QCP Capital: Focusing on key indicators such as ADP and unemployment rate next week, maintaining an optimistic attitude for the next quarter

In its latest report, QCP Capital pointed out that this week, risk assets have risen sharply, mainly driven by the stimulus measures of the People's Bank of China aimed at revitalizing the Chinese economy. Previously, the Federal Reserve announced a 50 basis point rate cut, setting a positive tone for global markets. In Japan, political developments also changed market sentiment. Shigeru Ishiba is about to become the new Prime Minister and he has openly criticized the Bank of Japan's ultra-loose monetary policy. This has changed market expectations for the Bank of Japan's low interest rate stance and added another layer of complexity to financial patterns.

The core personal consumption expenditure index is the preferred inflation indicator for Fed; it grew by 2.6% year-on-year which was lower than expected (expected growth was 2.7%). This increased market expectations that there might be a 50 basis point rate cut at next FOMC meeting with current probability being 53%, while possibility for a 25 basis point reduction stands at 47%. After data release, Dow Jones Index closed at historical high climbing up by137.89 points.

Going into next week focus will be on upcoming labor market indicators including JOLTs , ADP employment change and US unemployment rates . Strong performance in these indicators could strengthen reasons for further cutting rates by another half percentage point in November thereby pushing risk assets higher . In terms of cryptocurrencies BTC ETF saw significant inflow this week closing Friday with an inflow amounting to $494 million USD . Despite recent lackluster fund flows into ETH ETF , it rebounded slightly ending Friday with an inflow totaling $58 million USD . Compared to BTC implied volatility remains relatively high (8% higher) but ETH/BTC still holds steady above key level of 0.04 .

Despite good momentum in risk asset rebound during fourth quarter we remain optimistic about upper structures that can bring substantial returns as we maintain a positive outlook for next quarter.