Key Takeaways:
New U.S. tariffs on steel and aluminum trigger EU retaliation with €26B in tariffs starting in April.
VIX index spikes to 28, signaling heightened market uncertainty, while Cboe VIX futures inversion suggests a potential market bottom.
CPI data release today could impact Fed rate cut expectations, currently projected to increase from one to four cuts in 2024.
SEC delays decision on XRP, SOL, LTC, ADA, and DOGE ETFs until May, while Bitcoin ETFs see $154M in net outflows.
Markets Rattled by Trade War and Inflation Concerns
According to QCP Capital’s latest analysis, global trade tensions are escalating, with a new round of tariffs potentially arriving on April 2. The U.S. imposed 25% tariffs on steel and aluminum today, prompting European Union retaliation with a €26 billion tariff package set to begin in April.
This geopolitical uncertainty has shaken market sentiment, pushing the VIX index to 28 before settling at 26.6. The Cboe VIX futures curve has inverted, often a sign that markets are nearing a local bottom.
Meanwhile, tonight’s U.S. CPI data release will be a key driver of interest rate expectations. Currently, traders anticipate four Fed rate cuts in 2024, up from the previously expected single cut. However, January’s higher-than-expected inflation print has cast doubt on this outlook, making today’s CPI report crucial for market direction.
Crypto ETFs Delayed, Market Eyes Regulatory Developments
In the crypto space, regulatory uncertainty is adding to investor caution:
The SEC has postponed its decision on ETFs for XRP, Solana (SOL), Litecoin (LTC), Cardano (ADA), and Dogecoin (DOGE) until May.
A crypto regulatory roundtable is set for March 21, aiming to discuss crypto classification and regulatory frameworks.
Bitcoin ETFs recorded $154 million in net outflows, with Grayscale Bitcoin Trust (GBTC) selling 641 BTC ($56.45M) in a single day, reflecting institutional caution.
Market Outlook: CPI Data and ETF Decisions in Focus
The next major catalyst for markets will be tonight’s U.S. CPI report, which could confirm or challenge expectations of easing inflation. A softer CPI print could reinforce rate cut bets, while higher-than-expected inflation may spook investors further.
Additionally, the market will closely watch ETF approval progress and the March 21 regulatory meeting, as both could significantly impact the short-term trajectory of the crypto market.
