SignalPlus Macro Analysis Special Edition: December Goldilocks

The non-farm payroll report was somewhat flat last Friday, and there is still a high chance of rate cuts in December. The overall data of non-farm employment was slightly higher than expected, but last month's weak data (only 12,000) was hardly revised, indicating that there are some signs of weakness in the job market. However, the slightly higher unemployment rate shows that the job market is gradually cooling down and has not deteriorated significantly. In the current positive risk background, this provides support for the Fed to cut interest rates again in December. Currently, the market expects an 85% chance of a 25 basis point rate cut in December, while the possibility of another rate cut in January is about 30%.

Bond Volatility fell to multi-year lows, with yields further declining, 2-year yield approaching 4%, and 10-year yield returning to 4.15%. Ahead of the FOMC meeting, the market will see the release of CPI and PPI data, the last few important economic data before the year-end. With the gradual formation of the Trump 2.0 policy, the yield curve may steepen again.

In terms of US stocks, due to the Favourable Information data and the dovish performance of the bond market, US stocks are once again approaching historical highs. Technically, it still has support. The Tencent index continues to move upward, and the number of stocks setting new 52-week highs still exceeds new lows. The stock market is pumping across the board.

Interestingly, risk aversion is so widespread that growth stocks have once again outperformed value stocks, which is relatively rare in the late stage of the economic rise. Is this a reverse signal of overheating in the current market, or a preliminary sign of a new pump in January? What is certain is that any form of short positions faces huge risks in the current market...

In terms of Cryptocurrency, all indicators are showing comprehensive improvement, with BTC once again closing near $100,000, while ETH is expected to break through $4,000. The inflow of ETF funds is huge, with BTC ETF and ETH ETF adding $2.7 billion and $800 million respectively, with positive inflows for 10 consecutive days. The inflow of TradFi is still the dominant factor behind the Spot's performance, with a cumulative inflow of approximately $12 billion since the election. At the same time, Blackrock and Microstrategy quietly became the largest BTC holders in the market, with a combined holding of nearly 1 million BTC, permanently altering the market's supply and structure.

Finally, as the market's bullish sentiment continues, the funding rate of Perpetual Futures remains relatively high, with annualized rates of over 20% on major exchanges. The BTC Volatility curve also shows a strong bullish skew, although selling strategies remain popular and overall Volatility remains stable.