Yesterday (April 4th), the yield on US Treasury bonds saw a steep decline during the American trading session due to an unexpected slowdown in the service sector growth, which bolstered expectations of interest rate cuts. However, later in the day, several key figures from the Federal Reserve disseminated a flurry of hawkish rhetoric to the market, emphasizing multiple times the view that current inflation levels remain too high and that clearer progress needs to be seen before considering rate cuts. Among them, “hawkish king” Minneapolis Fed President Kashkari stated in March that the Fed predicted only two rate cuts this year, and if inflationary progress halts, especially under the condition of a robust economy, rate cuts may not be necessary this year. This series of remarks caused a rebound in US Treasury yields, recovering much of their lost ground, with the current rates standing at 4.660% for the two-year and 4.337% for the ten-year. US stocks staged a late-session turnaround, with the S&P, Dow, and Nasdaq ultimately closing down by -1.23%, -1.35%, and -1.4%, respectively.

Source: SignalPlus, Economic Calendar

Source: SignalPlus & TradingView

In the realm of cryptocurrencies, after briefly surging past $69,000, BTC retreated to around $67,000 and oscillated within that range throughout the day. Implied volatility levels saw a slight increase of 1 to 2%Vol, remaining slightly lower overall compared to the 5–8%Vol range observed last week. Meanwhile, Vol Skew has not shown any significant changes, still hovering around the lower quartile of historical data for the past three months.

Regarding trading activities, there’s still a lack of interest in ETH puts. A large number of call options with deltas ranging from 0.1 to 0.15 (such as the 12th April 3700-C, 19th April 3900-C, and 26th April 4000-C) were sold off. On the BTC front, the 12th April 24 70000-C faced strong selling pressure, while a Long Call Spread Flow formed around the 26th April 24 with 73000 as a dividing point. In June, there was a block trade of a 200x4 Long Butterfly option strategy, which appears to reflect traders’ expression of a limited bullish sentiment in the near term and their outlook on future volatility.

Source: Deribit （As of 3APR 8:00 UTC）

Source: SignalPlus, ATM Vol

Source: SignalPlus, Vol Skew

Data Source: Deribit, ETH trading distribution shows that calls near the 0.1–0.15 Delta range are being sold off.

Data Source: Deribit, BTC trading distribution.

Source: Deribit Block Trade

Source: Deribit Block Trade