The data released by the US Labor Department on Friday showed that the PP) increased by 0.8% YoY in July, surpassing expectations of 0.7% and the previous value of 0.1%, putting an end to 12 consecutive months of decline. Both the overall and core PPI also rose by 0.3% on a monthly basis, marking the largest increase since January 2023. The better-than-expected PPI was mainly driven by strong growth in the services category, reflecting increased costs in healthcare, transportation, and other sectors. Despite the cooling signs in consumer inflation data announced on Thursday, this robust PPI data reveals that inflation in the US seems to be stickier than many people expected. Following the release of the data, US bond yields rose by 5-7 bps on the same day, while the futures of the three major US stock indexes showed mixed performance, with the DJI up 0.3%, the S&P 500 down 0.1%, and the Nasdaq down 0.68%.
In terms of cryptocurrency, implied volatility hit a low point over the weekend, with the 1-week ATM volatility almost breaking below the 20% support level. However, it rebounded significantly as the trading week approached, reaching its peak before the opening of the Asian market this morning (13th August, 11:00 pm UTC+8). The IV amplitude of BTC/ETH for the current week reached 6.5% and 6.8% respectively, while for the current month it reached 4.92% and 7.27% respectively. However, without actual price fluctuations, the weekend's rally, driven by low liquidity, was difficult to sustain, and by the time of writing, the market had already retraced nearly half of the gains.
As for trading, it was observed that the open interest (OI) of BTC 29DEC23-40000-C significantly decreased in the past 24 hours (approximately -1000 BTC), mainly due to two block trades. The first one involved a (non-proportional) calendar spread between 29DEC23-40000-C and 29MAR23-40000-C. The other one was selling a call spread between 29DEC23-40000 and 50000 (200 sets). In addition to these, there was a significant amount of selling at 30000-C in the short term, mainly contributed by retail traders on Deribit (approximately 350 BTC), which suppressed volatility in the front end before the weekend.
The most notable ETH trading activity involved retail traders on Deribit buying 1900-C options for the expiration dates of 25AUG23, 1SEP23, and 27OCT23, with a cumulative trading volume of nearly 10,000 ETH.
