Funds Pull Back From Bitcoin ETFs — Market Talk
1358 ET - Institutional investors are back to mostly pulling money out of bitcoin ETFs, this after flows returned to being positive in August. Bitcoin ETFs are showing net outflows for 6 out of the past 7 trading sessions, with net outflows Wednesday landing at nearly $300 million, according to data from CoinGlass. "New demand is missing," says Glassnode in a note. "On-chain inflows, ETF flows, stablecoin growth and corporate buying have all stalled." Bitcoin is up 1% to $76,887, while ethereum rises 2.6% to $2,472, XRP is up 0.3% to $1.30 and solana climbing 3.3% to $101.77. ([email protected])1214 ET - The late-summer rebound in bitcoin hit a wall in trying to stay above the $80k mark, but the Federal Reserve's interest rate hike isn't expected to be the catalyst that holds bitcoin prices back. "We believe yesterday's move was a mid-cycle adjustment, not a cyclical change," says Zack Pandl of Grayscale Research in a note. "And we doubt the one or two rate hikes expected for 2026 will lead to much change in capital allocation." Pandl harkens back to a similar occurrence in March 1997, when Alan Greenspan's Fed "did an analogous one-off hike… and the Nasdaq bull market kept rolling on." Bitcoin is up 0.7% to $76,669. ([email protected])1111 ET - TD Bank's economics team pushes back on the widely accepted notion of near-term rate increases from the Bank of Canada. "From our lens, the risks from trade, economic growth, and oil prices should keep the BOC firmly on the sidelines," TD says in an updated quarterly forecast. Officially, TD has forecast no change in the BOC policy rate through 2027. The bank says inflation in Canada is running at a cooler pace relative to the U.S., with core CPI close to 2%. TD adds financial conditions have already tightened via higher bond yields, adding the near-term impacts from the deteriorating US-Canada trading relationship "is unquestionably negative." ([email protected]; @paulvieira)1105 ET - Initial jobless claims fell below estimates to the lowest reading in at least six weeks, a clear message that the U.S. labor market doesn't need help from the Fed, Chris Osmond of Fifth Third Wealth Advisors says in a note. Claims have taken a meaningful step down from August's levels, the labor market is resilient and layoff activity isn't accelerating, Osmond says. "The Fed does not need to trade off its inflation fight against labor market fragility," he says. This level of claims gives the Fed runway to keep policy restrictive for as long as the inflation fight requires, Osmond says. There aren't any distress signals from the labor market that would force an early pivot from the Fed, he says. ([email protected])1058 ET - After declining from the Fed rate hike and the failure of the Clarity Act, altcoins are bouncing back. Some of the strongest gainers include Hyperliquid, which is up 6% to $82.97, and Zcash, which is rising 6.3% to $1,421. Derisking was seen after this week's news, says Nicolai Sondergaard of Nansen in a note, but that appears to be subsiding. Other altcoins--crypto tokens outside of bitcoin and stablecoins--have rebounds outpacing bitcoin. Ethereum rises 2.6% to $2,472, solana climbs 3.1% to $101.68, and dogecoin is up 1.8% to 8.2 cents. Bitcoin rises 0.8% to $76,741. ([email protected])1053 ET - The Bank of England's announcement on the quantitative tightening program eases some pressure in the gilt market caused by uncertainty around the process, Jefferies economist Modupe Adegbembo says in a note. The U.K. central bank slowed the pace of quantitative tightening to an average of 46 billion pounds per year, down from 70 billion pounds per year at the moment. It also announced a plan to sell gilts directly to the Debt Management Office rather than to investors, which came as a surprise to markets. Ten-year gilt yields are down 7.1 basis points at 5.215%, down from 5.295% before the BOE's announcement, where it also held interest rates at 3.75%, Tradeweb data show. ([email protected])1022 ET - The Bank of England is likely to raise interest rates at its next meeting in November, Paul Dales at Capital Economics says in a note. While the central bank kept rates unchanged today, four policymakers who voted to hold suggested that unless energy prices fall back, they will soon vote for rate hikes too, Dales says. "That said, we still believe the market has gone too far pricing in rates rising to 4.75%," he adds. Most officials see higher rates as a precaution, not a response to hotter domestic inflation. "As long as energy prices don't rise much further, one or two 25 basis-point hikes is more likely," Dales says, adding that he expects the bank to cut interest rates late in 2027 or in 2028. ([email protected])1019 ET - The Bank of England announced a plan to sell gilts maturing between 2035 and 2049 directly to the Debt Management Office, rather than to investors. This could allow the DMO to transform the gilts' maturities to shorter-dated gilts, reducing supply of long-dated gilts, Berenberg's Andrew Wishart says. This could ease pressure on long-dated gilts, he says. The move is similar to what U.S. Treasury Secretary Scott Bessent wanted to achieve by increasing bond buybacks, although the BOE is shrinking its balance sheet faster than the Federal Reserve, so it is "significantly less aggressive in terms of the overall impact on bond supply to the private sector," he says. U.K. 30-year gilt yields fall 12 basis points to 5.736%, Tradeweb data show. ([email protected])1010 ET - No country in the world can deal withthe challenges of artificial intelligence alone, Teresa Ribera, the EU's top antitrust enforcer, says. Speaking at a conference in New York on Thursday, Ribera adds that international cooperation and common rules are important. "We don't want a race to the bottom. We don't want a race without rules or understanding what it is happening," she adds. "That means working through multilateral institutions, bilateral dialogue, building common standards and a global benchmark for trustworthy, human-centric AI," she says. ([email protected])1006 ET - U.S. pending home sales fell 3.5% week-over-week to their lowest level in almost three years, Redfin says. Declining homebuying demand is giving buyers breathing room. It means less competition and more room to negotiate for the house hunters who are still shopping. New listings fell slightly, -0.5%, from a week earlier, but they're still up 1.5% year-over-year, and there are still hundreds of thousands more home sellers than buyers in the market. More homes on the market equals less pressure on buyers to rush into a decision or pay more than they want. Home-sale prices are holding steady. The median home-sale price rose 2% year-over-year. That stability means prices aren't soaring, and that sellers aren't in immediate danger of home values dropping. ([email protected])1007 ET - Emirates NBD raises its year-end Dubai inflation forecast to 5.6% as elevated oil prices persist for longer than previously expected. Inflation accelerates to 5.5% in August from 5.3% in July, with prices rising 0.3% on month, the bank says. Housing remains the largest contributor to inflation, although price growth in the category has moderated, while higher petrol prices and airfares drove the latest acceleration. ([email protected])1002 ET - Abu Dhabi leads major Gulf stocks higher, with its benchmark index rising 0.5%. The Dubai Financial Market General Index gains 0.3% and Qatar's QE Index adds 0.2%. The gains come despite a potentially more challenging interest-rate backdrop after the Federal Reserve raised its benchmark rate by 25 basis points to a 3.75%-4.00% range, the National Bank of Kuwait says. The Fed's projections signal another increase by year-end as inflation remains elevated, while most Gulf central banks followed the move with 25-basis-point increases under their dollar-pegged currency regimes, putting further upward pressure on regional borrowing costs. ([email protected])