The whole internet is focused on the Federal Reserve's interest rate cuts, but ignores the upcoming Japanese yen interest rate hike! Is a major earthquake coming to the cryptocurrency world?
Next, we must closely monitor the two major events: Powell's speech during the Federal Reserve's interest rate cut and the Bank of Japan's interest rate hike.
The whole internet is buzzing about the Federal Reserve's interest rate cuts, but this wave of good news has basically been released, with Bitcoin bouncing back from $80,000 to $94,000 due to speculation about the rate cut. The key point is the Japanese yen interest rate hike next week; many people forget that after Japan ended its ultra-low interest rates in 1998, the Asian financial system was severely impacted, with Indonesia and Thailand unable to cope, and South Korea almost going bankrupt.
At that time, the Federal Reserve symbolically cut 25 basis points, and in early October, the Japanese yen appreciated significantly, causing a flash crash in U.S. tech stocks. The Federal Reserve was forced to cut rates by 75 basis points at once to stabilize the market, leading to a rebound in the U.S. stock market.
The Japanese yen interest rate hike is bearish for global capital markets because at that time, global investors borrowed yen to buy U.S. bonds. With the yen strengthening, everyone sold U.S. bonds for yen, causing U.S. bond yields to soar and high-risk assets to suffer. This logic still applies today.
Recently, CFTC and CME contract holdings have continued to rise, suggesting that someone is waiting to harvest from the Federal Reserve's interest rate cuts. The real key lies in next week's Japanese yen interest rate hike and the CPI data release. If the CPI unexpectedly rises sharply, the market will be impacted by both the interest rate hike and inflation, resulting in greater volatility.
Powell's speech during the Federal Reserve's interest rate cut is crucial; a dovish rate cut may lead to a market rebound, while a hawkish rate cut combined with the Bank of Japan's interest rate hike will be difficult to handle.
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