Market Update: 29 October 2026

Thursday 29 October 2026, 10:00 AEDT. Commentary from the Neo-X OTC desk and the Neo-X derivatives desk. Wholesale clients only. Prices are from public sources and are illustrative, not quotes.

Gold, oil and the US curve set the tone: WTI settled at US$102.78 (+2.9%) and the 10-year is back above 5% while the 2-year eased after the hold, so the curve steepened. In FX the dollar firmed against the euro and sterling into the Fed while AUD/USD finished the week where it started. In digital assets bitcoin held its US$80,000 to 82,000 range (−3.3% on the week) and ether underperformed; among the desk's active names HYPE was flat, XLM and SUI were weaker, and tokenised gold tracked spot lower.

Markets

Bitcoin held its range through the Fed. Spot printed an intraday high of US$81,687 early Wednesday US time, slipped below US$80,400 into the decision and traded near US$81,000 after it; at 10:00 AEDT it is US$81,265. The 90-day high of US$86,594 (20 September) has been rejected twice and October has been a grind lower from US$86,500, but the US$80,000 to 82,000 band has now absorbed a weekend dip, the CPI and the FOMC. Coinglass data put Wednesday's bitcoin liquidations near US$58 million, of which more than US$46 million were shorts, and total crypto liquidations above US$167 million with about US$110 million from shorts, so the positioning squeezed by the Fed was short, not long. Galaxy's Alex Thorn has argued the bear market ended in June below US$58,000 and cites a daily close above US$82,500 as the level that would confirm the recovery. ETF flows remain the missing piece: spot bitcoin ETFs took in US$110 million on Monday, but October as a whole has seen more than US$1 billion leave bitcoin and ether ETFs.

Ether has underperformed; a few alts have not. ETH/USD is down 12.1% over 30 days against 2.6% for bitcoin, and the ETH/BTC ratio has fallen from about 0.032 at the start of October to 0.029. Against that, Zcash rose about 8% to US$1,320 and HYPE about 5% to US$81 on Wednesday, with XRP and DOGE up around 3% and SOL 2%; the alt complex is selective rather than broad.

Stablecoin supply is contracting at the margin. Total stablecoin capitalisation was US$300.4 billion at 25 October (DefiLlama), down US$12.7 billion from the May peak. USDT is US$182.4 billion (60.7% share), down US$1.3 billion over 30 days; USDC is US$71.7 billion, down US$4.7 billion over 30 days. Less stablecoin on the sidelines means less immediate buying capacity, and it is consistent with the ETF outflows.

Equities, oil and the curve. US equities closed modestly higher after the Fed, with the S&P 500 at 7,744 and the Nasdaq Composite at 26,550; the ASX 200 gave up a near-1% gain after the CPI to close flat at about 8,847, with energy the drag. December WTI settled at US$102.78 (+2.9%) and Brent at US$115.32, and crude is the thread that runs through both the Australian fuel component and the Fed's inflation language. The US 10-year closed back above 5% at 5.02% while the 2-year eased to 4.71%, so the curve steepened on the hold. Gold slipped 0.5% to about US$4,038. Big-tech earnings land Wednesday and Thursday US time.

The Australian dollar. AUD/USD reached about 0.7045 mid-morning Wednesday on the CPI, settled near 0.703 by the Sydney close and is 0.7033 this morning after a Fed hold that was fully priced. The pair fell from 0.7225 in mid-September to 0.6940 by early October as the US dollar firmed on Fed hike pricing, and has recovered as RBA hike pricing caught up; with both central banks now leaning the same way, the rate differential is doing less work and the pair has gone quiet. On the crosses AUD/NZD is up 1.4% on the week to 1.2529, with the New Zealand dollar the weakest G10 currency on Wednesday, while EUR/USD and GBP/USD are both down about 0.9% on the week as the dollar firmed into the Fed.

Politics and policy

Australia: a November hike is now the base case. The ABS September CPI, released Wednesday, showed headline inflation at 4.3% year on year (up from 4.0% in August) and 1.3% for the September quarter. The trimmed mean rose 1.0% in the quarter and 3.6% over the year, in line with bank forecasts but above the RBA's own August forecast of 0.8% for the quarter. Housing (+5.2%, with electricity +12.8% as Commonwealth rebates expired) and transport (+8.7%, with automotive fuel +23.6% on oil) were the largest contributors. Market pricing for a hike on 3 November moved from about 60% before the release to 79%, and was quoted near 90% in the immediate aftermath. CBA switched its call from hold to a 25 basis point "insurance hike"; ANZ said the data "cements" a November move; Westpac already had a hike and does not expect more beyond it. Deputy Governor Hauser said the numbers were broadly as expected but "too high". The cash rate is 4.60% after four hikes this year, the last on 29 September. Unemployment at 4.7%, a five-year high, remains the argument for stopping after one.

United States: a hawkish hold. The FOMC held the funds rate at 3.75 to 4.00% at 5:00am AEDT this morning, as about 90% of the market expected. The vote was split: Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favour of a 25 basis point hike. The statement kept "inflation remains elevated" and said the committee "will deliver price stability". Chair Warsh said capital expenditure strength is "not just strong, but it is broadening", said politics and the midterms were not discussed, and announced that from 2027 one of the eight annual meetings will be a strategy session with no rate vote, rising to two in 2028. Fed funds futures after the decision point to a strong possibility of a hike at the 8 to 9 December meeting, with one or two more priced for 2027. For AUD/USD and bitcoin the message is that the December hike debate is live, but the market had already priced most of it.

US midterms, 3 November. Polls and prediction markets have favoured Democrats to take the House, with the Senate close. For digital asset policy the relevant point is that the CLARITY Act (market structure) failed a Senate cloture vote 49 to 50 on 15 September and is widely considered dead for this Congress, so the rule-making has moved to the agencies: the SEC's proposed Regulation Crypto Assets closed for comment on 20 October, and the CFTC's crypto market rule is at OIRA review ahead of a formal proposal. Fairshake has committed US$30 million against Sherrod Brown's Ohio Senate bid. A bipartisan crypto tax bill passed House Ways and Means in September and now has a Senate version.

Australia's own regime is further along. The Corporations Amendment (Digital Assets Framework) Act commences 9 April 2027 and brings digital asset platforms and tokenised custody platforms under the AFSL regime, and the expanded AUSTRAC virtual asset service provider obligations, including the travel rule, have applied since 1 July 2026. Neo-X Financial already operates under AFSL 558430 and has been an AUSTRAC reporting entity since 2022.

What we are watching

• Thu and Fri, US time: big-tech earnings. Crypto has traded with semiconductors and AI capex in October; a weak print would test US$80,000 again, a strong one puts Galaxy's US$82,500 daily-close level in reach.
• Fri 30 Oct, US: any first reading of how the dissents reprice December in fed funds futures; a move above 70% for a December hike would firm the US dollar.
• Sat 31 Oct: Celestia unlock of 5.58 million TIA.
• Tue 3 Nov, 2:30pm AEDT: RBA decision and Statement on Monetary Policy with new forecasts. A 25 basis point hike to 4.85% is about 80% priced; the forecasts and whether the board signals one-and-done will matter more than the move.
• Tue 3 Nov (US), results Wed 4 Nov AEDT: US midterms. Control of the Senate determines whether a revived market-structure bill is possible in 2027.
• Daily: US spot bitcoin ETF flows (Farside). Three consecutive inflow days would be the first since early October.
• Fri 25 Dec expiry: the US$72,000 bitcoin put remains the most traded option; open interest at that strike is the market's stated downside reference

OTC desk view

USDT/USD. Taking Binance USDC/USDT as the reference and inverting it, USDT has traded below par every day since 6 October, between 7 and 14 basis points under the dollar for the past fortnight; it closed at 0.9991 on Wednesday (8 basis points under) after a 30-day low of 14 basis points under on Monday. That discount is small in absolute terms but it is persistent, and it is the part of an AUD/USDT price that is not AUD/USD. On Wednesday the Kraken USDT/AUD close of 1.4154 sat about 45 basis points below the ECB USD/AUD rate of 1.4219, so the AUD leg was doing most of the work; that gap reflects thin AUD-pair liquidity around the CPI and Fed rather than anything about tether. For a client converting AUD into USDT the basis is a small tailwind; for a client selling USDT back into AUD it is a small cost. Our quotes combine the two legs into one all-in AUD/USDT rate, so the basis shows up in the rate rather than as a separate fee.

Flow. Client flow over the past week has been steady bitcoin accumulation, with off-ramping back into AUD running at a broadly balanced pace against it, so the desk has been two-way in AUD/BTC rather than one-directional. Altcoin activity has been quieter than usual conditions; the exceptions have been HYPE, XLM, SUI and XAUT (tokenised gold), where client interest has stood out against an otherwise subdued book. These are observations of what the desk has seen, not a view on where prices go next.

Liquidity and settlement. The Fed window has passed; the next event is the RBA at 2:30pm AEDT Tuesday, which falls inside Sydney hours when AUD depth is at its best, so there is no need to pre-position for liquidity reasons. Depth in AUD pairs remains thinnest between the US close and the Sydney open. Clients with size to move around the RBA can secure a rate and settle within the trading facility either side of the announcement. Same-day AUD settlement via NPP and on-chain USDT settlement are unchanged.

Derivatives desk view

Bitcoin options. The 25-delta put-call skew is positive across tenors, meaning puts cost more than equidistant calls, and the US$72,000 put expiring 25 December has been the most traded contract for several sessions. Wednesday's liquidations were two-thirds shorts, which says the leveraged futures book had leaned short into the Fed and was squeezed on a non-event. With the decision out of the way, front-end implied volatility should bleed unless earnings surprise; that is the configuration in which collars are cheapest for a holder, because the put the client buys is still bid on skew while the call the client sells is bid on the US$82,500 breakout debate.

Illustrative structure, not a quote: a two-month BTC collar. A holder of bitcoin at spot US$81,250 buys a US$72,000 put and sells a US$90,000 call to 25 December, structured for zero net premium (zero-cost means zero premium paid up front, not zero risk). At expiry: below US$72,000 the holder is protected at US$72,000 and gives up nothing further; between US$72,000 and US$90,000 the holder keeps the full move in either direction; above US$90,000 the holder's gains are capped at US$90,000 and the upside beyond that is forgone. If bitcoin is at US$95,000 at expiry the holder receives US$90,000 for the capped portion; if it is at US$65,000 the holder receives US$72,000. Strikes, dates and the zero-premium pairing are chosen for illustration; live strikes depend on the volatility surface at the time of the quote, and margin is called on mark-to-market moves over the life of the trade.

AUD/USD. With the Fed done and the RBA on 3 November, one-week AUD/USD implied volatility is the expensive part of the curve and the Fed premium has come out of it. Clients with a known USD payable or receivable in the next fortnight have been asking about forwards and collars that straddle both meetings. The same symmetry applies: a collar removes the outcomes beyond the strikes in both directions.

What would change the view. An RBA that hikes on 3 November and signals more would lift AUD/USD towards the 0.7225 September high and widen the rate differential against a Fed that paused. A hold would do the opposite and would surprise an 80% priced market. For bitcoin, a daily close above US$82,500 on resumed ETF inflows would flatten the put skew; a break of US$80,000 on volume with outflows resuming puts the US$72,000 strike in play and makes protection materially more expensive to buy after the fact.

Neo-X Financial Pty Ltd holds AFSL 558430. Client-facing services are provided by Neochain Pty Ltd, CAR 001320366. Wholesale clients only, as defined in sections 761G, 761GA and 708 of the Corporations Act 2001 (Cth). Neo-X acts as principal, makes markets, hedges across listed and OTC venues and its own inventory, and may hold positions in the assets it quotes. Derivatives carry risk, including loss exceeding any premium received and margin calls. Market data from Kraken, Binance, the ECB via Frankfurter, Trading Economics, Farside, DefiLlama, Glassnode, CoinDesk, Coinglass, the ABS and the RBA; figures are approximate and are not quotes. Nothing in this update is financial product advice or a recommendation to trade. Contact sales@neox.au or (02) 9136 0264.