Trump Says It Is “Getting to Be Decision Time” on an Iran Deal as Brent Holds Near $114 a Barrel

In Today's Note

• Equities fell on Friday, S&P 500 -0.52%, Dow Jones -1.2%, as Brent crude neared $118 a barrel and University of Michigan consumer sentiment slipped to a five-month low of 48 ahead of Fed, ECB and BoJ meetings this week, while BTC fell back below $80,000 after $772.4M of spot ETF outflows and ETH traded around $2,330.
• Senator Richard Blumenthal demanded records from Tether over alleged payments to former White House crypto adviser Bo Hines' consulting firm, while Initia halted its network after a $2.7M MoveVM exploit and HSBC launched its Hong Kong dollar-backed RedCoin stablecoin.

Market Snapshot: Overnight Moves

Macro & Markets

• While last Thursday’s selloff in AI-related shares eased on Friday, a rally in oil prices dragged down risk assets and sent government bond yields higher.
• Brent crude has currently settled around $114 a barrel after reaching close to $118 at the end of last week.
• Most companies in the S&P 500 fell, dragging the index down 0.52% on Friday, while the Dow Jones Industrial Average fell 1.2%.
• Selling pressure on tech shares eased with the Nasdaq-100 ending the session down a very modest 0.0040%.

• Meanwhile, US consumer sentiment fell to a five-month low in October as consumers battled with higher prices and rising interest rates.
• The University of Michigan’s final sentiment index eased to 48 from 48.1 in September, which although was an improvement from the preliminary reading, still topped all estimates in Bloomberg’s survey of economists.
• Director of the survey, Joanne Hsu, claimed “Consumers of all political persuasions agree that inflation is overwhelmingly the greater risk to the economy in the year ahead than unemployment”.

• The broader risk-off sentiment and concerns over the artificial intelligence trade spread into trading today also.
• BTC fell below $80,000 over the weekend, before marginally recovering and falling once more below $80,000 today. That came after investors pulled $772.4M from US-listed spot Bitcoin ETFs across Thursday and Friday, marking a sharp reversal from more than $1B of net inflows earlier in the week.
• Elsewhere, the Kospi Index in South Korea, a bellwether for the AI trade, declined 1.46% today.

• Spending on the AI buildout will come under further scrutiny this week as markets await earnings reports from major AI-players in the US including Alphabet Inc., Microsoft Corp. and Amazon.com Inc.
• In Asia, chipmakers SK Hynix Inc. and Samsung Electronics Co. Ltd. are also set to report their earnings.

• At the same time, the Federal Reserve, European Central Bank and Bank of Japan will all hold their October monetary policy meetings this week too, with all three central banks currently expected to hold interest rates steady in their respective meetings.
• The Fed raised interest rates in September for the first time since 2023, with the accompanying dot-plot for that meeting signalling expectations for one more rate hike this year, which markets currently expect to occur in the December meeting.

• In geopolitics, President Trump said yesterday that it’s “getting to be decision time” on whether he will make a deal with Iran ahead of the US midterms, or whether the US will resume its attacks against Iranian and Houthi threats.
• In an interview with Fox News’ Sunday Morning Futures, the US President said “I have a decision to make: Do I finish it off, which would be very easy to do, or do I make a deal? That’s all. We don’t play games.”
• Previously Trump suggested that US strikes on Iran could resume only after the November 3 midterm elections, and told reporters on Sunday “There won’t be a strike today.”

DeFi / Web3 / Altcoins / Crypto

• US Senator Richard Blumenthal has demanded records from Tether, the issuer of the USDT stablecoin, over alleged multimillion-dollar payments to Nxum, a consulting firm founded by former White House crypto adviser Bo Hines and his father.
• The payments reportedly began shortly after Hines became the White House's top crypto adviser, raising potential ethics and lobbying concerns because he helped advance the GENIUS Act, which established federal stablecoin regulations.
• Tether said an earlier independent legal investigation found no evidence of wrongdoing and confirmed it is reviewing Blumenthal's request for information about its dealings with Nxum and Hines.

• Israeli Prime Minister Benjamin Netanyahu said Israel is exploring blockchain technology as a potential way to operate under future economic sanctions, particularly restrictions on its banking system.
• When asked whether blockchain could help Israel deal with sanctions, Netanyahu replied, "One of them, certainly. I have already asked for a plan to be prepared for that," without identifying who would develop the plan or which technologies it might use.

• Initia, a blockchain network supporting interconnected chains, suspended its Layer 1 network and rollups on October 23 after an attacker exploited a security flaw in its Move virtual machine (MoveVM).
• The attacker exploited a script-caching vulnerability to bypass security checks and create unbacked balances of WETH, iUSD and USDC, without increasing their recorded total supply or minting any native INIT tokens.
• The attacker then withdrew approximately $2.7M in AUSD, ETH and USDC through cross-chain bridges and converted the proceeds into 1,135.52 ETH, before Initia halted the network and began developing a security fix

• The central banks of Malaysia and Thailand have joined Singapore's BLOOM initiative, which brings together regulators and financial institutions to develop cross-border payments using regulated stablecoins and tokenized bank deposits.
• Ripple, Visa, Mastercard, Circle, Coinbase and JPMorgan are among the participating organizations, contributing to the broader initiative.
• Within the BLOOM project, Ripple is partnering with Unloq, a trade finance technology company, to test automated payments using its RLUSD stablecoin on the XRP Ledger, with funds released when conditions such as shipment verification are met.

• Phantom, a crypto wallet provider, has launched access to Kalshi prediction markets for US users, allowing them to trade event contracts using its CASH stablecoin, with a $0.02 per-contract fee plus network charges.
• The rollout comes amid state lawsuits challenging Kalshi's legality, with Phantom restricting certain markets in Michigan, Nevada and Washington while maintaining that its integration complies with federal derivatives regulations.

• HSBC, has launched RedCoin (RCHKD), its first Hong Kong dollar-backed stablecoin, making it available to selected retail customers through its PayMe payments app.
• Users will soon be able to activate stablecoin wallets within PayMe, enabling transfers between individuals and payments to more than 100,000 merchants.
• The launch follows HSBC's receipt of one of Hong Kong's first stablecoin issuer licences, with the bank also planning to expand RedCoin into corporate and institutional payments.

This Week's Calendar

Charts of the Day

Figure 1. Block Scholes BTC Risk-Appetite Index (white, left-hand axis) and BTC spot price (orange, right-hand axis).

Figure 2. Block Scholes ETH Risk-Appetite Index (white, left-hand axis) and ETH spot price (purple, right-hand axis).

Figure 3. BTC at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

Figure 4. ETH at-the-money implied volatility across selected tenors. Source: Deribit, Block Scholes.

Figure 5. BTC 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.

Figure 6. ETH 25-delta put-call skew ratio across selected tenors. Source: Deribit, Block Scholes.

Block Scholes is an FCA-regulated institutional crypto derivatives analytics platform. Live data, IV surfaces, and backtesting available via blockscholes.com.

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