MARKET COMPASS
Geopolitical Agenda
Political developments dominate the agenda of global markets. While Donald Trump’s stance on Ukraine became clear with his recent statements, the US President used expressions such as “dictator” and “middle class comedian” about the Ukrainian leader. European countries and Ukraine were not invited to this week’s talks in Saudi Arabia to end the war. Trump’s recent remarks about Zelensky were criticized by European leaders.
In contrast to what he said about the Ukrainian leader, Donald Trump praised the Chinese president, saying, “I can tell you that my relationship with President Xi is great.” Tensions had escalated between the two countries over President Trump’s tariffs. But when asked by reporters on Wednesday whether he would make a new deal with China, Trump replied, “It’s possible, it’s possible.”
FED to Remain Cautious
The minutes of the last meeting of the US Federal Reserve (FED) released yesterday showed that Federal Open Market Committee (FOMC) officials were cautious about further interest rate cuts due to concerns about inflation. FOMC officials assessed the possible consequences of changes in trade and immigration policies, geopolitical disruptions and stronger-than-expected household spending and focused on inflation risks rather than labor market concerns. They also discussed the possibility of slowing or pausing balance sheet reduction due to federal debt ceiling concerns.
Starting a New Day
This week, political statements rather than macro developments have been driving asset prices. Wall Street investors seem to be more optimistic about relations with Russia and China after Trump’s recent statements. However, Asian indices are worried about tariffs despite what the President said about China. Japan is reflecting concerns about its auto sector ahead of its turn in the tariffs. This morning, Asian stock markets are generally selling off. European indices are expected to start the day flat, with major corporate balance sheets and geopolitical developments being closely watched on the continent. Risk appetite seems to be neutral in traditional markets.
Digital Assets Struggling to Recover
Major digital assets seem to have managed to manage the losses last experienced between February 14-18 for now. Dipping below $94,000, BTC is trading around $97,000. In addition to the positive atmosphere brought by the possibility of Trump’s meeting with the Russian leader, Trump’s use of the phrase “We want to be at the forefront of everything, and one of them is crypto” at a conference held in Miami on Wednesday supported the ground for the rise. The agenda regarding ETF applications is also closely monitored.
Although it is now clearer that the FED is willing to take a “long” break from interest rate cuts, both Trump’s attitude and statements for the crypto world and the geopolitical agenda have formed the basis for the recovery movement. However, we think that a new catalyst is needed for this movement to continue. For now, there is not enough evidence for us to see more upside momentum during the day. Therefore, a horizontal and slightly retreating session may be waiting for investors during European transactions. We maintain our expectation of horizontal-volatile in the short term, slightly pressured in the medium term and bullish in the long term.
From the short term to the big picture.
Trump’s victory on November 5, one of the main pillars of our bullish expectation for the long-term outlook in digital assets, produced a result in line with our predictions. In the process that followed, the appointments made by the president-elect and the increasing regulatory expectations for the crypto ecosystem in the US, as well as the emergence of BTC as a reserve, continued to take place in our equation as positive variables. Then, 4 days after the new President took over the White House, signed the “Cryptocurrency Working Unit” decree, which was among his election promises, and we think that the positive reflection of the outputs it will produce in the coming days on digital assets may continue.
On the other hand, the expectations that the FED will continue its interest rate cut cycle, albeit on hiatus for now, and the fact that the volume in crypto-asset ETFs indicates an increase in institutional investor interest, support our upside forecast for the big picture. In the short term, given the nature of the market and pricing behavior, we think it would not be surprising to see occasional pause or pullbacks in digital assets. However, at this point, it is worth underlining again that we think the fundamental dynamics continue to be bullish.
HIGHLIGHTS OF THE DAY
Important Economic Calender Data
| Time | News | Expectation | Previous |
|---|---|---|---|
| Melania Meme (MELANIA) 61.25M Token Unlock | |||
| 13:30 | Initial Jobless Claims | 215K | 213K |
| 13:30 | Philadelphia Fed Manufacturing Index (Feb) | 19.4 | 44.3 |
| 14:35 | FOMC Member Goolsbee Speaks | ||
| 17:05 | FOMC Member Musalem Speaks | ||
| 19:30 | FOMC Member Barr Speaks | ||
| 22:00 | FOMC Member Kugler Speaks |
INFORMATION
*The calendar is based on UTC (Coordinated Universal Time) time zone.
The economic calendar content on the relevant page is obtained from reliable news and data providers. The news in the economic calendar content, the date and time of the announcement of the news, possible changes in the previous, expectations and announced figures are made by the data provider institutions. Darkex cannot be held responsible for possible changes that may arise from similar situations.
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