🌳 US Factory Activity Contracts for Third Month; Circle Secures First EU Stablecoin License Under MiCA

Macro & TradFi

In June 2024, U.S. factory activity (https://www.bloomberg.com/news/articles/2024-06-30/euro-gains-on-french-voting-china-eyed-after-pmi-markets-wrap?sref=c1IcpBlQ) continued to contract slightly for the third consecutive month, with the Institute for Supply Management (ISM) reporting a manufacturing index use Daily: 2 July 2024of 48.5, barely changing from May's 48.7. This index remains below the threshold of 50 which indicates expansion. One notable improvement was seen in new orders, which rose nearly 4 points to 49.3, suggesting stabilization in bookings. However, the production index slipped into contraction territory at 48.5, down from 50.2 previously, reflecting ongoing challenges in output. Employment in the sector also declined, suggesting persistent headwinds including high borrowing costs and cautious business investment amidst Federal Reserve policies aimed at maintaining higher interest rates.

Meanwhile, China similarly reported the Caixin Manufacturing PMI (https://www.bloomberg.com/news/articles/2024-07-01/private-gauge-of-china-factory-activity-hits-three-year-high?sref=c1IcpBlQ) yesterday. Despite a strong uptick to 51.8 in June 2024, marking its highest level since May 2021 and signaling expansion, concerns linger over the country's economic outlook. The positive PMI was overshadowed by a significant decline in the gauge measuring company managers' expectations for future output, dropping to its lowest since late 2019. This sentiment reflects ongoing challenges such as insufficient market confidence and subdued domestic demand, exacerbated by a prolonged real estate crisis. While exports remain robust, buoying manufacturing, internal consumption continues to struggle amid deflationary pressures and hesitant consumer spending. These factors show the uneven nature of China's economic recovery, prompting calls for stronger policy measures to support the real estate market and stimulate consumption.

Lastly, U.S. stocks started the third quarter on a positive note yesterday, with gains across major indexes despite concerns over market concentration in tech and the sustainability of AI-driven growth amid expectations for interest rate cuts. The Dow Jones Industrial Average added 0.1%, the S&P 500 rose 0.3%, and the Nasdaq Composite led with a gain of 0.8%. Tesla surged 6.1% ahead of its quarterly delivery report, while Boeing climbed 2.6% on news of its acquisition deal. In the eurozone, European Central Bank President Christine Lagarde indicated that more data is needed before concluding that inflation threats have passed. Additionally, traders will be closely watching commentary from Fed Chair Jerome Powell during a policy panel at the ECB Forum on Central Banking 2024 in Sintra, Portugal, scheduled for 21:30 SGT.

DeFi & CeFi

   •   Circle is now MiCA-compliant

   •   Sony to restart Japanese crypto exchange Whalefin purchased from Amber Group in 2023

   •   Paxos receives full approval from Singapore's central bank to issue stablecoins, partners with DBS Bank

   •   German, U.S. govt's move $150 million in crypto

   •   Silvergate Bank agrees to settle after SEC says the crypto-friendly bank made false statements about AML procedures

   •   US Marshals Service picks Coinbase to custody its assets as part of a $32.5 million contract

🌳 US Factory Activity Contracts for Third Month; Circle Secures First EU Stablecoin License Under MiCA

Macro & TradFi

In June 2024, U.S. factory activity (https://www.bloomberg.com/news/articles/2024-06-30/euro-gains-on-french-voting-china-eyed-after-pmi-markets-wrap?sref=c1IcpBlQ) continued to contract slightly for the third consecutive month, with the Institute for Supply Management (ISM) reporting a manufacturing index use Daily: 2 July 2024of 48.5, barely changing from May's 48.7. This index remains below the threshold of 50 which indicates expansion. One notable improvement was seen in new orders, which rose nearly 4 points to 49.3, suggesting stabilization in bookings. However, the production index slipped into contraction territory at 48.5, down from 50.2 previously, reflecting ongoing challenges in output. Employment in the sector also declined, suggesting persistent headwinds including high borrowing costs and cautious business investment amidst Federal Reserve policies aimed at maintaining higher interest rates.

Meanwhile, China similarly reported the Caixin Manufacturing PMI (https://www.bloomberg.com/news/articles/2024-07-01/private-gauge-of-china-factory-activity-hits-three-year-high?sref=c1IcpBlQ) yesterday. Despite a strong uptick to 51.8 in June 2024, marking its highest level since May 2021 and signaling expansion, concerns linger over the country's economic outlook. The positive PMI was overshadowed by a significant decline in the gauge measuring company managers' expectations for future output, dropping to its lowest since late 2019. This sentiment reflects ongoing challenges such as insufficient market confidence and subdued domestic demand, exacerbated by a prolonged real estate crisis. While exports remain robust, buoying manufacturing, internal consumption continues to struggle amid deflationary pressures and hesitant consumer spending. These factors show the uneven nature of China's economic recovery, prompting calls for stronger policy measures to support the real estate market and stimulate consumption.

Lastly, U.S. stocks started the third quarter on a positive note yesterday, with gains across major indexes despite concerns over market concentration in tech and the sustainability of AI-driven growth amid expectations for interest rate cuts. The Dow Jones Industrial Average added 0.1%, the S&P 500 rose 0.3%, and the Nasdaq Composite led with a gain of 0.8%. Tesla surged 6.1% ahead of its quarterly delivery report, while Boeing climbed 2.6% on news of its acquisition deal. In the eurozone, European Central Bank President Christine Lagarde indicated that more data is needed before concluding that inflation threats have passed. Additionally, traders will be closely watching commentary from Fed Chair Jerome Powell during a policy panel at the ECB Forum on Central Banking 2024 in Sintra, Portugal, scheduled for 21:30 SGT.

DeFi & CeFi

   •   Circle is now MiCA-compliant

   •   Sony to restart Japanese crypto exchange Whalefin purchased from Amber Group in 2023

   •   Paxos receives full approval from Singapore's central bank to issue stablecoins, partners with DBS Bank

   •   German, U.S. govt's move $150 million in crypto

   •   Silvergate Bank agrees to settle after SEC says the crypto-friendly bank made false statements about AML procedures

   •   US Marshals Service picks Coinbase to custody its assets as part of a $32.5 million contract