Round up of today's market news *

North American News

September Kicks Off with a Jarring Drop: Nvidia’s Record Market Cap Destruction Leads US Equity Rout

Historic Losses in Nvidia Fuel a Grim Start to September for US Markets

September began on a harsh note for the US equity markets, marked by Nvidia’s staggering market cap destruction, the largest ever recorded. The tech sector, particularly semiconductor stocks, bore the brunt of the sell-off, leading to significant declines across major indices.

Market Overview:

Nvidia’s Dramatic Decline: Nvidia shares plummeted by 9.53%, closing below the critical 100-day moving average at $110.34. The drop resulted in nearly $280 billion being wiped off Nvidia’s market cap, as investors grapple with concerns about slowing progress in artificial intelligence (AI) and weaker-than-expected earnings.
Chip Sector Slump: The semiconductor sector was hard-hit, with notable declines:
- Micron: -7.96%
- Broadcom: -6.16%
- AMD: -7.83%
- Intel: -8.80%

Major Indices Performance:

Dow Jones Industrial Average: Fell by 626.15 points, or 1.51%, closing at 40,936.94. This marked its worst day since August 1.
S&P 500: Dropped by 119.47 points, or 2.12%, ending at 5,528.92. The index experienced its worst trading day since August 5.
NASDAQ Composite: Tumbled by 577.33 points, or 3.26%, to 17,136.30, its steepest decline since August 5.
Russell 2000: Declined by 68.42 points, or 3.09%, closing at 2,149.21, also marking its worst trading day since August.

Economic Data and Market Sentiment:

Weaker Economic Data: The S&P Global PMI, ISM PMI, and US construction spending data all came in below expectations, exacerbating the market’s negative sentiment and contributing to the day’s steep losses.
Upcoming Jobs Data: US jobs data due Friday is anticipated to show an increase to 164K from 114K last month, with the unemployment rate expected to drop slightly to 4.2% from 4.3%.

Seasonal Trends:

September Weakness: Historically, September is a weaker month for equities, and today’s performance underscores this trend.

The US stock markets are grappling with a confluence of factors, including disappointing economic data, sector-specific turmoil, and traditional seasonal weakness. As investors brace for Friday’s jobs report, the volatility and uncertainty in the market continue to mount.

Atlanta Fed Q3 GDPNow 2.0% vs 2.5% prior

Atlanta Fed GDP tracker slides

Prior was 2.5%

In their own words:

“After this morning’s releases from the US Census Bureau and the Institute for Supply Management, the nowcasts of third-quarter real personal consumption expenditures growth and third-quarter real gross private domestic growth decreased from 3.8 percent and -0.1 percent, respectively, to 3.3 percent and -0.6 percent.”

US August ISM manufacturing index 47.2 vs 47.5 expected

US ISM manufacturing for August 2024

Prior was 46.8
Prices paid 54.0 versus 52.9 prior
Employment 46.0 versus 43.4 prior
New orders 44.6 versus 47.4 prior (lowest since May 2023)
Production 44.8 versus 45.9 prior
Supplier deliveries 50.5 versus 52.6 prior
Inventories 50.3 versus 44.5 prior
Backlog of orders 43.6 versus 41.7 prior
New export orders 48.6 versus 49.0 prior
Imports 49.6 versus 48.6 prior

The new orders number is dreadful and underscores the forward-looking weakness in the manufacturing survey from S&P Global

Comments in the report:

“A noticeable slowdown in business activity. Staffing and production rationalization has been triggered. Previous optimism about future growth has been dashed.” [Chemical Products]
“Backlog has dropped in half as invoicing remains strong, but orders have slowed significantly. Hoping to see orders pick back up for the fourth quarter and into 2025 but expect third quarter to remain slow for incoming orders.” [Transportation Equipment]
“After a slow start and lower year-over-year sales volume during the first half of the year, we are now seeing a mild increase in year-over-year sales volume, along with more steady growth.” [Food, Beverage & Tobacco Products]
“Business outlook is good. Recovery from the electronics slowdown is strong for the second half of the year.” [Computer & Electronic Products]
“New order intake is sluggish at best. Interestingly, even though orders are down, inquiries are up. Customers have indicated capital has been approved for equipment purchases, but they were directed to put projects on hold until the fourth quarter of 2024. This indicates the uncertainty around the election. We anticipate a strong end of the year, with a rise in backlog going into 2025.” [Machinery]
“Our order levels are on a slow, steady decline; it looks like the trend will continue through the end of the year. We are downsizing through attrition and not hiring backfills, but there have been no layoffs to date. The bright spot is a few customer programs have helped increase orders for parts, resulting in some production areas to be very busy while others have little work. Redeploying people where we can.” [Fabricated Metal Products]
“New orders continue to be strong, and inventories are slightly down as a result. Supplier lead times seem to be creeping back up in certain categories.” [Miscellaneous Manufacturing]
“Business is cooling down, and we don’t expect a rebound until after the election is over. As we build our 2025 budget, we continue to have deep concerns about the added environmental costs on energy.” [Paper Products]
“Order book remains strong for now. We are preparing for a slowdown in U.S. auto sales. We are running overtime to keep pace, as hiring hourly employees has been difficult. Some walk off the job within hours because they cannot handle factory work.” [Primary Metals]
“High interest rates are curtailing consumer spending on large discretionary spending for furniture, cabinetry, flooring and decorative trim, which has affected our industry sales potential. At the same time, pent-up demand seems to be growing for housing and remodeling. Interest rate cuts may not happen soon enough to have an impact this year.” [Wood Products]

US August final S&P Global manufacturing PMI 47.9 vs 48.0 prelim

The final look at August manufacturing from S&P Global

Prelim was 48.0
July final was 46.8
Production declines for first time in 7 months
New orders fall at fastest pace since June 2023
Employment drops for first time this year
Input cost inflation accelerates to 16-month high

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:

“A further downward lurch in the PMI points to the manufacturing sector acting as an increased drag on the economy midway through the third quarter. Forward- looking indicators suggest this drag could intensify in the coming months.

“Slower than expected sales are causing warehouses to fill with unsold stock, and a dearth of new orders has prompted factories to cut production for the first time since January. Producers are also reducing payroll numbers for the first time this year and buying fewer inputs amid concerns about excess capacity.

“The combination of falling orders and rising inventory sends the gloomiest forward-indication of production trends seen for one and a half years, and one of the most worrying signals witnessed since the global financial crisis.

“Although falling demand for raw materials has taken pressure off supply chains, rising wages and high shipping rates continue to be widely reported as factors pushing up input costs, which are now rising at the fastest pace since April of last year.”

US construction spending for July -0.3% versus -0.1% expected

US construction spending for July 2024

Prior month -0.3%

Total Construction: Down for the month. Still higher on the year.

Seasonally adjusted annual rate: $2,162.7 billion (-0.3% below June estimate)

+6.7% above July 2023 estimate
Year-to-date (first 7 months): $1,237.5 billion (+8.8% above same period in 2023)

Private Construction: Lower on the month and the year

Seasonally adjusted annual rate: $1,678.7 billion (-0.4% below June estimate)
Residential Construction:
- Seasonally adjusted annual rate: $941.6 billion (-0.4% below June estimate). Up 7.7% YoY
Nonresidential Construction:
- Seasonally adjusted annual rate: $737.2 billion (-0.4% below June estimate). Up 4.5% YoY.

Public Construction:

Seasonally adjusted annual rate: $484.0 billion (+0.1% above June estimate). Up 8.1% YoY
Educational Construction:
- Seasonally adjusted annual rate: $100.8 billion (-0.9% below June estimate).Up 3.6% YoY
Highway Construction:
- Seasonally adjusted annual rate: $140.9 billion (-0.8% below June estimate). Up 3.7% YoY.

Former Fed Pres. Mester on CNBC:There will be a discussion on 25 or 50 bps at FOMC meeting

Former Cleveland Fed Pres. Mester on CNBC:
Jobs work is going to be an important piece of the puzzle
There will be a discussion on whether they want to start with a 25 or 50 basis point cut
Fed will likely indicate what is the path on rate cuts going forward
Jobs market has been moderating from a quite tight condition
Powell said atJackson Hole that he would not want to go much weaker than the where they are now on employment
The Fed wants a strong labor market. Having a strong jobs report is a good thing for the committee.
Inflation has come down and it’s time to start to bring the policy right down.
The Fed does look at financial conditions and part of that is what goes on in the equity market, but it is just a piece of the financial conditions.
Politics does not enter the room
The Fed is focused on the dual mandates
The Fed will be criticized either way on what they do. They have to be focused on their mandate.

UBS on all time highs in equity markets – “record highs aren’t the same as market peaks”

An interesting snippet from research published by UBS on buying stocks making all time highs

Via UBS come some interesting points with the S&P 500 only around 1% from a record high.

The note looks at the S&P 500 total returns (i.e. price gain plus dividends) from 1945, and points out the drawdown % risks from buying at random starting points:

in 28% of cases an investor buying at a random time would at no future point have seen their investment (including dividends) trade in the red
in just over 50% of cases an investor would at no point have seen their investment fall more than 5%
in 19% of cases they would have seen what UBS call a ‘personal bear market’ of a greater-than-20% loss

UBS then cover the percentages when an investor buys at a record high:

in 32% of cases an investor would at no point have seen their investment (including dividends) trade at a loss
in 15% of cases would an investor have seen their investment experience a greater-than-20% fall

That 15% compares favourably with 19% when buying was done at random. Of course, this is since 1945, so you may quibble with sample size. Also, this is the S&P 500, other indexes will differ.

UBS add:

It might be counterintuitive that all-time highs are often followed by further gains
but record highs aren’t the same as market peaks
For every 2000 or 2007, when buying in at all-time highs would have subsequently felt like a bad idea, there have been many more times, like 1982, 1992, 1995, 2013, 2016, mid-2020, and early 2024, when investors were rewarded for keeping faith.

Canadian S&P global manufacturing PMI for August 49.5 versus 47.8 last month

Canadian S&P global manufacturing PMI for August 2024

Prior month 47.8
S&P global manufacturing PMI for August 49.5 versus 47.8 last month

Below are the main points:

Canada’s Manufacturing Economy:

Operating conditions continued to deteriorate in August, but at a marginal and softest degree since March.
Slower falls in output and new orders were reported.
Job shedding returned after marginal growth in July.

Challenges:

Shipping delays, especially ocean freight, led to vendor performance deterioration.
Input cost inflation accelerated to its sharpest since April 2023.
Output charges increased at the steepest rate in nine months.

Key Indicators:

S&P Global Canada Manufacturing PMI registered 49.5 in August, below the 50.0 no-change mark for the 16th successive month.
Weaker contractions in output and new orders were reported.
New export orders declined for the 12th successive month.

Employment and Sentiment:

Firms cut staffing levels due to reduced production requirements and hesitant clients.
Confidence in the outlook remained positive but below trend.
Concerns over demand impact from elevated prices and high interest rates persisted.

Price Pressures:

Input price inflation accelerated due to higher input prices, unfavourable exchange rate movements, and high shipping costs.
Manufacturers raised their charges to the greatest degree since last November.

Supply Chain:

Sea freight delays continued, with low inventories at suppliers.
Average lead times deteriorated to the greatest degree in 18 months.
Firms bolstered input stocks to mitigate risks, with input inventories rising modestly.

Commenting on the latest survey results, Paul Smith, Economics Director at S&P Global Market Intelligence said:

“Although the performance of Canada’s manufacturing economy continues to disappoint, slower falls in output and new orders point to a relatively better performance in July than in August, thereby providing some hope of the sector heading towards stabilisation after a prolonged downturn. Still, reduced employment and cuts in purchasing activity point to continued uncertainty amongst firms, and this was reflected in their assessment of the outlook, with confidence remaining below its trend level. Firms continue to worry about price levels, and in this regard the latest data on inflation remained concerning. Cost pressures picked up to their highest in nearly a year-and-a-half year, whilst output charge inflation accelerated noticeably.”

Commodities

Gold Retreats as Weak US Data Favors Stronger Dollar Amid Economic Slowdown

Gold Declines Despite Dollar Strength: Economic Slowdown Weighs on Precious Metal

Gold prices fell on Tuesday as traders returned from the Labor Day holiday, with the yellow metal trading at $2,490, down 0.34%. The decline comes despite a stronger US Dollar, buoyed by recent economic data that hinted at a slowdown.

Key Factors Influencing Gold:

US Economic Data: The Institute for Supply Management (ISM) reported that the August Manufacturing PMI remained below the critical 50-line, indicating continued contraction. However, the slight improvement in the employment sub-component provided some relief, easing concerns about labor market weakness.
Interest Rate Expectations: Markets are pricing in a 65% chance of a 25 basis point (bps) rate cut by the Federal Reserve in September, according to the CME FedWatch Tool. This anticipated rate cut is seen as a potential headwind for the US Dollar and a tailwind for gold, although the yellow metal only briefly recovered from a dip to $2,473.

Outlook and Market Movers:

Upcoming Data: The US economic calendar will be busy this week with the release of JOLTS job openings, ADP National Employment Change, and Nonfarm Payrolls (NFP) figures. Key expectations include a drop in JOLTS job openings to 8.10 million and an increase in private hiring to 150K.
Analysts’ Views: Analysts at Commerzbank note that if the US jobs report indicates significant weakness, it could reignite speculation about a recession and faster rate cuts, which would further support gold prices.

The intersection of economic data, interest rate expectations, and market sentiment continues to shape gold’s performance, with upcoming economic reports likely to play a pivotal role in its near-term trajectory.

Oil Prices Plunge to January Lows as WTI Crude Nears $70

WTI Crude Drops 4% Amidst Production Hikes and Economic Uncertainty

Oil markets are grappling with a severe decline today, with WTI crude oil falling by $3.03 to $70.52 per barrel. This represents the lowest level since January 17 and brings the commodity dangerously close to the $60 mark.

Key Drivers Behind Today’s Decline:

OPEC+ Production Increase: Reports suggest that OPEC+ is poised to proceed with its planned gradual increase in production starting October, putting additional pressure on prices.
China PMI Data: The latest China PMI reading of 49.1, below the expected 49.5, reflects ongoing economic challenges and further dampens oil demand outlook.
Libyan Production Resumption: News of a potential deal to resolve the Libyan production and export dispute adds to the bearish sentiment.

The current downturn is compounded by a broader risk aversion in financial markets, with the Nasdaq down nearly 2% and most global commodities facing similar pressures. September and October are historically weak months for oil, and this year is proving no exception.

Technically, the fresh lows add pressure, with immediate support now at $70.00. The next significant support level is the December 2023 low of $67.71, highlighting a critical juncture for oil prices in the coming days.

Gold: Nearly half of trend followers positions to be liquidated – TDS

For the first time in months, CTAs could start liquidating Gold in a downtape over the coming week, reinforcing the set-up for our tactical short. Alternative takes on the positioning set-up are of the view that Western money managers can continue to increase their length, underscored by a naked read of CFTC positioning data which suggests speculator positioning is only a touch frothy and well below its historical maximum, TDS commodity analyst Daniel Ghali notes.

Possible CTA selling activity to start over the coming week

“Our advanced positioning analytics, however, provide an edge on this read. Our point of contention: accounting for the leverage context suggests it is already effectively maxed out. CTAs’ and risk parity portfolios’ positioning is constrained by the leverage environment, which explains why we believe the CFTC data has already effectively reached a local maximum even though it remains below its historical max.”

“Macro fund positioning is also effectively maxed out. This positioning remains statistically consistent with more than 400bps of Fed cuts over the coming year, and is at levels that marked local highs in several previous cycles, followed by drawdowns in the 7%-10% range.”

“With several cohorts simultaneously vulnerable, a continued downtape in Gold can finally start to catalyze CTA selling activity over the coming week, reinforcing our view that the first cohort to blink can snowball subsequent selling activity. After all, we estimate that nearly half of trend followers positions will be liquidated in a revisit towards $2400/oz. Downside risks are now more potent.”

EU News

European equities closes down

European equity markets down around 1%

Stoxx 600 -1.1%
German DAX -0.9%
Francis CAC -0.9%
UK’s FTSE 100 -0.8%
Spain’s IBEX -1.1%
Italy’s FTSE MIB -1.4%

Switzerland August CPI +1.1% vs +1.2% y/y expected

Latest data released by the Federal Statistics Office – 3 September 2024

Prior +1.3%
Core CPI +1.1% y/y
Prior +1.1%

Switzerland Q2 GDP +0.7% vs +0.5% q/q expected

Latest data released by the Federal Statistics Office – 3 September 2024

Prior +0.5%

UK data – British Retail Consortium (BRC) total sales in August, the strongest since March

Like-for-like sales up also

British Retail Consortium (BRC) total sales in August +1.0% y/y vs +0.5% in July

BRC Like-for-like sales +0.8% y/y vs +0.3% in July

Barclaycard UK August consumer spending +1.0% y/y (after declining the previous two months)

chief UK economist at Barclays, said its survey supported its view that consumers would increasingly support the economy, which had been reliant on government spending for growth. “Growing real incomes and strengthening consumer confidence should combine with falling interest rates to increasingly allow consumers to put their spending power to work”

ECB’s Nagel says he won’t commit in advance of September rate move

Nagel plays coy

The great inflation wave is over
Won’t commit in advance on whether he will support a rate cut in Sept

ECB’s Simkus: Quite unlikely that we will cut rates in October

Hawkish comments from Simkus

For the cut in September I see a quite clear case. For cutting in October or by more than 25bp, I find it quite unlikely.
No strong argument for 50bp cut despite weakening economy
Market implied chances of an October cut are around a 40% probability
“The fact that the market now attaches a fairly high probability to an October cut does not correspond to the data, in my view”
Inflation converging to 2% target in second half of 2025
ECB not behind the curve; policy aligned with data
What’s clear is we have quite sluggish economic developments; if you exclude Ireland with its volatile data, growth in the second quarter was basically flat.

ICYMI – A growing rift at the ECB

A September rate cut is pretty much locked in … but what comes after is up for debate

doves are arguing that the economy is much weaker than thought, which could accelerate a weakening in price pressures
hawks are arguing that they must see things through until the inflation target is met

Asia-Pacific-World News

China to launch anti-dumping investigation into Canadian chemical products

This comes after Canada imposed 100% tariffs on China EVs last week

These will also include canola imports as well as rapeseed, with the latter being a major export for Canada to China. The retaliatory move by China comes after the Canadian government announced a decision to impose 100% tariffs on Chinese EVs last week. They also decided to impose an additional 25% tariff on some aluminum products from China, starting from 15 October.

Here’s a positive view on China – the worst is in the rear-view mirror

A positive outlook from Japan’s Sumitomo Mitsui DS Asset Management

Japan’s Sumitomo Mitsui DS Asset Management argues that the worst is now behind for China. This snippet in brief.

Analysts at the firm hold a positive outlook, citing:

Chinese equities are attractively valued
The worst is now behind China, even if the property market may take longer than expected to recover significantly

PBOC sets USD/ CNY central rate at 7.1112 (vs. estimate at 7.1120)

PBOC CNY reference rate setting for the trading session ahead.

In open market operations (OMOs):

PBOC injects 1.2bn via 7-day RR, sets rate at 1.7%
472 bn mature today
thus a net drain of 471bn yuan in OMOs

China warns of severe economic retaliation against Japan re chipmaking curbs

Japan cranked up restrictions in July

Bloomberg carried the report overnight. Bloomberg is gated, but in brief.

In July, Japan started restricting exports of 23 types of semiconductor manufacturing equipment, aligning with U.S. efforts to limit China’s ability to produce advanced chips. China has responded by warning Japan of significant economic consequences if Japan further limits the sales and servicing of chipmaking equipment to Chinese companies.

Toyota Motor privately informed Japanese officials that China might retaliate by restricting Japan’s access to minerals necessary for car manufacturing.
Chinese officials have repeatedly communicated this stance to their Japanese counterparts in recent meetings.
China’s foreign ministry expressed opposition to actions that disrupt global supply chains, politicize economic cooperation, and impose technological blockades against China.
China stated its commitment to maintaining global production and supply chain stability while implementing fair export control measures.

Australian data – Q2 net export contribution to GDP +0.2% (expected 0.6%)

The net export contribution to GDP is a key input to the Q2 economic growth data that is due on Wednesday 4 September.

Current Account data from Australia for the April to June quarter of 2024

Australia Current Account AUD -10.7bn, a huge miss

expected -5.0bn, prior -4.9bn

Australia Net Exports Contribution 0.2% … a big miss and a big hit to Q2 GDP

expected 0.6% prior -0.9%

Public sector demand will add approximately 0.4% to Q2 GDP.

Australian weekly survey shows inflation expectations eased to the lowest since late 2021

ANZ-Roy Morgan Consumer Confidence weekly survey

The weekly survey of consumer sentiment rose to 83.1

ANZ note:

ANZ-Roy Morgan Consumer Confidence rose 0.5pts
Inflation expectations eased to 4.6%, its lowest point since late 2021
Household confidence in the future financial situation rose to a 5mth high, back into positive territory

New Zealand GDT Price Index -0.4%

The latest dairy auction results

Prior was +5.5%
Avg prices $3,833/MT
Whole milk powder -2.5%

New Zealand data: Q2 2024 Terms of trade +2.1% q/q (expected +2.0%)

New Zealand export and import prices data for the April, May and June quarter of 2024

Terms of trade +2.1% q/q

expected +2.0%, prior +5.1%
for the y/y, -1.6%

Export Prices +5.2% q/q

expected +2.8%, prior -0.3%
for the y/y prices of exports -1.0%
export volumes -4.3% q/q

Import Prices +3.1%

expected +0.5%, prior -5.1%
for the y/y prices of imports +0.7%
import volumes +3.2% q/q

Japan will spend nearly a trillion yen to cover energy subsidies

989 bn JPY

Cost of living pressures in Japan from high energy prices prompting government sup[port measures.

Japan will spend about 989bn yen from reserve funds to cover energy subsidies

Bank of Korea sees inflation maintaining its current stable trend for the time being

South Korea’s central bank said on Tuesday that consumer inflation was expected to maintain the current stable trend for the time being.

The Bank of Korea said inflation was stabilising more quickly than in other major economies, in a statement released after data showed inflation reached the central bank’s target in August.

South Korea’s Vice Finance Minister says inflation expected to stabilise in lower 2% range

South Korean CPI data came in subdued in data published earlier

South Korea’s Vice fin min comments after data showed consumer inflation hits its weakest in nearly three-and-a-half years.

South Korea’s headline CPI in August has risen at its slowest y/y pace since March 2021

South Korea August inflation data

August consumer price index +2.0% y/y (expected +2.0%)

Consumer price index +0.4% m/m (expected +0.3%)
Core CPI +2.1% y/y vs +2.2% in July
Consumer price index marks slowest rise y/y since March 2021
Core CPI marks slowest rise y/y since November 2021

Info comes via Reuters, the slowing pace of inflation continues globally.

Cryptocurrency News

Ethereum Exchange Reserves Surge by 163K ETH Amid Divergent On-Chain Signals

ETH Faces Selling Pressure as Exchange Reserves Rise; New Holders Show Optimism

Ethereum (ETH) is experiencing a notable downturn, down over 2% on Tuesday, driven by a sharp increase in its exchange reserves. This uptick, however, comes against a backdrop of mixed signals from other on-chain indicators.

Key Highlights:

Exchange Reserve Surge: Ethereum’s exchange reserve has surged by 163K ETH (approximately $407.5 million) in the past five days. This increase suggests heightened selling pressure, which could weigh on ETH’s short-term performance.
Growing Holder Base: Despite the price decline, Ethereum has added over 4 million new holders in the last three months, bringing the total number of ETH holders to nearly 127 million. This growth in new wallets indicates long-term optimism among investors.
Whale Activity Decline: Whale transaction activity has significantly dropped from its peak earlier in the year. The count of whale transactions has decreased from over 115K in mid-March to just 31.8K in late August. This reduced activity is associated with lower volatility in ETH’s price, aside from notable market events like the May surge and August crash.

Technical Outlook: Ethereum’s price is consolidating around $2,400, a critical support level. Should the current trend in exchange reserves reverse, ETH could find support near this level. The growing number of new holders contrasts with the recent decline in whale activity, reflecting a divergence in market sentiment.

Overall, while the increase in exchange reserves suggests potential short-term selling pressure, the rising number of new holders and the technical support level indicate that ETH might experience a rebound if these conditions stabilize.

XRP Passes Key Resistance as Ripple Unveils Ethereum-Compatible Smart Contracts

Ripple’s Move: Ethereum-Compatible Smart Contracts and Expanded Functionality

Ripple (XRP) has surged past significant resistance levels, breaking above $0.57 early Tuesday and holding steady above $0.56, amidst exciting new developments for the XRP Ledger.

Key Developments:

Ethereum-Compatible Smart Contracts: Ripple plans to integrate Ethereum-compatible smart contracts onto the XRP Ledger through a new sidechain. This upgrade will enable Ripple to support more complex applications, including decentralized exchanges and token issuance.
Axelar Network Integration: To facilitate cross-chain interoperability, Ripple will use the Axelar network. Wrapped XRP (eXRP) will serve as the primary token on the sidechain, enhancing the ability to transfer tokens across different blockchains seamlessly.
New Partnerships and Initiatives: Ripple has also announced collaborations in the AI and metaverse spaces with Futureverse, which will manage metaverse-related assets for Ripple. Additionally, the University Blockchain Research Initiative has welcomed Korea’s Yonsei University as a new global partner, bolstering Ripple’s commitment to advancing blockchain technology.

Technical Analysis: XRP has experienced a modest 0.75% decline on Tuesday but maintains its position above the crucial support level of $0.56. The successful breach of resistance and the upcoming functionality enhancements through Ethereum-compatible smart contracts mark a significant step forward for Ripple’s ecosystem.

This strategic move aims to broaden Ripple’s application potential, potentially driving further interest and investment in XRP.

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Round up of today’s market news

ByBilals Tech