Good Morning, Asia!

Here's your market scoop as tensions rise ahead of pivotal economic announcements.

Bitcoin is holding steady near the $111,000 mark, with volatility at its lowest levels in months. This remarkable calm is often a prelude to significant market shifts, and traders are bracing for what’s next, particularly with September’s U.S. inflation data and the Federal Reserve’s rate decision set to stir the pot.

Prediction markets reveal a strong leaning towards a rate cut, with bettors assigning an impressive 82% probability for a 25-basis-point reduction on September 17. However, the outlook for October is murky; there's almost an even split on expectations for another cut or a pause, indicating that while we may be in a quiet phase now, volatility could be just around the corner.

Gracie Lin, CEO of OKX Singapore, emphasizes the historical trends, stating, "Markets often look calm just before they move. With vital inflation data dropping on September 11 and the much-anticipated Fed decision looming, this tranquil period seems poised to spark a decisive market shift. A positive inflation surprise or a dovish Fed signal could break the stillness.”

If the Fed opts for a cut, the diminishing money-market returns could create new opportunities for capital to flow into cryptocurrencies, as articulated by market maker Enflux. "The discussion isn’t really about if cuts will happen, but rather whether cash that’s been sitting on the sidelines will jump into BTC, ETH, and other riskier assets,” they noted.

Market Movement Updates

**Bitcoin (BTC):** Currently fluctuating between approximately $110,812 and $113,237, this slight intraday dip reflects the shifting sentiments of investors as the crypto landscape evolves.

**Ethereum (ETH):** With the price hovering between $4,279 and $4,379, ETH is seeing a modest increase, signaling steady demand and renewed interest from investors, although the range remains tight as everyone awaits the Fed’s next move.

**Gold:** Gold is on a record-breaking rally fueled by expectations of Fed interest rate cuts, a softening U.S. dollar, and a resurgence in safe-haven demand.

**Nikkei 225:** Asian markets opened mostly higher, with Japan’s Nikkei 225 climbing 0.2% as traders looked ahead to China’s inflation data, anticipating a slight CPI drop and a smaller decline in the PPI.

**S&P 500:** In the U.S., stocks hit record highs on Tuesday, with the S&P 500 edging up 0.27% to 6,512.61, despite a significant downward revision that cut 911,000 jobs from previous figures.

Stay tuned as we navigate these turbulent waters—one thing's for sure: the market is gearing up for an explosive shift!