationary fiscal policies, including a decline in shelter inflation being gradually reflected in the consumer price index (CPI), the deflationary effect of a strong U.S. dollar, and the prior Trump administration’s track record of enacting tariffs without igniting inflation.

2. Elevated interest rates and rate volatility may offer opportunities

With U.S. economic growth at or above 2%, inflation stubbornly above target, and financial asset prices at or near record levels, I believe it will be hard for the Fed to argue that monetary policy is currently restrictive. I expect the Fed will take a measured approach to further reducing interest rates in 2025, with perhaps only one to two 25-basis-point cuts, as it takes its time to assess the impact of fiscal policy on the outlook for growth and inflation. In this environment, I anticipate the 10-year Treasury yield will remain range-bound, potentially trading between 4% and 5%. It’s also my view that rate volatility, which has been elevated over the past few years, will remain so in the near term.

In this environment, yield curve and duration positioning may present opportunities to play both offense and defense. Risks to taking duration exposure appear better balanced and could be appealing over the medium term, while swings in interest rates higher and lower may offer opportunities to lean against potential market overreactions.

Rate volatility increased amid Fed rate actions and remains elevated

While yield curves have finally begun normalizing from their deeply inverted levels of 2024, I believe this process still has room to run. Yield curves remain relatively flat against the backdrop of a more normalized growth and inflation environment. Moreover, there is the potential for additional steepening if the new administration’s policies prove more inflationary than expected or if government deficits and Treasury supply remain high. Positioning for a steeper yield curve may also have the benefit of providing a measure of downside protection to core bond portfolios in case economic growth expectations fall or an unexpected shock surprises the market.

3. Higher quality bonds offer better value

Spread compression has been sweeping in its depth and breadth. The differential between higher and lower quality opportunities has narrowed, with compensation for risk falling to historically low levels. This dynamic has played out across markets, from structured products to investment-grade (BBB/Baa and above) corporates to high yield, as well as within each market, such as between higher and lower rated corporate credit.

Spread premiums for holding riskier debt are compressed across the board

Paltry incremental spreads are not adequately compensating core bond investors for increased risk. Spreads on the Bloomberg U.S. Corporate Investment Grade Index fell to record lows in late 2024 and reached 80 bps as of December 31, 2024. These tight spreads suggest an unfavorable asymmetry, as a relatively small shock has the potential to wipe out incremental returns. For example, a widening of just 10 to 12 bps in investment-grade spreads could potentially generate enough of a price drop, based on the index’s average duration of about seven years, to wipe out a year’s worth of excess carry on those holdings.

Given a positive economic backdrop, some investors may be tempted to reach for yield and take on more risk. But, for core bond investors in particular, I believe this would be a mistake. Leaning into lower quality debt at current valuations may eat up investors’ risk budgets by adding risk while potentially adding little to no incremental return.

In my view, this compression in valuations is creating a rare opportunity for core bond investors to move up in quality without sacrificing yield, and potentially even providing an increase in yield. Shifting to higher quality bonds can mean moving up the ratings spectrum, such as from BBB-rated to A-rated corporate bonds, or upgrading quality across other dimensions. For example, high-quality securitized bonds, as the name conveys, are secured in nature compared to the unsecured profile of a typical corporate bond. Parts of the structured credit and agency mortgage-backed security (MBS) market reflect AAA-rated bonds with minimal credit risk and strong liquidity. They have nominal yields and spreads that rival or exceed those of many lower rated corporate bonds, offering attractive return potential for investors while they wait for a more compelling entry point in corporate credit.

Volatility profiles vary significantly across sectors and the ratings spectrum

Higher quality investment-grade bonds may deliver results similar to their lower quality peers while providing much greater downside protection potential. Drawing on my observations from market cycles across my career, I fully expect dispersion across credit quality to increase again in the coming years and reward a more defensive posture.

Instead of playing offense, I will increasingly use security selection to play defense in portfolios. High-quality issuers in industries ranging from pharmaceuticals to utilities and top-tier financials can be attractive in a risk-off environment given their more defensive profile. And security selection within both securitized credit and the large variety of agency MBS coupons offer compelling opportunities with very attractive yields and minimal credit risk.

4. Correlations are likely to revert to historical norms

The Fed’s aggressive rate-hiking campaign, aimed at taming inflation, upended the traditional relationship between stocks and bonds. When CPI peaked at 9.1% in 2022, it was the first year in decades that bonds fell alongside stocks. High inflation forced the central bank into a policy of sacrificing future growth to fight inflation. In this environment, rather than using rate cuts to offset weaker growth, the Fed actively pursued slower growth by hiking interest rates. This led to negative results for both asset classes.

Inflation has since dropped significantly, with CPI reaching 2.7% in November. With inflation much closer to the Fed’s target, the Fed is no longer trying to engineer slower growth and is instead looking to maintain the current level of growth with stable inflation. This pivot is incredibly important to bond investors because it is the key factor that may allow the stock/bond correlation to revert to historical norms. In response to the next growth shock that negatively impacts equity valuations, the Fed now has the ability to cut interest rates to bolster economic growth, leading yields to fall and bond prices to rise. High-quality bonds may once again provide diversification to equities and other risk assets in potentially adverse market environments.

Importantly, the potential diversification benefit for core bond investors is higher than it’s been in decades. Given the current high level of the federal funds rate, the Fed can meaningfully cut rates if needed to support growth, potentially pushing bond returns into double-digit territory in the event of a negative economic surprise.

Multi-asset portfolios that incorporate high-quality bonds may achieve superior risk-adjusted returns, with the tradeoff that bonds should enhance returns if the equity market wobbles and dampen returns if equities continue to reach new highs.

Bonds appear to have resumed their ability to provide diversification during equity sell-offs

5. Technical factors may be supportive of fixed income

Following a strong year for inflows to bond funds in 2024, I believe structural allocations to fixed income will continue to grow. With yields on the Bloomberg U.S. Aggregate Index of about 5%, investors can capture significantly more income potential versus the index’s 10-year average of about 2.9%. Higher starting yields have historically meant higher forward returns. And core bond investors could also receive the potential for double-digit returns if growth expectations falter. This combination of higher return potential with compelling downside protection potential could lead to higher fixed income allocations in 2025.

In addition, with equity and many other asset classes at or near record-high valuations, investors may increasingly seek to preserve their significant gains and compound them through elevated bond yields. Even rebalancing back to investors’ neutral equity/bond allocation — as portfolios are likely skewed toward stocks given the strength of recent equity market gains — would likely lead to significant fixed income demand, further supporting demand for the asset class.

Relatively high starting yields suggest strong return potential for core bonds

The bottom line for bond investors

With healthy U.S. economic growth, high starting yields and inflation more in check, core bonds are poised to deliver positive returns in 2025.

The current landscape offers a chance to construct a high-quality, high-yielding portfolio that may provide attractive return potential and a measure of downside protection across various scenarios. If 10-year Treasury yields remain range bound at 4% to 5%, carry will be an important component of total return and price appreciation less so. However, the Fed now has ample room to cut rates in the case of a negative economic shock, leading to a very attractive risk/reward profile for high-quality fixed income. Amid an era of fiscal dominance, I see greater opportunities in store for investors and active managers who can successfully navigate this new landscape. Demand for core fixed income is expected to remain very strong in 2025, with core bonds once again poised to diversify portfolios while generating meaningful total returns.

Source：capitalgroup

Risk Warnings and Disclaimers

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Glendon

Economic

When it comes to safe and reliable investments, Certificates of Deposit (CDs) and bonds are two popular options that often come up for consideration. While both are low-risk financial instruments designed to help you grow your savings, they function in different ways and come with distinct benefits and risks. In this article, we’ll explore the key differences between CDs and bonds, how they work, and which might be the better option depending on your financial goals.

What are CDs?

A Certificate of Deposit (CD) is a type of savings account offered by banks and credit unions that pays a fixed interest rate over a specified period, typically ranging from a few months to several years. When you invest in a CD, you agree to leave your money in the account for the duration of the term, and in return, the bank or credit union guarantees your principal and interest at maturity. CDs are considered one of the safest investment options since they are insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), up to a certain limit.

CDs are primarily used by conservative investors who prioritize security over high returns. The interest rates offered on CDs are typically higher than those of traditional savings accounts but lower than those of bonds or stocks. Additionally, because of their fixed nature, CDs are less volatile compared to other investment options, making them a reliable source of predictable income.

What are Bonds?

Bonds, on the other hand, are debt securities issued by governments, municipalities, or corporations. When you purchase a bond, you are essentially lending money to the issuer in exchange for regular interest payments, known as the coupon, and the return of your principal at the bond's maturity. Bonds come in various types, including government bonds (such as U.S. Treasuries), municipal bonds, and corporate bonds. The interest rate, or coupon rate, can vary based on the type of bond and the creditworthiness of the issuer.

Bonds are typically considered a low- to moderate-risk investment, depending on the issuer. Government bonds are viewed as safer investments, while corporate bonds carry a higher risk and may offer higher yields. Unlike CDs, bonds can be bought and sold on the secondary market, meaning their prices fluctuate over time. This creates an opportunity for investors to potentially realize gains (or losses) by selling bonds before they mature.

Key Differences Between CDs and Bonds

Interest Rates: CDs offer fixed interest rates that are guaranteed for the term of the CD. Bond interest rates, or coupon rates, can be fixed or variable and may change depending on the bond type and the issuer’s creditworthiness.

Maturity and Liquidity: One of the main differences between CDs and bonds is the maturity structure. CDs usually have a fixed term ranging from a few months to several years, and you cannot access your money without incurring a penalty before the maturity date. Bonds, however, can be bought and sold in the secondary market before maturity, offering more flexibility and liquidity.

Risk and Safety: Both CDs and bonds are generally considered low-risk, but CDs are the safer option because they are federally insured up to $250,000. Bonds, while safe, do carry a degree of risk, particularly if you invest in lower-rated bonds or corporate bonds that may be subject to default risk.

Returns: In terms of returns, bonds often offer higher yields than CDs, especially long-term or higher-risk bonds. However, the potential for capital appreciation or depreciation in bond prices adds an element of unpredictability. CDs, by contrast, offer more stable, predictable returns.

Tax Treatment: Interest earned on CDs is subject to federal, state, and local taxes, which can eat into your overall return. The tax treatment of bond interest depends on the type of bond; for example, interest from U.S. Treasury bonds is exempt from state and local taxes, while municipal bonds may be exempt from federal taxes.

Investment Goals: If your primary goal is to preserve capital and earn a stable, guaranteed return, CDs are likely a better fit. However, if you're looking for a potentially higher yield and can tolerate some degree of market volatility, bonds might be more appealing.

Which is Right for You?

Choosing between CDs and bonds ultimately depends on your financial goals, risk tolerance, and time horizon. If you’re risk-averse and want a secure, predictable income, a CD may be your best choice. On the other hand, if you’re looking for a higher yield and can accept some level of risk, bonds could offer more attractive returns.

Both investments have their place in a diversified portfolio, and understanding their differences will help you make a more informed decision that aligns with your financial objectives.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Justin

Commodity

Silver price tumbles to near $30.00 as US bond yields rise after traders pare Fed dovish bets.

US bond yields surge after the release of the surprisingly upbeat US NFP data for December.

The overall outlook of the Silver price remains upbeat amid risk-off market sentiment.

Silver price (XAG/USD) falls sharply to near $30.00 after failing to extend its upside above the key hurdle of $30.60 in Monday’s European session. The white metal weakens as the US bond yields strengthens, with market participants reassessing their expectations for the Federal Reserve’s (Fed) monetary policy outlook after the release of the United States (US) Nonfarm Payrolls (NFP) data for December.

10-year US Treasury yields post fresh yearly high to near 4.80% as traders have pared Fed dovish bets after the release of the surprisingly upbeat labor market data. Higher yields on interest-bearing assets weigh on non-yielding assets, such as Silver, as they result in higher opportunity costs for them. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, posts a fresh two-year high above 110.00.

According to the CME FedWatch tool, the Fed is expected to keep interest rates unchanged in the current range of 4.25%-4.50% atleast in the next three policy meetings.

Meanwhile, the broader outlook of the Silver price remains firm as the market sentiment is bearish amid uncertainty over the incoming trade policies under the administration of US President-elect Donald Trump. The appeal of non-yielding assets strengthens in a highly uncertain environment.

This week, investors will focus on the US Consumer Price Index (CPI) data for December, which will be published on Wednesday.

Silver technical analysis

Silver price continues to face selling pressure near the 50-day Exponential Moving Average (EMA), which trades near $30.35. The white metal remains below the upward-sloping trendline around $30.50 on a daily timeframe, which is plotted from the February 29 low of $22.30

The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, suggesting a sideways trend.

Looking down, the September low of $27.75 would act as key support for the Silver price. On the upside, the December 12 high of $32.33 would be the barrier.

Silver daily chart

Silver FAQs

Why do people invest in Silver?

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Which factors influence Silver prices?

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

How does industrial demand affect Silver prices?

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

How do Silver prices react to Gold’s moves?

Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

Source: FXSTREET

Risk Warnings and Disclaimers

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Justin

Economic

“Probably more monetary easing is going to come, in order to make sure the European economy grows,” he told a conference in Hong Kong on Monday. Without further adjustments to the policy stance, “delivering on our inflation target would be at risk”.

ECB policymakers are determining how quickly and how far to lower borrowing costs in 2025, after four quarter-point moves last year. While easing is likely to continue in a similar fashion, some officials have said a larger 50 basis-point cut shouldn’t be excluded due to the plethora of risks facing Europe’s stuttering economy.

While data last week revealed that inflation saw an uptick to 2.4% in December, the ECB predicts that consumer-price growth will be at its target later this year.

The euro-area economy probably only grew 0.7% last year, and ECB forecasts see it accelerating to 1.1% in 2025. The region is being held back by weak output in its top two economies — Germany and France — which are both in political turmoil.

Threatened tariffs after Donald Trump returns to the White House later this month, add to the uncertainty, and ECB president Christine Lagarde has suggested the European Union might be in a better position if it talks with the US about potential trade levies, instead of immediately imposing countermeasures.

But speaking at the panel in Asia with Lane on Monday, Finnish Governing Council member Olli Rehn suggested a more muscular approach.

“If you look at trade policy from an economics perspective, the advice is don’t retaliate, as that makes you even worse off,” he said. But “I would not stay on the ground — just take the beating — if I were a government of the European Union”.

Source: Theedgemarkets

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Warren Takunda

Cryptocurrency

Bitcoin is bracing for the US Presidential inauguration as traders prepare for volatility.

Rangebound BTC/USD is tipped to deliver some surprises around the Jan. 20 inauguration, with key levels standing out.The week will see multiple core inflation prints as the Federal Reserve takes multiple interest rate cuts off the table.The Fed also faces a struggle to contain US dollar strength — a crypto headwind now at its highest since late 2022.Binance’s take buy/sell ratio shows signs that Bitcoin may become a firmer “bid” this month.Exchange inflows are cooling, with traders choosing to hodl BTC in the mid-$90,000 zone.

Bitcoin still risks breaking below $90,000

Bitcoin remains firmly rangebound as a new week begins, with potential volatility triggers reserved for later. Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_1

Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_1

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

After a spike to near $96,000 around the weekly close, BTC/USD quickly returned to familiar ground around $93,000, data from Cointelegraph Markets Pro and TradingView shows.

Considering what could impact the short-term BTC price trend, popular trader CrypNuevo identified two key levels.

“In terms of LTF liquidations, we can see it in two different zones: • $91k: sweep of range lows • $97k - $96.3k: nearby liquidations which can be the easiest target right now. We can also see $96.6k as the main liquidation level,” he explained in a post on X. Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_2

Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_2

Binance liquidation heatmap. Source: CrypNuevo/X

CrypNuevo was referring to where large numbers of liquidations on exchange order books may likely occur.

Zooming out, another chart revealed how much BTC/USD needed to move up or down to exit its current range.

“Mid range gets often retested after a breakout to confirm support/resistance before continuation,” he acknowledged. Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_3

Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_3

BTC/USD 4-hour chart. Source: CrypNuevo/X

Fellow trader Daan Crypto Trades was equally interested in the range boundaries, telling traders to “key an eye” on them before a breakout above $104,700. Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_4

Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_4

BTC/USDT perpetual swap 4-hour chart. Source: Daan Crypto Trades/X

“$BTC holding $93k and the aggression won't start until that level is lost,” another popular trader, Cold Blooded Shiller, continued on the topic of a breakdown.

“Based on the TA it still looks likely that level will snap, and then it's all about the downside total. Everyone wants $85k which means we probably scare those buyers by impulsing a little further.” Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_5

Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_5

BTC/USD 4-hour chart. Source: Cold Blood Shiller/X

As Cointelegraph reported, various forecasts have already seen a retest of sub-$90,000 levels for Bitcoin in January.

CPI headlines a testing week for the Fed

January for crypto and risk assets continues with a “huge week” for both inflation tendencies and the US Federal Reserve.

In the coming days, several key macroeconomic data prints will be released, including the Consumer Price Index (CPI) and Producer Price Index (PPI) for December 2024.

Coming at a time when inflation is rising at the same time as unemployment, the Fed will be keenly eyeing the latest numbers ahead of its next meeting on interest rate changes at the end of the month.

As Cointelegraph continues to report, the Fed has flipped markedly more hawkish over the past month, with markets dialing down the odds of future rate cuts as a result. For crypto, stocks and more, the implication is lower capital inflows, and trader sentiment has thus declined.

“It's a huge week for inflation data and the Fed,” trading resource The Kobeissi Letter summarized in part of its latest X posts.

Kobeissi noted that CPI and PPI would form the last prints of their type before the Fed rate decision, due on Jan. 29.

“Higher for longer is officially back in full swing,” it added about interest rate tendencies going forward. Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_6

Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_6

Fed target rate probabilities. Source: CME Group

The latest estimates from CME Group’s FedWatch Tool put the chances of a minimal 0.25% rate cut in January at just 2.7%.

Initial jobless claims, meanwhile, round out the week on Jan. 16.

US dollar strength nears Fed “response” point

The US dollar is riding high in the run-up to US President-elect Donald Trump’s inauguration on Jan. 20.

Seen as a seminal event for the current risk-asset rally, Trump’s return to power is preceded by conspicuous dollar strength, which traditionally poses a headwind to crypto market performance. Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_7

Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_7

Source: Aksel Kibar

While the correlation between crypto and the US dollar index (DXY) is a matter of debate, the former nonetheless stands at its highest levels in over two years.

The last time such levels were seen, in October 2022, Bitcoin was at the start of its bear market bottoming sequence which completed around two months later.

Popular trader Tony “The Bull” Severino further revealed that the correlation between the two has now reached its highest level since 2016. Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_8

Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_8

Source: Tony “The Bull” Severino

“Still treating $DXY as a structural breakout until it isn't,” market research app The Trading Initiative told X followers on Jan. 12.

“Risk assets likely to continue to struggle until the Dollar drops. Above 110 has historically elicited a response from the Fed as things often begin to break. 110.86 is the target.” Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_9

Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_9

US dollar index (DXY) 1-day chart with RSI data. Source: The Trading Initiative/X

Data hints BTC sellers “losing strength”

For onchain analytics platform CryptoQuant, there is light at the end of the tunnel when it comes to Bitcoin’s current consolidation phase.

In one of its Quicktake blog posts on Jan. 12, contributor Crazzyblockk identified encouraging data from the taker buy/sell ratio metric on Binance.

The ratio compares buy and sell volumes and is attempting to settle higher on weekly timeframes. As Cointelegraph reported last week, its rolling 30-day simple moving average (SMA) flipped to signal sell-side dominance for the first time since March.

“Despite a -5% monthly change, new signs are emerging in the Binance taker buy/sell ratio that suggest sellers are losing strength,” the post asserts.

“The positive shifts in this weekly ratio indicate that sellers are weakening and buying demand is on the rise.” Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_10

Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_10

Binance taker buy/sell ratio (screenshot). Source: CryptoQuant

An accompanying chart showed the daily taker buy/sell ratio with a seven-day simple moving average.

Crazzyblockk acknowledged that Binance’s crypto market presence arguably makes its ratio data the most pertinent.

“The taker buy/sell ratio is a key indicator of market sentiment, and with Binance's prominent position in the crypto space, these shifts in the ratio could signal larger changes in Bitcoin's price trend,” the post added.

The data did not go unnoticed by the wider crypto trading community, with YouTube host Kyle Doops among those hoping for the return of BTC price upside.

“Could this be the start of a broader price move?” he queried on X.

Binance users choose to hodl

In another positive sign from Binance, inflows of BTC into traders’ accounts are maintaining a steady downtrend.

Daily total BTC inflows currently average around 6,000 BTC, CryptoQuant data shows, around a 75% decrease from the recent peak seen in November.

“This decline suggests that selling pressure is easing, as investors appear more inclined to hold their Bitcoin rather than sell it,” contributor Darkfost summarized in another Quicktake post.

“By looking at Binance's Bitcoin netflows, we can observe that outlows continue to dominate but the netflow volume has remained relatively flat in recent days.” Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_11

Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week_11

Binance BTC inflows (screenshot). Source: CryptoQuant

Darkfost considered the odds of a “more balanced market” resulting from traders’ hesitancy to engage in further profit-taking at current levels.

“If this trend persists, it may lead to a period of consolidation or a renewal of bullish momentum,” the post concluded.

Source: Cointelegraph

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Data

WTI Trades with Negative Bias Around $77.00, Snaps Three-Day Winning Streak to Multi-Month Top

Source: FXSTREET

USD/CAD Holds Below 1.4400 on Rising OIL Prices, US PPI Data Looms

Source: FXSTREET

5 Core Bond Portfolio Themes for 2025

1. The macro backdrop may be favorable, with healthy growth and contained inflation

The U.S. economy is on solid footing with healthy forecasted growth

2. Elevated interest rates and rate volatility may offer opportunities

Rate volatility increased amid Fed rate actions and remains elevated

3. Higher quality bonds offer better value

Spread premiums for holding riskier debt are compressed across the board

Volatility profiles vary significantly across sectors and the ratings spectrum

4. Correlations are likely to revert to historical norms

Bonds appear to have resumed their ability to provide diversification during equity sell-offs

5. Technical factors may be supportive of fixed income

Relatively high starting yields suggest strong return potential for core bonds

The bottom line for bond investors

Source：capitalgroup

CDs vs. Bonds: Key Differences and Which Investment is Right for You

What are CDs?

What are Bonds?

Key Differences Between CDs and Bonds

Which is Right for You?

Silver Price Forecast: XAG/USD Slumps to Near $30 as Traders Reassess Fed’s Interest Rate Outlook

Silver FAQs

Why do people invest in Silver?

Which factors influence Silver prices?

How does industrial demand affect Silver prices?

How do Silver prices react to Gold’s moves?

Source: FXSTREET

More ECB Policy Easing in Cards Amid Risks

Source: Theedgemarkets

Strongest US Dollar Since 2022 Bear Market: 5 Things to Know in Bitcoin This Week

Bitcoin still risks breaking below $90,000

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

Binance liquidation heatmap. Source: CrypNuevo/X

BTC/USD 4-hour chart. Source: CrypNuevo/X

BTC/USDT perpetual swap 4-hour chart. Source: Daan Crypto Trades/X

BTC/USD 4-hour chart. Source: Cold Blood Shiller/X

CPI headlines a testing week for the Fed

Fed target rate probabilities. Source: CME Group

US dollar strength nears Fed “response” point

Source: Aksel Kibar

Source: Tony “The Bull” Severino

US dollar index (DXY) 1-day chart with RSI data. Source: The Trading Initiative/X

Data hints BTC sellers “losing strength”

Binance taker buy/sell ratio (screenshot). Source: CryptoQuant

Binance users choose to hodl

Binance BTC inflows (screenshot). Source: CryptoQuant

Source: Cointelegraph

Risk Disclosure