North American News
US Equities Retreat as Powell and Rising Yields Weigh on Market Sentiment
US stock markets opened on a positive note but lost ground as rising Treasury yields and anticipation of Fed Chair Powell’s speech dampened investor optimism. The session ended with notable declines across major indexes, with big-cap tech stocks particularly under pressure.
Market Performance:
- S&P 500: -1.1%
- Nasdaq Composite: -1.8%
- Dow Jones Industrial Average (DJIA): -0.55%
- Russell 2000: -0.8%
Market Movers:
- Big-Cap Tech: Stocks in the technology sector faced significant declines, reflecting broader market unease.
- Treasury Yields: Rising yields contributed to the bearish sentiment, adding to market volatility.
Technical and Political Factors:
- S&P 500: The index traced an outside day, which technically signals potential caution.
- Fed Chair Powell’s Speech: Investors are bracing for Powell’s upcoming address, which could influence market direction.
- Kamala Harris’ Speech: Tonight’s speech by Vice President Kamala Harris is also being monitored as a potential risk factor.
Overall, early optimism was overshadowed by concerns about interest rates and geopolitical risks, leading to a broadly negative close for US equities.
US 30-year TIPS sell at 2.055% vs 2.045% WI
- Results of the 30-year inflation-protected sale
- Bid-to-cover ratio 2.61
- High yield 2.055% vs 2.045% presale WI
- Sells $8 billion
- Awards 95.35% of bids at high
- Primary dealers take 6.89%
- Direct 15.56%
- Indirect 77.56%
August US S&P Global services PMI 55.2 vs 54.0 expected
- The August 2024 PMI surveys from S&P Global
- Prior was 55.0
- Manufacturing PMI 48.0 vs 49.6 expected (prior was 49.6)
- Composite PMI 54.1 vs 53.5 expected (prior was 54.3)
- An improvement in service sector confidence was offset by a gloomier mood in manufacturing
- Employment fell in August, dropping for the first time in three months
Commenting on the data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said:
“The solid growth picture in August points to robust GDP growth in excess of 2% annualized in the third quarter, which should help allay near-term recession fears. Similarly, the fall in selling price inflation to a level close to the pre-pandemic average signals a ‘normalization’ of inflation and adds to the case for lower interest rates.
“This ‘soft-landing’ scenario looks less convincing, however, when you scratch beneath the surface of the headline numbers. Growth has become increasingly dependent on the service sector as manufacturing, which often leads the economic cycle, has fallen into decline. The manufacturing sector’s forward-looking orders-to- inventory ratio has fallen to one of the lowest levels since the global financial crisis.
“At the same time, service sector growth is constrained by hiring difficulties, which continue to push up pay rates and means overall input cost inflation remains elevated by historical standards.
“The policy picture is therefore complicated, and hence it’s easy to see why policymakers are taking a cautious approach to cutting interest rates. However, on balance the key takeaways from the survey are that inflation is continuing to slowly return to normal levels and that the economy is at risk of slowing amid imbalances.”
US initial jobless claims 232K vs 230K expected
- Weekly initial jobless claims for the week ending August 17, 2024
- Prior was 227K
- Continuing claims 1.863 vs 1.867m expected
- Prior continuing claims 1.864m (revised to 1.859m)
US July existing home sales 3.95m vs 3.93m expected
- US July existing home sales data for July 2024
- Prior was 3.93m
- Sales +1.3% vs -5.4% prior (breaks a four-month losing streak)
- Sales -2.5% y/y
- Inventory 4.0 vs 4.1 months prior
- Median prices $422,600 vs $426,900 prior
- Prices up 4.2% y/y
“Despite the modest gain, home sales are still sluggish,” said NAR Chief Economist Lawrence Yun. “But consumers are definitely seeing more choices, and affordability is improving due to lower interest rates.”
Chicago Fed national activity index -0.34 vs +0.05 prior
- The composite index from the Chicago Fed
- Prior was +0.05 (revised to -0.09)
Fed’s Collins: Timing seems appropriate to begin easing monetary policy
- Comments from the Boston Fed President
- Policy is well-positioned, wants gradual, methodical approach to cutting
- There is a clear path to achieving Fed’s goals without unneeded downturn
- Asked about job benchmark revisions, says data overall tells a consistent story
- Labor market overall is quite healthy and we want to preserve that
- Unemployment is still low and jobless claims indicate orderly rebalancing
- Labor market overall is quite healthy and we want to preserve that
- Soon is appropriate to begin cutting rates
- A gradual and methodical pace of cuts is likely to appropriate once we are in a different policy stance
- Still see quite a bit of resilience among consumers, also stress pockets though
- Preserving a healthy labor market is a priority
Fed’s Harker says he’s ready to start the process of cutting rates
- Harker at Jackson Hole with CNBC
- Jobs market revisions weren’t a surprise
- You can’t just look at revisions, look at jobless claims
- It was all inflation for awhile, now it’s the balance of risks
- Businesses tell us they don’t care if it’s 25 or 50 bps, they want it to be methodical and get to neutral
- Shelter is the price input I’m worrying about
- Developers are sitting on projects until they get some sense of where rates will be
- Wants a gradual and methodical course of rates cuts
- Current monetary policy is in a good place, not overly restrictive
- End of easing cycle may put Fed funds around 3%
- Business contacts favor a predictable pace of cutting
- Fed rate cuts will likely ease housing sector pressure
- Unemployment likely to rise to just below 5%
- Continues to watch commercial real estate sectors
- Job market has now mostly normalized
Fed’s Schmid: Rates are not overly restrictive, we have time to decide
- Remarks by Kansas City Fed president, Jeffrey Schmid
- Quite strongly believe that we have to sustainably get inflation back to 2%
- There is still work to do on that
- We’ve seen some cooling in labour market conditions but it is still generally pretty strong
- On the NFP revision, “it doesn’t change a lot” to the outlook
- Rates are not overly restrictive
- There is room to consider where we go from here
UBS on the Fed (September cut coming) and S&P 500 (target 6200)
- Forecast from UBS
UBS analysts are looking for he S&P 500 to reach 5,900 by year-end and 6,200 by June 2025.
Reasoning (in summary):
- Federal Reserve officials are confident that rate cuts may soon be appropriate
- At Jackson Hole Fed Chair Powell is expected to provide guidance on the Fed’s future actions as it moves away from its restrictive policies. If not, the updates and decisions in September should offer more clarity.
- Fed expected to front-load interest rate cuts, possibly easing rates at each of its three remaining meetings in 2024, with the potential for a 50-basis-point cut if the labor market or consumer spending weakens significantly.
- Historically, rate cuts in non-recessionary periods have been positive for stocks, with the S&P 500 typically rising by 17% in the 12 months following the first cut.
- strong economic and earnings fundamentals
Reports that at least 3 major banks got the jobs revision prior to the public release
- Bloomberg (gated) with the info:
- At least three banks managed to obtain key payroll numbers Wednesday while the rest of Wall Street was kept waiting for a half-hour by a government delay
- After the Bureau of Labor Statistics failed to post its revisions to the monthly payroll figures at 10 a.m. New York time, Mizuho Financial Group Inc. and BNP Paribas SA both called the department and got the number directly. So did Nomura Holdings Inc.’s economic research team, according to a person familiar with the situation.
BlackRock’s Reider says US rates too high – “Fed Funds rate remains far too restrictive”
- Rick Rieder is BlackRock CIO of Global Fixed Income
Reider citing the US government report, from the Bureau of Labour Statistics showing annual preliminary benchmark revisions in payrolls came in at -818k since March 2023.
- revisions in payrolls at -818k since March 2023 comes in addition to 778k jobs being revised away since Feb 2022
- This magnitude of preliminary revisions helps to validate some of the concern around the weakness in the labor market in recent months.
- Ultimately, today’s report highlights the importance of the labor portion of the Fed’s dual mandate and codifies the fact that the Fed Funds rate remains far too restrictive amidst slowing inflation and a moderating economy.
Canadian government says it’s exploring all options on ending rail shutdown
- Both Canadian main railways paralyzed
The Canadian government says it’s exploring all possible solutions to ending a rail lockout that started today, including binding arbitration.
Canadian rail lines carry massive amounts of freight, including into the US. Previously, collective agreements with CN and CP were staggered, so this is the first time they’ve even been shuttered at the same time.
More here.
Commodities
Gold Dips as the Dollar Gains Strength
Gold pulled back from their record highs as the US Dollar strengthened. The precious metal, which had recently surged to an all-time high of $2,531, fell to $2,482 during Thursday’s trading.
Market Performance:
- Gold: -1.0% to $2,482
- US 10-Year Treasury Yield: +6.5 bps to 3.865%
Key Drivers:
- Economic Data: US jobless claims exceeded expectations, while business activity remained robust despite ongoing manufacturing contraction.
Fed Minutes Impact:
- The Federal Open Market Committee’s recent minutes suggested a potential rate cut in September if data aligns as expected. Despite this dovish tilt, stronger US Dollar pressures weighed on gold prices.
- Fed officials, including Boston Fed President Susan Collins, indicated confidence in easing policy, though caution in rate cuts remains a theme.
Daily Market Movers:
- US Jobless Claims: Rose to 232K for the week ending August 17, higher than forecasts.
- S&P Global PMI: Manufacturing PMI contracted to 48.0; Services PMI rose to 55.2.
- Existing Home Sales: Increased by 1.3% in August, in line with expectations.
Gold traders are now adjusting their positions ahead of Fed Chair Powell’s upcoming speech, with profit-taking contributing to the recent decline below $2,500.
Palladium: Some pressure off the discretionary short – TDS
The short-squeeze play in Palladium markets is still on, but we now see some time-decay on the horizon, TDS Senior Commodity Strategist Daniel Ghali notes.
Short-squeeze play in Palladium markets is still on
“CTA buying activity over the last sessions has raised the risk that the long-awaited squeeze on algos could once again come to fruition. Our simulations of future prices do suggest scope for a large-scale short squeeze that would nearly wipe-out algo shorts.”
“However, discretionary traders now hold a larger short position than algos in Palladium markets. Our gauge suggests that this cohort has now nearly reaccumulated its record net short position, which adds vulnerabilities should algo shorts come under pressure.”
“The current set-up, however, has a time decay. Barring a continued rally in prices, CTAs could be back on the offer by the end of next week, even in a flat tape. This would take some pressure off the behemoth discretionary short.”
TD says macro positioning data in gold appear to be flashing warning signs – downside risk
TD is wary of gold, saying that their data on macro positioning data in gold appears to be flashing warning signs.
- model suggests gold positioning is statistically consistent with 370bps of Fed rate cuts, a fairly extreme level
- Commodity trading advisors (CTAs) are “max long” gold, and positioning in Shanghai has reverted to record highs
- dearth of visible shorts in the market is also a concern
- positioning cues suggest the market may be overly positioned for bullish gold narratives at the moment
TD says that fundamental factors for gold remain strong, but also say that narratives often end up chasing prices rather than driving them:
- risk is of washout in gold positioning, potentially triggered by key events like the Jackson Hole symposium or the next nonfarm payrolls report
- downside risks appear to be growing, even if the timing of any potential correction is uncertain
- the data implies the gold market may be vulnerable to a sharp pullback from current levels if positioning needs to be unwound
EU News
Eurozone August flash consumer confidence -13.4 vs -12.6 expected
- The first reading on August eurozone consumer confidence
- Prior was -13.0
Eurozone wages slow down in Q2
- The negotiated wages growth for Q2 2024 is seen at 3.55%, down from 4.74% in Q1 2024
Eurozone August flash services PMI 53.3 vs 51.9 expected
- Latest data released by HCOB – 22 August 2024
- Prior 51.9
- Manufacturing PMI 45.6 vs 45.8 expected
- Prior 45.8
- Composite PMI 51.2 vs 50.1 expected
- Prior 50.2
HCOB notes that:
“At first glance, this looks like a pleasant surprise: activity in the Eurozone picked up in August. But a closer look at the numbers reveals that the underlying fundamentals might be shakier than they appear. The boost largely comes from a surge in services activity in France, with the Business Activity Index jumping by almost five points, likely linked to the buzz surrounding the Olympic Games in Paris. It’s doubtful this momentum will carry over into the coming months, however. Meanwhile, the overall pace of growth in the services sector has slowed down in Germany, and the eurozone’s manufacturing sector remains in rapid decline.
“It’s a tale of two worlds. The manufacturing sector remains mired in recession, while the services sector still appears to be growing at a decent clip. But with the temporary Olympic boost in France fading and signs of waning confidence across the Eurozone’s service industry, it’s likely only a matter of time before the struggles of the manufacturing sector start weighing on services too.
“Manufacturers raised their selling prices for the first time since April 2023, a response to three straight months of rising input costs. Despite weakening demand, firms seem to have had little choice but to pass on some of these higher costs to customers. On the bright side, this suggests there’s still some pricing power in the market.
“The ECB might find some reassurance in the latest price indices. Input costs in the services sector, which are closely watched by monetary authorities due to the significant role wages play, rose at the slowest pace in 40 months. So, even though output prices in the service sector climbed faster than they did in July, the easing of cost pressures strengthens the case for an interest rate cut at the ECB’s September meeting.”
PMIs on the agenda in Europe today
- A final look at the euro area economy before the ECB meeting next month
Germany August flash manufacturing PMI 42.1 vs 43.5 expected
- Latest data released by HCOB – 22 August 2024
- Prior 43.2
- Services PMI 51.4 vs 52.3 expected
- Prior 52.5
- Composite PMI 48.5 vs 49.2 expected
- Prior 49.1
HCOB notes that:
“These numbers are a real mess. The recession in Germany’s manufacturing sector deepened in August, with no recovery in sight. In fact, new orders took a sharper dive than last month, mainly due to a significant drop in foreign demand, signalling more trouble ahead. Given this, it’s hardly surprising that companies are ramping up staff cuts and slashing inventories of inputs even more aggressively than before.
“The struggles in manufacturing are starting to spill over into the otherwise steady services sector. For the third month in a row, services activity growth has slowed down. New business is barely growing, and backlogs declined once again. The export side of services, including tourism, isn’t offering much support either, shrinking at an even faster rate than in July.
“The anticipated recovery in the second half of the year is failing to take shape. There were good reasons to be hopeful — lower inflation and higher wages seemed like the perfect recipe for increased consumption. Plus, global industry had started to bounce back, something Germany typically benefits from. But it appears that uncertainty around economic policy has put a damper on consumer spending, while the global manufacturing upswing turned sour before German companies could feel the boost. Instead, the odds of a second straight quarter of negative growth have gone up, meaning we might be back to talking about a recession in Germany soon.
“After such a prolonged slump that began in mid-2022, the renewed optimism among manufacturers seen earlier this year is fading fast. Manufacturers’ expectations towards future output have now been below the long-term average for two consecutive months, mirroring the continuous decline in outstanding orders, which have been shrinking for an uninterrupted 27 months. The anticipated interest rate cuts by the ECB, expected by most analysts, might lift spirits a little, but it’s clear that the overall mood remains poor.”
France August flash services PMI 55.0 vs 50.3 expected
- Latest data released by HCOB – 22 August 2024
- Prior 50.1
- Manufacturing PMI 42.1 vs 44.4 expected
- Prior 44.0
- Composite PMI 52.7 vs 49.1 expected
- Prior 49.1
The headline reading is a 27-month high and that lifts the French economy to post its best performance in terms of business activity since March last year. The big caveat here though is that the services sector is largely boosted by the Paris Olympics. While overall activity was better, there were declines to employment and also output expectations. So, it is likely to be a one-off. HCOB notes that:
“The French economy will likely grow 0.5% in the third quarter. The HCOB France Flash PMI for August indicates an improvement in economic conditions, with the Composite PMI jumping over three index points to 52.7. This can be tracked back exclusively to the service sector, with the business activity index rising almost five points. It should be emphasized that August is likely an outlier due to the Olympic Games. However, the manufacturing sector continues to struggle, with production declining even more sharply than in July.
“Service providers will have benefited from the Olympic Games. The HCOB Flash PMI for French services activity jumped to 55.0, its highest level since the second quarter of 2022 when GDP growth reached 0.4%. The one-off nature of this boost is evident in the worsening employment situation, weaker output expectations and declining backlogs of work.
“French manufacturers are still struggling with weak demand. New orders declined for yet another month and at the fastest pace since the COVID-19 pandemic. Given the decline in new export sales slowed, we can infer that the accelerated drop in total new orders was domestically driven. However, factory prices increased at the quickest rate since March 2023. More fittingly, the manufacturing employment situation worsened for another month, with jobs in the sector being shed by the largest margin since May 2020.
“French companies are facing bleak prospects. The corresponding HCOB Flash PMI for output expectations in the coming twelve months declined almost four index points. This decline was broad-based across the service and manufacturing sectors, but more pronounced in the latter. Service providers may have revised their output expectations lower because business activity was unusually high during July and August, most likely fueled by the Olympic Games.”
UK August flash services PMI 53.3 vs 52.8 expected
- Latest data released by S&P Global – 22 August 2024
- Prior 52.5
- Manufacturing PMI 52.5 vs 52.1 expected
- Prior 52.1
- Composite PMI 53.4 vs 52.9 expected
- Prior 52.8
S&P Global notes that:
“August is witnessing a welcome combination of stronger economic growth, improved job creation and lower inflation, according to provisional PMI survey data.
“Both manufacturing and service sectors are reporting solid output growth and increased job gains as business confidence remains elevated by historical standards.
“Although GDP growth looks set to weaken in the third quarter compared to the impressive gains seen in the first half of the year, the PMI is indicative of the economy expanding at a reasonably solid quarterly rate of around 0.3%.
“Inflationary pressures have meanwhile moderated further in August, including notably in the service sector, which has been a key area of concern for the Bank of England. “The latest survey data therefore help lower the bar for further interest rate cuts, although the still-elevated nature of inflation in the service sector suggests that policymakers will move cautiously.”
UK August CBI trends total orders -22 vs -25 expected
- Latest data released by CBI – 22 August 2024
- Prior -32
ECB accounts: Next meeting widely seen as good time to evaluate policy restrictiveness
- The ECB releases the accounts of its July monetary policy meeting
- Medium-term outlook had not changed overall relative to June meeting
- Short-term outlook has become somewhat more “stagflationary”
- But weaker activity is likely to dampen inflation over time
- Economic balance remains lopsided, mostly still driven by services activity
- Labour market remains tight
- The persistence in services inflation remains the central element shaping the inflation outlook
- Inflation could turn out higher than anticipated if wages increased by more than expected
- Monetary policy transmission was unfolding according to expectations
- Extensive new data will be available by the time September meeting takes place
- The meeting is seen as a good time to re-evaluate the level of monetary policy restriction
- But should be approached with an open mind, which also implies data dependence
Asia-Pacific-World News
PBOC sets USD/ CNY mid-point today at 7.1228 (vs. estimate at 7.1226)
- PBOC CNY reference rate setting for the trading session ahead.
In open market operations:
- PBOC injects bn via 7-day RR, sets rate at 1.7%
- 578bn yuan mature today
- net bn yuan drain today
Australia preliminary August PMI: Manufacturing 48.7(prior 47.5) Services 52.2(prior 50.4)
- Australia Flash PMI from Judo Bank / S&P Global
Preliminary Judo Bank S&P Australian Manufacturing PMI 48.7
- prior 47.5
Services 52.2
- prior 50.4
Composite 51.4
- prior 49.9
The Australian Flash PMI shows improved activity, rising costs in August
- Composite output index up, services sector jumps, manufacturing still weak
- Economy expanding in Q3, labour demand rising
- Service sector input prices hit highest level since March 2023
- Final prices index dipped, suggesting difficulty in passing on costs
- Inflation risks persist despite weak economic growth
- New fiscal stimulus and less restrictive monetary policy raise concerns
- RBA may need to hike further before easing cycle can begin
Survey of Australian firms shows warning of 100K job losses ahead
- Unemployment rate expected to rise to 4.5%
A local media report in Australia on Deloitte survey of 84 chief financial officers from Australia’s top 200 companies:
private sector has entered an external hiring freeze
100,000 extra unemployed expected in the next 12 months
unemployment rate expected to rise to 4.5%
The piece cites the ‘Sahm rule”:
- the indicator takes the average of the unemployment rate for the past three months. If that average increases by 0.5 percentage points above the lowest unemployment rate recorded in the prior 12 months it means the economy has entered a recession or is on the path toward one.
- ” … if we look at the Australian data, if we plug those numbers into the formula, it’s telling us that the rate of increase in Australia’s unemployment rate would be consistent with a pattern that’s heading towards a recession”
Commonwealth Bank of Australia forecast a 25bp September Federal Reserve interest rate cut
- No 50bp Fed Funds reduction
Reuters with the snippet from CBA:
- We favour a 25 bp cut because the U.S. economy is still in good shape
- 50 bp cuts are usually reserved for situations where the economic outlook is under threat
Japan data – August flash Manufacturing PMI 49.5 (prior 49.1) Services 54.0 (prior 53.7)
- S&P Global / Jibun Bank preliminary Japanese PMIs for August 2024
Jibun Bank S&P Global PMI Flash / Preliminary for August 2024 for Japan
Manufacturing PMI 49.5
- prior 49.1
Services 54.0
- prior 53.7
Composite 53.0
- prior 52.5
Commentary from the report, in summary:
- Business Activity: Continued solid expansion in Japanese private sector firms in August 2024.
- Growth Drivers: Services sector activity accelerated; manufacturing output returned to growth after a brief decline in July.
- Demand Trends: Divergence observed; solid rise in new business for services, but subdued demand in the goods-producing sector.
- Business Confidence: Optimism remained above average but eased to a 19-month low due to concerns over labor constraints and rising price pressures.
- Labor and Employment: Service sector faced labor constraints, leading to slower employment growth.
- Price Pressures: Selling price inflation dropped to its lowest since November 2023, despite rising input costs.
- Margin Pressures: Both manufacturers and service sector firms faced margin pressures as they partially absorbed price increases to stay competitive and support sales.
Bank of Korea Gov Rhee says inflation conditions are appropriate for a rate cut
- Bank of Korea Governor Rhee says today’s policy decision was unanimous
Bank of Korea Governor Rhee:
- inflation conditions are appropriate for a rate cut
- today’s on hold policy decision was unanimous
- rising financial stability risks warranted the decision to keep rates on hold today
- Growth forecast cut was due to technical reason and does not signal worsening of growth sentiment
- Will need to coordinate with govt to bring home prices under control
- Four board members said room for rate cut should remain open
Bank of Korea hints at rate cuts to come
- Bank of Korea is South Korea’s central bank
In its statement the Bank dropped the phrase ‘sufficient period of time’ in saying it will maintain a restrictive policy stance. Giving a clue that cuts are on the horizon. but not today.
- The South Korean economy has continued divergence between domestic demand and exports.
- Growth will be affected by the IT industry and recovery in consumption.
- The South Korean economy is expected to continue a moderate growth trend.
- South Korean inflation is likely to continue its slowing trend.
- The inflation path will be influenced by global oil prices, foreign exchange movements, and food prices.
- The Bank of Korea will examine the proper timing of rate cuts.
- It is essential to assess the impact of government measures concerning the housing market.
- The Bank of Korea will monitor household debt growth.
- The Bank of Korea will monitor Seoul housing prices.
- The Bank of Korea will thoroughly assess trade-offs among inflation, growth, and financial stability.
- Confidence is greater that inflation will converge on the target level.
Headlines via Reuters
Bank of Korea leaves its base rate unchanged at 3.5%, as expected
- South Korea’s central bank monetary policy decision for August 2024
Bank of Korea leaves its base rate unchanged for a 13th straight meeting
- at 3.5%
- 38 of 40 analysts surveyed tipped unchanged
Forecasts:
- 2024 growth at 2.4% (vs 2.5% seen in May)
- 2024 inflation at 2.5%
- 2025 growth at 2.1% (vs 2.1% seen in May)
- Sees 2025 inflation at 2.1%
Analyst expectations centre on the October 11 Bank of Korea meeting for a rate cut. Its first rate cut in four years.
The BOK faces offsetting influences:
- rising apartment prices in Seoul, with government plans inn place to increase housing supply to cool prices
- inflation has generally cooled otherwise
- household debt has risen
Cryptocurrency News
Ethereum Faces Selling Pressure Despite Positive Growth Indicators
Ethereum (ETH) shows signs of selling pressure as it experiences its longest ETF outflow streak and increasing exchange net flows. Despite the negative trends, Ethereum co-founder Vitalik Buterin highlights continued growth in key areas.
Market Performance:
- Ethereum (ETH): -1% on Thursday, hovering around current levels
ETF and Exchange Flow Trends:
- ETF Outflows: Ethereum ETFs have faced their longest streak of negative flows, with five consecutive days of outflows totaling $38 million. Grayscale’s ETHE alone saw outflows of $31.1 million, bringing its cumulative total to over $2.5 billion.
- Exchange Flows: Net exchange inflows surged to 31K ETH, marking the highest level since the August 5 market crash, indicating rising selling pressure.
Vitalik Buterin’s Insights:
- Growth Metrics: Buterin shared insights into Ethereum’s growth, citing increased staking decentralization, improved cross-L2 wallet UX, advancements in account abstraction, and mature ZK tooling.
- Fundamentals: Despite market challenges, Buterin asserts that Ethereum’s fundamentals remain robust.
Daily Market Movers:
- ETF Trends: Continued negative flows could indicate ongoing investor concerns.
- Exchange Activity: Rising exchange net flows suggest a shift towards selling pressure.
Ethereum’s technical indicators show a range-bound movement, reflecting mixed sentiments among futures traders and fund investors. While the market faces selling pressure, Ethereum’s underlying metrics highlight its ongoing growth potential.
Ripple Defies SEC Doubts as XRP Holds Steady Near $0.60
Ripple’s XRP holds firm around the $0.60 mark, buoyed by optimism following a recent legal victory. Ripple’s Chief Legal Officer, Stuart Alderoty, confidently declared the firm as the clear winner in its ongoing battle with the SEC.
Market Performance:
- XRP: +4.9% over the past week, trading near $0.60
Legal Battle Highlights:
- Stuart Alderoty’s Comments: Ripple’s CLO claimed a decisive victory in the SEC lawsuit, asserting that Ripple is a clear winner despite the SEC’s counterclaims.
- SEC’s Response: The SEC claimed a victory with a substantial fine, though Ripple’s stance remains positive. Alderoty noted that appeals are unlikely to reverse the outcome, citing a low reversal rate.
Market Sentiment:
- XRP Support: XRP has maintained its position close to key support levels, with positive sentiment from Ripple’s legal victory and upcoming events like Swell 2024, scheduled for October 15-16.
- Ripple’s Confidence: Ripple executives, bolstered by the favorable ruling from Judge Analisa Torres, are optimistic about the future and the legal standing of XRP as a non-security in secondary market transactions.
Daily Market Movers:
- Ripple’s Swell 2024 Event: Announced for October, potentially driving further positive momentum.
Traders are responding to the legal clarity with a boost in confidence, helping XRP hover near the crucial $0.60 support level.
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