Market News

FUNDAMENTAL OVERVIEW

Solana was among the biggest large-cap movers recently, gaining roughly 10–13% around Friday's rally. The catalyst was the broader regulatory relief from the SEC's tokenization framework and CFTC rulemaking. The CFTC has effectively signalled that it intends to move forward with a crypto market framework using its existing authority rather than waiting for Congress. But Solana also had its own fundamental tailwinds.

One interesting development is that tokenized-equity participation on Solana reached a record 850,000 unique holders, while Solana spot ETFs recorded another week of inflows, extending a 12-week streak.

IDIOSYNCRATIC …

Fed policymaker Goolsbee is adding more fuel to the inflation debate, explaining further why the Fed is becoming much less comfortable in sitting on the sidelines. His comments come from prepared remarks at the Official Monetary and Financial Institutions Forum in London:

• If demand overheats, there is no ambiguity about how the Fed needs to respond
• Supply shocks should, in theory, have only a temporary or one-off impact on inflation
• However, the current one is proving to have a more persistent influence and cannot be ignored
• Forecasters have spent more than a year pushing back the date when inflation was supposed to peak and start falling
• That is not a comforting pattern
• We need evidence that these shocks are actually fading or it's hard to see…

US Markets Mixed into Weekend – Nasdaq up 0.4%

US equity markets finished mixed on Friday as investors continued to assess the implications of the Federal Reserve’s latest interest rate hike alongside ongoing geopolitical developments. The Dow Jones edged 0.18% lower to close at 51,682, while the S&P 500 gained 0.17% to 7,650 and the Nasdaq outperformed with a 0.39% advance to 26,522.

US Treasury yields moved sharply higher across the curve as markets continued to adjust to the outlook for tighter monetary policy. The policy-sensitive 2-year yield jumped 7.9 basis points to 4.743%, reaching its highest level since July 2024, while the benchmark 10-year yield climbed 6.6 basis points to 4.996%, leaving it within touching distance of…

FUNDAMENTAL OVERVIEW

Oil has been slowly edging lower amid expectations of a potential de-escalation. The initial leg lower was triggered by Saudi Arabia saying that it was seeking to restore about half the capacity of its East-West pipeline within days and to bring it back to full capacity in about six weeks. US Energy Secretary Wright later confirmed that flows through the pipeline could resume within days.

The upside in oil also remained capped by a few de-escalatory headlines, such as China privately asking Iran to use its influence over the Houthis to help contain the group’s military campaign against Saudi Arabia, as well as hopes for a broader de-escalation…

If there is one major currency pair worth keeping a closer eye on over the next couple of days, it is USD/JPY.

The currency pair is trading back to around 157 after the yen fell roughly 2% last week, despite the BOJ raising its policy rate by 25 bps to 1.25%.

The rate hike itself wasn't enough. Two dissenting votes, albeit from Takaichi-appointed members, and little urgency from governor Ueda over what comes next left traders questioning how quickly the BOJ will tighten further from here.

Meanwhile, the dollar side of the equation remains supportive. The Fed's more hawkish tilt has lifted US rate expectations, with markets now assigning meaningful odds to another hike in October. The bond market is also keeping traders on edge, with 10-year…

FUNDAMENTAL OVERVIEW

Ethereum and other major cryptocurrencies rallied on Friday after a CFTC crypto rulemaking submission on Thursday became public.The filings were submitted for regulatory review after the CLARITY Act failed to advance in the Senate earlier in the week.

The CFTC has effectively signalled that it intends to move forward with a crypto market framework using its existing authority rather than waiting for Congress. Following the news, Ethereum broke out of its month-long range, opening the door for a rally into the $3,000 level.

On the macro side, the market’s focus is now on tomorrow’s UN General Assembly, as Trump called a meeting with Gulf leaders…

The sharp rise in energy prices in the second quarter of this year has inevitably revived comparisons with the 2021-22 energy shock.

While the ECB notes that the nature of the shock this time around is different to the one back then, there is one particular detail in their latest economic bulletin which arguably stands out more. And that is changes in wholesale gas prices may now feed through into euro area consumer inflation more quickly than in the past.

According to its survey of national central banks, wholesale gas price changes are expected to show up in HICP gas inflation within one to three months across more than half of the euro area. Back in 2022, considerably more of that pass-through could take well over a year.

But why does…

FUNDAMENTAL OVERVIEW

Gold has been supported since the FOMC decision as the market has faded the hawkish overreaction. In fact, the Fed projected a less hawkish path for interest rates than the market was pricing and Fed Chair Warsh mostly repeated the points from his Jackson Hole speech.

Moreover, the recent fall in oil prices amid expectations of a potential de-escalation has helped ease inflation and rate hike concerns somewhat.

The market’s focus is now on tomorrow’s UN General Assembly, as Trump called a meeting with Gulf leaders on the sidelines to discuss the next steps in the war with Iran. The Iranian delegation was also allowed to participate in the Assembly,…

Monday starts slowly, with nothing significant in terms of scheduled economic events for the FX market. However, traders will pay attention to speeches from ECB President Lagarde and BoC Governor Macklem.

While the chances of these speeches creating significant market volatility are low, Macklem’s remarks will be watched for clues on the BoC’s policy outlook, particularly whether persistent energy prices could raise expectations for a rate hike this year.

Throughout the week, several FOMC members are also expected to deliver remarks, which will be important to monitor for clues about future monetary policy decisions.

On Tuesday, the U.S. will release the ADP weekly employment change and Richmond manufacturing index, while Wednesday will…