Daily Market Color

Spot Bitcoin ETF: False Approval

Rates little changed ahead of inflation data. Markets were relatively quiet ahead of this week’s CPI and PPI prints. Rates dropped ~1bp across the curve after strong demand at today’s 3y UST auction drove a ~5bp decline from intraday highs. Equities performed (generally) poorly, as the DJIA (-0.42%) and SPX (-0.15%) dropped. Meanwhile, Bitcoin proponents were falsely elated by a tweet from the SEC that indicated approval for Bitcoin ETFs. The SEC later warned that the account was hacked and that approval was not yet agreed upon. Bitcoin immediately fell from its ~$48k high to just over $45k.

EIA expects oil prices to climb in Q124. The Energy Information Administration (EIA) expects falling global inventories in Q124 to push Brent crude prices to an average of $85 per barrel in March. The EIA also predicts oil prices to be well supported for the balance of the year as demand is expected to exceed supply by 120,000 barrels per day for the rest of 2024. Brent crude oil rose from ~$76 per barrel to $77.6 per barrel by the session’s close.

Brent Crude Oil Futures Price Graph

Michael Barr suggests that the BTFP won’t be extended. The BTFP’s original March 11 expiration date is unlikely to be extended, according to Fed Vice Chair for Supervision Barr. Barr stated, “The program worked as intended… it dramatically reduced stress in the system very quickly.” Though stress in the banking system has faded, outstanding borrowings (~$141B) are at an all-time high. The loans will not have to be refinanced quite yet, as institutions are eligible to borrow for 1 year as late as March 10th.

Bank Term Funding Program Utilization Graph

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