Cooling Tensions

Daily Updates:

• Last Friday, Elon Musk indicated that he would cool tensions with President Trump following a public feud that saw Tesla shares fall as much as 14% on June 5 after the two went back and forth on social media. 
• In a reply to Bill Ackman, who said that the two should “make peace for the benefit of our great country”, Musk said “You’re not wrong”. 
• US equities were also bolstered by May’s Nonfarm Payrolls jobs report, which showed that the US economy added 139K jobs last month, above the median estimate of 126K. 
• The S&P 500 closed above the 6,000 mark – the first time since mid-February as the headline figure came in slightly higher than expected. US treasuries dropped across the curve, with yields rising by at least 5bps as the 10Y yield now trades at 4.48%. 
• The figures for May point towards a solid US economy. However, total nonfarm payrolls were revised down by 30,000 in April, while March’s total fell by 65,000 to 120K – that is a sign that there are some cracks in the labour market. Additionally, in May, the federal government lost 22,000 jobs, the most since 2020, as efforts made by the Department of Government Efficiency look to have begun to show an impact on NFP data. 
• Following Friday’s release, President Trump pushed the Fed towards a full percentage point rate cut. On his Truth Social platform, the President posted: “‘Too Late’ at the Fed is a disaster! Europe has had 10 rate cuts, we have had none. Despite him, our Country is doing great. Go for a full point, Rocket Fuel!”
• Interest-rate swaps moved in the other direction – markets seemingly focused on the headline figure have trimmed back their expectations of Fed rate cuts, pricing in 43bps of rate cuts following the data – fewer than the two rate cuts that were priced in prior.
• BTC has recovered the losses which saw it drop towards $100K earlier last week during the peak of the Musk-Trump feud, now trading at $105.8K. ETH on the other hand has not shown the same yet – after dropping more than 7% on 5 June, ETH is now at $2500, still $100 shy of its levels before the social media spat between the two began. 
• BTC’s term structure of at-the-money implied volatility remains upward sloping relative to ETH’s flat term structure – 180-day tenors carry a 10 percentage point volatility premium to 7-day options for the former, compared to only a 2 point premium between the same tenors for ETH. 
• Skew is slightly tilted towards OTM puts for 7-day BTC options, though neutral-bullish at all other tenors. Since the beginning of June, BTC 25-delta skew has generally been on an upwards path though has failed to reach higher than 2%, as it had done for much of May. 

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• The divergence of BTC and ETH Spot ETFs that began towards the tail-end of May has continued. Last week, Bitcoin Spot ETFs experienced net outflows of $131M, compared to ETH Spot ETFs which have registered their longest streak of daily inflows so far in 2025. Over the same 5 trading days last week, ETH ETFs pulled inflows of $281.3M. 

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• The People’s Bank of China, PBOC, has expanded its gold reserves for a seventh consecutive month, purchasing an additional 60,000 troy ounces of bullion in May, bringing its total reserve holdings to 73.83M troy ounces.

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• Shares of Metaplanet Inc. surged 15% today on the back of news that the company plans to raise $5.4B to further add to its Bitcoin stockpile which is currently already worth nearly $1B.
• Last Friday Metaplanet announced a stock acquisition rights program, which according to their post on X is the “Largest Stock Acquisition Rights Issuance in Japan Capital Markets History”. The firm expects to accumulate 210,000 Bitcoin by the end of 2027, relative to the 8,888 it currently holds. 

This Week’s Calendar:

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Charts of the Day:

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