Asia Colour

“The time to buy is when there’s blood in the streets!” Buying the dip was the winning trade overnight following the post-CPI flush. Headline CPI came in hotter than expected, while core CPI was also slightly higher. This shifted market expectations, with the Fed now expected to delay its first rate cut of the year until December, triggering a bloodbath.

BTC plummeted from $96.5K to $94K, with $163 million in long positions liquidated. However, BTC managed to find its footing at $94K and subsequently made an impressive rally to $98K during the New York session, netting a 4.4% gain.

On the options front, skew continues to favor calls, with the front-end dominating most of the flows, especially for this Friday’s expiry (February 14). Calls with strike prices between $97K and $100K have been the most popular in the last 24 hours.

Looking at the bigger picture, the market is likely waiting for Trump’s reaction to the higher CPI print. Will he continue to argue that the Fed should cut rates further this year, or will he give them the leeway to remain data-dependent? With his soft-landing legacy at stake, we expect Fed Chair Powell to remain conservative and maintain his stance of being data-dependent before moving to cut rates.