Monday's Markets Update (January 13, 2025)

14 Jan 2025 by rate3

On Monday, equities ended slightly in the green, barely recovering after a sharp morning down-gap, with sectors like financials and healthcare gaining. Investors are now awaiting the CPI report and the start of earnings season. Oil is up again, as traders continue to price in new sanctions. The dollar is at a 27-month high, causing depreciation in other currencies. The euro is almost at parity with the dollar due to the EU's weak economy. The Indian rupee has reached a new record low as decelerating GDP growth has caused investors to pivot to other markets, and the RBI hinted at easing its rate policies amid low inflation and slowing industries. China's manufacturing exports rose sharply in anticipation of tariffs. BTC (89.1) and ETH (3.0) fell sharply again due to the spiking dollar but recovered a bit then, with both starting to test major technical support levels.

Crypto

Following Trump's election win, institutional crypto OTC trading volumes saw a 106% increase in 2024, with BTC up 80%, ETH up 187%, and stablecoin OTC trading volumes up 191% YoY. (source)

World Markets

China's exports surged by 10.7% YoY in December, exceeding expectations. This strong growth was driven by manufacturers front-loading orders ahead of potential new US tariffs. Exports to major markets like the US, South Korea, and the EU increased significantly. For the full year, exports rose by 5.9%, with notable growth in sectors like agriculture, plastics, and electronics.

Currencies

The dollar index surged to a 27-month high, exceeding 110, driven by a stronger-than-expected jobs report and concerns over potential inflationary policies. This led to reduced expectations for Fed rate cuts, with the market now anticipating fewer and later rate cuts. The dollar strengthened against major currencies, particularly the pound and the euro. 1Y trend: "Up, Appreciating"
The euro fell to a 27-month low against the dollar as investors lowered their expectations for ECB rate cuts. Concerns about persistent inflation, geopolitical risks, and the impact of US and UK policies are weighing on the euro. Rising energy prices have also contributed to the euro's weakness. 1Y trend: "Down, Depreciating"
The Indian rupee hit a record low of over 86.6 per dollar in January due to increasing capital outflows, declining foreign exchange reserves, and expectations of looser monetary policy. Slower-than-expected economic growth and concerns about the RBI's ability to support the currency amidst dwindling reserves further fueled the rupee's depreciation. 1Y trend: "Up, Depreciating"

Commodities

WTI crude oil prices surged to a four-month high on Monday, driven by new sanctions. These sanctions target major exporters, insurers, and tankers, disrupting oil flows to key Ural's buyers like India and China. This has caused market uncertainty, with Chinese and Indian refiners facing disruptions. Falling stockpiles, colder weather, and potential tightening of sanctions on Iran further supported the price rally. 1Y trend: "Up"

Comment: Violent Economics

Economics is a remnant of a deterministic world, akin to Newtonian physics. Rooted in the naïve beliefs of 19th-century intellectuals, it posits that humans are nothing more than puppets, driven by primitive desires. This perspective has been twisted into a dogma by national governments, whose megalomaniacal leaders have foisted Keynesian doctrines upon the populace. They wield money as a weapon, seeking to subjugate everyone to their whims.

In essence, true economy is merely a means by which people meet their needs in the most rational and least labor-intensive manner. However, under the reign of these power-hungry individuals, the concept of a job has morphed into a new form of slavery. People everywhere find themselves enslaved to the money these leaders print, tethered to a system that thrives on dependency.

The idea that an economy must operate under a centralized monetary system is increasingly outdated. Instead, it can function on a trust-ledger, where various forms of money—each serving distinct functions—can coexist. Some of these forms might be limited in number, serving as a store of value or a unit of account, while others could act purely as mediums of exchange. What underpins these systems is the trust that individuals place in one another and the issuers of this currency.

As technology advances, the rise of robo-AI is completely transforming hi-tech tools' accessibility for the masses. Basic human needs can now be easily satisfied through low-cost, sometimes even individual-aimed, local production, enabling a majority of people to become money issuers and investors. With Universal Basic Income (UBI) and affordable food&shelter, a new paradigm of living is emerging. This shift allows individuals to engage in bot-investing and promote social accounts that facilitate donations for vital societal contributions—be it in writing, art, or science.

This transformation renders the violent economics perpetuated by governments increasingly obsolete. No longer do individuals need to be coerced into labor for food and shelter, nor do they require a centralized government monitoring every financial transaction. The focus can shift toward external defense, allowing societies to operate in a fundamentally different, more liberated manner.