TheBRRR’s Thoughts

GM.

Overleveraged crypto traders got shaken out on Sunday night, as bitcoin price fell from $43.8k to under $40.5k in minutes, before bouncing back above $41.5.

It appears to be a healthy cleanse of excess leverage as nearly $1.3b was wiped from open positions on futures markets, but it could be the first sign of a larger pullback. We’ll monitor closely this week.

In macro news this week, we’re due for a deluge of economic data from all around the world headlined by US CPI tomorrow. We’ve created a preview of the week ahead in our featured coverage today.

We’re also covering a trend in the Uranium market, as China continues to heavily invest in nuclear energy production. We added exposure to Uranium and miners in the newsletter’s portfolio over the Fall and have seen the position go up by 27% since.

Editor’s Note: We’ve released V1 of our technical analysis chatbot. Premium subscribers can see the link in the premium section at the bottom of the email. I released a preview of what it can do in this post, where I ask it to analyze the daily and hourly bitcoin charts.

Macro News

Preview of Key Market-Moving Data Releases for the Week

1. US CPI (Tuesday):

• US CPI: Expectations are for a flat month-over-month change, similar to last month, partly due to a -8% decline in gas prices since October. Core CPI is projected to increase by +0.3% MoM. Year-over-year, headline CPI might drop to 3.1%, and core CPI could remain at 4.0%.
  
  These estimates, if accurate, would mark the first time the 6-month measure has been below 3% since March 2021​​.

2. FOMC Meeting (Wednesday):

• The market is closely watching the Federal Reserve's stance on future rate cuts. While the hiking cycle is likely nearing its end, it’s deemed premature to discuss cuts at this time.
  
  The dot plot is expected to show 50bps of cuts by the end of 2024, which would be 25bps lower than the projection in September​​.

3. ECB, SNB, and BoE Policy Meetings (Thursday):

• ECB: Expected to hold rates, but there's speculation about a more dovish stance in the future, with potential rate cuts starting from April 2024​​.

• BoE: Also anticipated to maintain current rates, with upcoming UK labor market data and GDP report being key factors.

• SNB: Expected to shift to a dovish policy, with the first rate cut possibly in March.

4. China's Economic Data (Friday):

• Recent data showed Chinese CPI at -0.5% for November, the most significant year-on-year decline in three years. PPI also fell more than expected. This data impacts Chinese equities and has broader implications for global markets, especially considering the reduced likelihood of a policy change from the Bank of Japan​​.

5. US Retail Sales and PPI (Thursday and Wednesday):

• These reports are crucial for gauging consumer spending and inflation trends in the U.S. economy. Retail sales particularly reflect consumer confidence and spending power​​.

  Zerohedge

Commodity News

China Uranium Grab Poses Threat to Western Energy Supply

WHAT HAPPENED:

• China's Aggressive Uranium Acquisition: China is actively securing global uranium supplies, raising concerns for Western energy resources.

• Uranium Price Surge: Uranium prices have soared by 70%, reaching $81 per pound, the highest since 2007.

• Yellow Cake's Warning: André Liebenberg, CEO of London-listed Yellow Cake, highlights the competitive pressure China's actions are placing on Western utilities for uranium resources.

WHY IT MATTERS:

• Energy Security Concerns: China's uranium acquisitions could challenge the West's access to nuclear fuel, critical for low-carbon power sources.

• Global Nuclear Dynamics: The move comes amid increasing global interest in nuclear energy as a constant and low-carbon power source.

• Russia's Dominance: The situation is compounded by Russia controlling nearly 50% of global uranium-enrichment capacity.

• China's Nuclear Ambitions:

  • Accounts for almost half of the global nuclear reactors under construction.

  • Targeting self-sufficiency in nuclear fuel: one-third domestically produced, one-third from investments in foreign mines, and the remainder purchased on the market.

  Financial Times

Poll of the Day

Staggering results so far, with BTC and MSFT tied for the lead:

Got feedback? Follow the writer on Twitter @frank_locascio and send a message.

The BRRR is meant for informational purposes only. It is not investment advice. Please consult with your investment, tax, or legal advisor before making any investment decisions.