Market Compass
Are Trump’s Tariffs Illegal?
- In the US, an appeals court ruled that tariffs that a lower court had ruled illegal could continue to be imposed. The perception that there might be a break in the trade wars was replaced by uncertainty about the issue.
- The matter is far from finalized, but it is clear that the appeals court has bought Trump time.
- On the “Trade Wars” agenda today, Treasury Secretary Scott Bessent’s remarks that negotiations with China have “stalled a bit” and this has increased uncertainty.
- In his face-to-face meeting with Powell, Trump reportedly called for another rate cut, while Dallas Fed President Lorie Logan and San Francisco Fed President Mary Daly said that their focus was on inflation and that it would be good to keep rates steady for a while.
- The US PCE indicator, which will be released today, has the potential to have an impact on the markets ahead of the Federal Open Market Committee (FOMC) meeting on June 18.
- While European stock markets are trying to hold on to the positive side, Wall Street is expected to start slightly negative on trade uncertainties. Digital assets are trying to take the pressure off.
- While we maintain our limited bullish expectation for the short term for the major digital assets, we maintain our upside view for the medium and long term as mentioned below. As it is the last day of Bitcoin futures contracts, we may see some increase in volatility in the US session.
FED’s Favourite Inflation Indicator PCE
Markets will be closely watching April’s Personal Consumption Expenditures (PCE) data for clues on the timing of the US Federal Reserve’s next rate cut decision. This indicator is known as the preferred gauge for FOMC officials to monitor changes in inflation.
Source: Bloomberg
According to the latest data, core PCE was unchanged in March compared to the previous month (0.0%). On an annual basis, core PCE increased by 2.6%. Thus, the index slowed down compared to the 3% increase in February and recorded its lowest increase since March 2021. We can see that the Trump effect was also felt in this data, as the rate of increase in prices slowed down due to the declining demand in the service sector and the decline in the prices of non-durable consumer goods. Our expectation is as follows, slightly above the general consensus.
A higher-than-expected data may support expectations that the FED will maintain its cautious stance on interest rate cuts, reducing risk appetite and putting pressure on digital assets. A lower-than-expected data may pave the way for value gains with the opposite effect.
US Bitcoin Futures Expiration: Options expirations are written on futures contacts with the same expiration date and usually expires on the last Friday of the current month. Trading volume and price volatility may increase in the days leading up to the expiry of these contracts.
Digital Compass
In the US, the locomotive of the world economy, we consider the strategic crypto reserve, which started with Trump’s nomination process, as a very important development. However, we have already seen that the markets had already priced in the “best case scenario” before and after the US elections and that the “less than perfect” news on this issue put pressure on digital assets. We continue to keep the strategic reserve issue in our equation as a positive variable for cryptocurrencies in the long run. Taking into account the latest developments on a global scale, we maintain our bullish expectation for the medium and long term.
For a detailed review of our twice-daily technical analysis report and the latest developments in digital assets click here.
Highlights of the Day
Important Economic Calender Data
| Time | News | Expectation | Previous |
|---|---|---|---|
| US Bitcoin Futures Expiration | |||
| Treasure (MAGIC) Arbitrum Migration Ends | |||
| 12:30 | US Core PCE Price Index (MoM) (Apr) | 0.1% | 0.0% |
| 12:30 | US Core PCE Price Index (YoY) (Apr) | 2.5% | 2.6% |
| 12:30 | US PCE Price Index (MoM) (Apr) | 0.1% | 0.0% |
| 12:30 | US PCE Price Index (YoY) (Apr) | 2.2% | 2.3% |
| 14:00 | US Michigan 1-Year Inflation Expectations (May) | 7.3% | |
| 14:00 | US Michigan Consumer Sentiment (May) | 51.1 | 50.8 |
| 16:20 | FOMC Member Bostic Speaks | ||
| 22:30 | FOMC Member Goolsbee 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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*General Information About Forecasts
In addition to the general market expectations, the forecasts shared in this report are based on econometric modeling tools developed by our research department. Different structures were considered for each indicator, and appropriate regression models were constructed in line with data frequency (monthly/quarterly), leading economic indicators and data history.
The basic approach in all models is to interpret historical relationships based on data and to produce forecasts that have predictive power with current data. The performance of the models used is measured by standard metrics such as mean absolute error (MAE) and is regularly re-evaluated and improved. While the outputs of the models guide our economic analysis, they also aim to contribute to strategic decision-making processes for our investors and business partners. Data is sourced directly from the FRED (Federal Reserve Economic Data) platform in an up-to-date and automated manner, so that each forecast is based on the latest economic data. As the research department, we are also working on artificial intelligence-based modeling methods (e.g. Random Forest, Lasso/Ridge regressions, ensemble models) to improve forecast accuracy and react more sensitively to market dynamics. The macroeconomic context should be taken into account in the interpretation of model outputs, and it should be kept in mind that there may be deviations in forecast performance due to economic shocks, policy changes and unforeseen external factors. With this set of studies, updated every month, we aim to provide a more transparent, consistent and data-driven basis for monitoring the macroeconomic outlook and strengthening decision support processes.
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