🌳 UK Inflation Hits 2% for First Time in Nearly Three Years, but BoE Unlikely to Cut Rates; CertiK Claims Kraken Threatened Staff After Identifying $3 Million Exploit

Macro & TradFi

In May, UK inflation reached the Bank of England's 2% (https://www.reuters.com/markets/europe/uk-inflation-returns-target-first-time-since-2021-2024-06-19/) target for the first time in nearly three years, dropping from April's 2.3%. However, the Bank is unlikely to cut interest rates soon. Services inflation and wage growth remain above desired levels, with services inflation at 5.7% and wage growth at 6%. While an August rate cut remains possible, policymakers are cautious due to persistent domestic price pressures.

Meanwhile, Fitch Ratings has postponed its forecast for China's policy rate cut (https://www.cnbc.com/2024/06/19/fitch-pushes-back-china-rate-cut-as-fed-holds-interest-rates-steady.html) to next year, citing the U.S. Federal Reserve's decision to maintain high interest rates. Fitch now anticipates that China will keep its one-year medium-term lending facility (MLF) at 2.5% this year, with a reduction to 2.25% expected in 2024. This adjustment reflects concerns over the exchange rate against the U.S. dollar and low bank net interest margins. The last MLF rate cut occurred in August 2023, and the People's Bank of China has signaled continued supportive monetary policy.

Lastly, Asian stocks surged to a two-year high, with the MSCI Asia ex-Japan index rising over 1% to its highest level since April 2022. The People's Bank of China is expected to keep its benchmark lending rates unchanged (https://www.reuters.com/markets/asia/china-leaves-lending-benchmark-rates-unchanged-expected-2024-06-20/), following a steady medium-term lending facility (MLF) rate earlier this week. Bank Indonesia is anticipated to maintain its key interest rate at 6.25%, influenced by the rupiah's recent slide to four-year lows against the U.S. dollar. New Zealand's Q1 GDP figures are also in focus, with a forecasted 0.1% growth following a 0.1% contraction in the previous quarter. Asian tech shares continued to perform strongly, inspired by Nvidia's success, with Hong Kong's Hang Seng tech index jumping 3.7%. The yen remains stable near lows that recently prompted intervention from Tokyo, with one-month dollar/yen implied volatility at its lowest since April.

DeFi & CeFi

   •   CertiK identifies Kraken exploit, claims exchange 'threatened' its team

   •   Telecom giant and T-Mobile parent Deutsche Telekom plans to mine bitcoin

   •   ZKsync Era's airdrop fails to halt decline in transactions and active addresses

   •   Nigerian High Court dismisses Binance exec’s suit over detention

   •   Pantera crypto hedge fund to invest $200m in AI

Blockchain security firm CertiK (https://cointelegraph.com/news/certik-kraken-exploit-bug-bounty-white-hat-hackers-threats) has disclosed its role in identifying an exploit on cryptocurrency exchange Kraken, claiming the exchange responded by threatening its employees. According to CertiK, after informing Kraken of a vulnerability that allowed the removal of $3 million worth of digital assets, Kraken's security team demanded repayment of a mismatched amount within an unreasonable timeframe without providing repayment addresses. CertiK's public disclosure aims to defend its actions and transparency, urging Kraken to halt threats against White Hat hackers. The incident has sparked mixed reactions among crypto users, with some questioning CertiK's motives. CertiK has previously highlighted significant vulnerabilities in platforms like Wormhole bridge on Aptos and Telegram.

🌳 UK Inflation Hits 2% for First Time in Nearly Three Years, but BoE Unlikely to Cut Rates; CertiK Claims Kraken Threatened Staff After Identifying $3 Million Exploit

Macro & TradFi

In May, UK inflation reached the Bank of England's 2% (https://www.reuters.com/markets/europe/uk-inflation-returns-target-first-time-since-2021-2024-06-19/) target for the first time in nearly three years, dropping from April's 2.3%. However, the Bank is unlikely to cut interest rates soon. Services inflation and wage growth remain above desired levels, with services inflation at 5.7% and wage growth at 6%. While an August rate cut remains possible, policymakers are cautious due to persistent domestic price pressures.

Meanwhile, Fitch Ratings has postponed its forecast for China's policy rate cut (https://www.cnbc.com/2024/06/19/fitch-pushes-back-china-rate-cut-as-fed-holds-interest-rates-steady.html) to next year, citing the U.S. Federal Reserve's decision to maintain high interest rates. Fitch now anticipates that China will keep its one-year medium-term lending facility (MLF) at 2.5% this year, with a reduction to 2.25% expected in 2024. This adjustment reflects concerns over the exchange rate against the U.S. dollar and low bank net interest margins. The last MLF rate cut occurred in August 2023, and the People's Bank of China has signaled continued supportive monetary policy.

Lastly, Asian stocks surged to a two-year high, with the MSCI Asia ex-Japan index rising over 1% to its highest level since April 2022. The People's Bank of China is expected to keep its benchmark lending rates unchanged (https://www.reuters.com/markets/asia/china-leaves-lending-benchmark-rates-unchanged-expected-2024-06-20/), following a steady medium-term lending facility (MLF) rate earlier this week. Bank Indonesia is anticipated to maintain its key interest rate at 6.25%, influenced by the rupiah's recent slide to four-year lows against the U.S. dollar. New Zealand's Q1 GDP figures are also in focus, with a forecasted 0.1% growth following a 0.1% contraction in the previous quarter. Asian tech shares continued to perform strongly, inspired by Nvidia's success, with Hong Kong's Hang Seng tech index jumping 3.7%. The yen remains stable near lows that recently prompted intervention from Tokyo, with one-month dollar/yen implied volatility at its lowest since April.

DeFi & CeFi

   •   CertiK identifies Kraken exploit, claims exchange 'threatened' its team

   •   Telecom giant and T-Mobile parent Deutsche Telekom plans to mine bitcoin

   •   ZKsync Era's airdrop fails to halt decline in transactions and active addresses

   •   Nigerian High Court dismisses Binance exec’s suit over detention

   •   Pantera crypto hedge fund to invest $200m in AI

Blockchain security firm CertiK (https://cointelegraph.com/news/certik-kraken-exploit-bug-bounty-white-hat-hackers-threats) has disclosed its role in identifying an exploit on cryptocurrency exchange Kraken, claiming the exchange responded by threatening its employees. According to CertiK, after informing Kraken of a vulnerability that allowed the removal of $3 million worth of digital assets, Kraken's security team demanded repayment of a mismatched amount within an unreasonable timeframe without providing repayment addresses. CertiK's public disclosure aims to defend its actions and transparency, urging Kraken to halt threats against White Hat hackers. The incident has sparked mixed reactions among crypto users, with some questioning CertiK's motives. CertiK has previously highlighted significant vulnerabilities in platforms like Wormhole bridge on Aptos and Telegram.