It's Calmest Before The Storm?

Daily Updates:

• Yesterday’s daily comment was titled ‘The Fifth Inning’. That was an attempted metaphor to highlight that the selloff in US treasuries had at least temporarily begun showing signs of abating from the aggressive selloffs seen last week. Indeed, the last time we saw 10Y yields rally over 50bps in a single week was back in 2001. 
• Yesterday, 10Y treasury yields fell by a further 4bps to 4.33%.

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• US equity markets were also much calmer compared to recent trading sessions: the S&P 500 dropped only slightly to end the day down -0.17% and the Nasdaq-100 rose slightly by 0.18%. 
• That calmness did not last long: Late last night Nvidia announced it faces restrictions on the export of its H20 chip to China, a restriction that will cost the chipmaker $5.5B during the fiscal first quarter. 
• That announcement sent the Nvidia stock plummeting 6% in after-market trading, and with it both SPX and NDX futures are down by 1-2% respectively. 
• That news came after it was reported that the EU and the US made very little progress during a tariff negotiation yesterday and news that China has ordered Chinese airlines to halt any further purchases of aircraft equipment from US companies. 

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• BTC has been steadily chopping downwards too on the lack of signs that Trump’s trade conflicts would be easing anytime soon. Currently BTC is down 2% on the day trading at $83K, while ETH is once again flirting with the $1.5K mark and SOL trades 4% lower. 
• Implied volatility across all tenors for BTC has declined, led by downward moves at the front-end and the 25-delta put-call skew ratio for the 7-day tenor continues to show lopsided demand towards puts. 
• All tenors below 60 days also express a premium for protection against further moves down.
• ETH’s term structure has compressed and is flat after being inverted through most of the month. 

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• The Dollar Strength Index, DXY, which measures the US dollar’s strength against a basket of the top 10 currencies, pared back its gains at its close yesterday and the index is down -7.8% year-to-date. The recent combination of a weaker dollar and higher treasury yields, as we have highlighted, is a sign of traders diversifying from dollar-denominated assets as safe havens – though this might only be a temporary divergence. 

• Fed President Neel Kashkari reinforced those ideas on Friday last week, stating that “investors around the world have viewed America as the best place to invest” and as long as that holds, the US will always “have a trade deficit”. The combination of bond yields rising and the dollar weakening “lends some more credibility to the story of investor preferences shifting”.
• The chart below shows that generally the 10Y yield and the US dollar follow each closely, or they had done so until Trump’s “Liberation Day” tariffs. 

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• In an interview with Yahoo Finance, Treasury Secretary Scott Bessent shrugged off speculation of foreign entities selling US treasuries and exacerbating their recent selloff. Regarding China, Bessent said that “if they sell treasuries then they would have to buy RMBs and it would strengthen their currency. And they’ve been doing just the opposite. They’ve had a weak RMB policy. So it really served no purpose for them to weaponize treasuries.” 
• He also added that he thinks “if treasuries hit a certain level or if the Federal Reserve believed that a foreign — I won't call them an adversary — but a foreign rival were weaponizing the US government bond market or attempting to destabilize it for political gain, I am sure that we would do something in conjunction with each other, but we just haven't seen that”. 

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• Janover (NASDAQ: JNVR), a publicly listed real estate fintech firm, is up over 1,680% since April 4, after a group of former Kraken employees acquired a majority stake, raised $42M via convertible bonds, and announced a “Solana-based digital asset treasury strategy in the U.S. public markets”. They have since acquired 163,651 SOL worth $21.2M. 
• Janover also signed a non-binding Letter of Intent for a strategic partnership with Kraken, which plans to delegate a portion of its 4.5M SOL stake to future Janover-operated validators, boosting validator revenue to support operations and long-term SOL accumulation.

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• CleanSpark will begin selling part of its mined Bitcoin monthly to support a shift toward self-funded operations. It has also secured a $200M credit line with the institutional Prime brokerage division of the crypto exchange, Coinbase to allow for flexible lending via a Bitcoin-collateralised loan.

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• Decentralised exchange KiloEX suffered a $7.5M exploit attributed to price oracle manipulation and has offered the attacker $750K with no legal action if 90% of the stolen funds are returned.

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• Sui has expanded its partnership with Babylon Labs to launch a Bitcoin Secured Network. Through this, Bitcoin holders can access non-custodial Bitcoin staking on Sui. 

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This Week’s Calendar:

Charts of the Day:

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