Home › Market News › Bitcoin Futures, the U.S. Dollar Index, and A Little Bear Market Prep
The Economic Calendar:
MONDAY: Consumer Inflation Expectations (10:00a CT)
TUESDAY: NFIB Business Optimism Index (5:00a CT), Redbook (8:55a CT), JOLTs (9:00a CT), WASDE Report (11:00a CT), 3-Year Note Auction (12:00p CT)
WEDNESDAY: MBA Mortgage Applications (6:00a CT), CPI (7:30a CT), EIA Petroleum Status Report (9:30a CT), 10-Year Note Auction (12:00p CT), Monthly Budget Statement (1:00p CT)
THURSDAY: Jobless Claims (7:30a CT), PPI (7:30a CT), EIA Natural Gas Report (9:30a CT), 30-Year Bond Auction (12:00p CT), Fed Balance Sheet (1:30p CT)
FRIDAY: University of Michigan Consumer Sentiment (9:00a CT), Baker Hughes Rig Count (12:00p CT)
Key Events:
Analysts expect U.S. CPI to rise +0.3% Month over month (M/M) in February (prev. +0.5%), while the core rate is rising +0.3% M/M.
According to market analysts, the S&P 500’s closing price of 5783.00 on election day is now viewed as a de facto “Trump put.” This level represents the threshold below which significant market pressure is expected to mount on the administration. There are other “Trump Put” levels below, around 5200-5300.
Should the S&P 500 breach this level, analysts anticipate a surge in negative headlines, potentially triggering investor demands for policy support.
Traders are looking for any clues about tariff clawbacks or reversals. Last Tuesday, the U.S. imposed tariffs on Canada, Mexico, and China, and traders scrambled to position for a trade war.
There were rumors from Commerce Secretary Lutnick that they could pull back tariffs if the U.S. sees improvement in the terms that they set.
Traders are not expecting any Fed Fund Rate moves until June (47% probability). The market is pricing the best chance for three cuts of 25 basis points for the rest of 2025.
Last week, the market focused on economic data and Federal Reserve commentary, significantly influencing interest rate expectations and Treasury futures.
Key developments included Friday’s February nonfarm payrolls report, which revealed weaker-than-expected job growth. This was partly due to reductions in federal employment driven by DOGE efficiency initiatives. This news generally puts downward pressure on bond yields.
However, Federal Reserve Chair Jerome Powell made remarks on Friday. Powell reassured markets that the U.S. economy remains in “a good place,” offering stability amid economic uncertainty.
In essence, the week presented a mixed picture for interest rates. The weaker jobs report suggested potential economic softening, typically leading to lower yields, while Powell’s positive economic assessment provided some counterbalance. This tug-of-war likely led to fluctuations in 10-year Treasury futures as the market digested these competing signals.
The Bank of Canada (BoC) is widely anticipated to lower its policy rate by 25 basis points on Wednesday, setting the overnight rate target at 2.75%. Current market expectations predict a 70% probability of this scenario, while there’s a 30% likelihood that the Bank will hold rates steady. The potential economic fallout from U.S. tariffs is a key factor influencing the BoC’s decision-making.
Pierre Andurand, a prominent oil trader known for his bold bets and often accurate predictions in the energy markets, has recently faced a significant drawdown. While Andurand’s funds have delivered substantial gains in some years, they have also experienced periods of sharp losses, highlighting the inherent volatility and risk in commodity trading.
According to reports, Andurand’s funds erased all their gains from the previous year within the first two months of 2025. This rapid reversal of fortune is a stark reminder of the unpredictable nature of commodity markets, where geopolitical events, supply and demand imbalances, and macroeconomic factors can trigger dramatic price swings.
While Andurand’s funds reportedly achieved a 50% return in the prior year, those gains were wiped out in January and February 2025. This highlights the potential for significant drawdowns, even for successful traders.
The U.S. dollar has recently experienced a significant decline, which appears particularly noteworthy given the prevailing global context. The dollar’s weakness could be partially attributed to falling U.S. interest rate expectations and declining debt yields amid concerns of a potential U.S. economic contraction.
Some traders worry that it is failing to act as a safe haven amid heightened global political and market stress.
This behavior deviates from the typical “dollar smile” pattern, where the dollar strengthens during periods of both robust U.S. economic growth/rising rates and significant geopolitical turmoil. Traditionally, in times of anxiety, global traders seek the safety and liquidity of U.S. Treasury bonds and dollar-denominated assets. However, despite Washington’s initiation of trade wars and rising geopolitical tensions, the dollar has not exhibited its usual safe-haven strength.
While there may be a flight to safety within the U.S. bond market due to recession fears, the simultaneous dollar decline suggests that global investors are less inclined to view the U.S. as a safe haven. Even though the Canadian dollar and Mexican peso weakened due to U.S. tariffs, the euro and Japanese yen have surged, further highlighting the dollar’s unusual weakness in the face of global uncertainty.
Source: TradingView
The 10-year Bund is in focus, with a 3%+ yield level as a key target.
Following the ECB’s 25 basis point rate cut, the European market narrative is increasingly centered on fiscal expansion, which is altering expectations for monetary policy.
The recent sharp drop in Bund prices is showing signs of moderation. Despite market anxieties, higher yields have been observed recently, and the present range has been established since 2022. Considering the prevailing market sentiment, the overarching trend is expected to drive yields higher and Bund prices lower.
Widespread losses characterize a stock market bear market, and as we believe such a market has begun, it’s crucial to understand its challenges.
While a bearish outlook may be accurate, it’s essential to recognize that bear markets are rarely a straight line down. They are punctuated by sharp, powerful rallies that can be emotionally taxing for traders, especially those with short positions.
The DotCom bust serves as a stark reminder of this phenomenon. During that period, the Nasdaq 100 experienced numerous single-day rallies, some exceeding 18%. In perspective, if the Nasdaq index, currently around 15,600, were to experience a similar-sized rally, it could surge by nearly 3,000 points in a single day.
These “rip-roaring” rallies are a defining feature of bear markets, and investors must be prepared for them. Many speculative tech stocks, which have been a focus of bearish sentiment, are likely to exhibit similar patterns. Often driven by “dreams and memes” rather than fundamentals, these stocks may experience dramatic rallies that can inflict significant losses on short sellers.
Therefore, a shift in trading strategy is necessary. Instead of shorting stocks on breakdowns, a more practical approach in a bear market is to “sell hope and cover into despair.” This means taking short positions during periods of optimism and strength (selling hope) and covering those positions during periods of pessimism and weakness (covering into despair).
Source: Macro Tourist (Kevin Muir)
The recent “Bitcoin Reserve” news was a sell-the-news event, as BTC hovers around $83500 and ETH at $2100 as of this writing.
In a significant move signaling a shift in the government’s approach to cryptocurrency, President Trump signed an executive order establishing a “Bitcoin Strategic Reserve” and a separate “U.S. Digital Asset Stockpile.”
The “Bitcoin Strategic Reserve” will be managed by an office within the Treasury Department and hold Bitcoin (BTC) acquired through seizures. Notably, these BTC holdings will not be sold. A substantial portion of the reserve is expected to come from BTC seized in connection with the 2016 Bitfinex hack, for which U.S. prosecutors have sought court approval to return to Bitfinex.
The order also directs Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to develop “budget-neutral strategies” for acquiring additional BTC for the reserve. In a CNBC interview, Secretary Bessent indicated that the priority is to “stop selling” existing holdings before exploring further acquisitions. This contrasts with past practices where the U.S. government has sold off seized Bitcoin. David Sacks, the White House’s AI and Crypto Czar, has criticized the previous sales, estimating that the government missed billions of dollars in gains by selling approximately 195,000 bitcoin over the past decade.
A separate “United States Digital Asset Stockpile” will be established, similarly capitalized by seized crypto assets. However, unlike the Bitcoin reserve, this stockpile will not be augmented with additional acquisitions, except through criminal or civil asset forfeiture proceedings.
These performance charts track the daily, weekly, monthly, and yearly changes of various asset classes, including some of the most popular and liquid markets available to traders.
