Last Friday (14 MAR), the economic data in the United States showed some signs of weakness. The New York Fed Manufacturing Index was significantly lower than expected, recording -20.9 compared to the forecasted -7. Additionally, the University of Michigan Consumer Confidence Index also experienced a slight decline. In the stock market, the performance was dominated by risk re-allocation and large-scale options expiration hedging, with technology stocks leading the decline and closing down by 0.5% to 1%. This week, the FOMC meeting is expected to take place, and it is anticipated that during the Q&A session, Chairman Powell will address the recent higher-than-expected inflation and the accommodative financial situation. Furthermore, several central banks, including those of Japan, the United Kingdom, and Australia, will announce their monetary policy decisions. It is widely expected that major central banks will maintain a dovish stance, and the Bank of Japan may end its negative interest rate policy at the meeting.
In the cryptocurrency market, it was a volatile weekend. The price of BTC briefly dropped and approached the $65,000 level before gradually recovering to around $68,000. Today, it closed at $68,196.83 (+4.29%). ETH, on the other hand, reported $3,626 (+4.84%). In terms of options, the implied volatility decreased from its peak as the prices rebounded, with an overall level of around 75%. The Vol Skew level was relatively low, and the term structure was steep. In terms of trading volume, the downward price fluctuations led traders to buy back BTC 22 MAR 24-64000-P and 29 MAR 24-70000-P, resulting in a release of a significant amount of short positions’ margin. Meanwhile, from the chart, it can be observed that ETH’s recent trend has been relatively weaker compared to BTC. The triangular spread strategy represented by SELL ETH-26 APR 24-4500-C Vs BUY ETH-29 MAR 24-3400-C has become a hotspot for large-scale transactions, with bets on a short-term correlation regression.
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