🌳 US Jobless Claims Surge as Labor Market Softens; Italy Issues $27.2M Digital Bond on Polygon

Macro & TradFi

Initial jobless claims (https://www.bloomberg.com/news/articles/2024-07-18/us-initial-jobless-claims-increase-by-more-than-forecast?embedded-checkout=true) in the US surged by 20,000 last week to 243,000, marking the largest increase since early May and matching the highest level since August 2023. Continuing claims also rose by 20,000 to 1.87 million, the highest since late 2021. This data indicates a softening labor market, with employers tempering the pace of hiring and the US unemployment rate climbing to 4.1% last month, the highest since 2021. The slowdown in the job market, coupled with recent moderation in inflation, bolsters the case for potential Federal Reserve interest rate cuts in the coming months. Additionally, the four-week moving average of initial claims edged up to 234,750, reflecting broader trends of a cooling labor market.

In other news, the European Central Bank (ECB) (https://www.ft.com/content/c97ce66b-20f9-4289-8eda-4adba833ffa9) has maintained its main interest rate at 3.75%, with President Christine Lagarde stating that the decision on a potential rate cut in September remains "wide open." This decision aligns with market expectations, amidst concerns that geopolitical uncertainty and rapid wage increases may continue to drive inflation. Lagarde emphasized the need for more evidence that inflation, which peaked at 10.6% in 2022 and slowed to 2.5% in June, is on track to reach the ECB's 2% target by the end of next year. Despite recent data supporting this scenario, services inflation remains a concern, potentially delaying a rate cut. The ECB aims to maintain high rates to ensure inflation targets are met, while the Eurozone faces slower economic growth and wage pressures. Market reactions include a decline in the euro against the dollar, and traders now estimate a 65% chance of a September rate cut.

US stocks tumbled on Thursday as large tech shares continued their retreat, with the S&P 500 dipping by 0.78%, the Nasdaq by 0.70%, and the Dow Jones Industrial Average by 1.29%. United Airlines shed 1.2% after reporting higher profits for the second quarter but announced plans to reduce capacity later in 2024 due to an excess of flights in the US market. Conversely, DR Horton jumped 10% following higher profits and revenues. Domino’s Pizza shares plunged over 13% despite exceeding earnings estimates with $4.03 per share versus an estimated $3.68, as revenue met expectations at $1.1 billion, but U.S. comparable store sales grew slightly less than anticipated. Investors are now eyeing the upcoming US GDP advancement report next Thursday and Core PCE data due next Friday. Additionally, investors will look for the morning briefing on the results of China's Third Plenum meeting, scheduled around 10:00 SGT today.

DeFi & CeFi

   •   Italy’s state-owned bank issues digital bond on Polygon

   •   Li.Fi releases incident report following the $11M hack

   •   Animoca and Standard Chartered team up in HKMA stablecoin sandbox

   •   BitGo integrates Stacks for Bitcoin rewards

   •   Pixelverse PIXFI token rises 50% after airdrop

Italy’s state-owned Cassa Depositi e Prestiti SpA has completed a $27.2 million digital bond issuance (https://cointelegraph.com/news/italian-bank-27-million-dollar-digital-bond-transfer-on-polygon) using Ethereum layer-2 Polygon, in collaboration with Intesa Sanpaolo. This trial, part of an initiative by the European Central Bank, explores blockchain solutions for central bank money settlement in wholesale transactions. The bond, with a 3.63% annual coupon and a four-month maturity, was settled the same day through the Bank of Italy's "TIPS Hash Link" tool, demonstrating the efficiency and safety of public blockchains in financial transactions. This fundraise aligns with broader industry trends toward blockchain tokenization, despite some skepticism about its scalability.

🌳 US Jobless Claims Surge as Labor Market Softens; Italy Issues $27.2M Digital Bond on Polygon

Macro & TradFi

Initial jobless claims (https://www.bloomberg.com/news/articles/2024-07-18/us-initial-jobless-claims-increase-by-more-than-forecast?embedded-checkout=true) in the US surged by 20,000 last week to 243,000, marking the largest increase since early May and matching the highest level since August 2023. Continuing claims also rose by 20,000 to 1.87 million, the highest since late 2021. This data indicates a softening labor market, with employers tempering the pace of hiring and the US unemployment rate climbing to 4.1% last month, the highest since 2021. The slowdown in the job market, coupled with recent moderation in inflation, bolsters the case for potential Federal Reserve interest rate cuts in the coming months. Additionally, the four-week moving average of initial claims edged up to 234,750, reflecting broader trends of a cooling labor market.

In other news, the European Central Bank (ECB) (https://www.ft.com/content/c97ce66b-20f9-4289-8eda-4adba833ffa9) has maintained its main interest rate at 3.75%, with President Christine Lagarde stating that the decision on a potential rate cut in September remains "wide open." This decision aligns with market expectations, amidst concerns that geopolitical uncertainty and rapid wage increases may continue to drive inflation. Lagarde emphasized the need for more evidence that inflation, which peaked at 10.6% in 2022 and slowed to 2.5% in June, is on track to reach the ECB's 2% target by the end of next year. Despite recent data supporting this scenario, services inflation remains a concern, potentially delaying a rate cut. The ECB aims to maintain high rates to ensure inflation targets are met, while the Eurozone faces slower economic growth and wage pressures. Market reactions include a decline in the euro against the dollar, and traders now estimate a 65% chance of a September rate cut.

US stocks tumbled on Thursday as large tech shares continued their retreat, with the S&P 500 dipping by 0.78%, the Nasdaq by 0.70%, and the Dow Jones Industrial Average by 1.29%. United Airlines shed 1.2% after reporting higher profits for the second quarter but announced plans to reduce capacity later in 2024 due to an excess of flights in the US market. Conversely, DR Horton jumped 10% following higher profits and revenues. Domino’s Pizza shares plunged over 13% despite exceeding earnings estimates with $4.03 per share versus an estimated $3.68, as revenue met expectations at $1.1 billion, but U.S. comparable store sales grew slightly less than anticipated. Investors are now eyeing the upcoming US GDP advancement report next Thursday and Core PCE data due next Friday. Additionally, investors will look for the morning briefing on the results of China's Third Plenum meeting, scheduled around 10:00 SGT today.

DeFi & CeFi

   •   Italy’s state-owned bank issues digital bond on Polygon

   •   Li.Fi releases incident report following the $11M hack

   •   Animoca and Standard Chartered team up in HKMA stablecoin sandbox

   •   BitGo integrates Stacks for Bitcoin rewards

   •   Pixelverse PIXFI token rises 50% after airdrop

Italy’s state-owned Cassa Depositi e Prestiti SpA has completed a $27.2 million digital bond issuance (https://cointelegraph.com/news/italian-bank-27-million-dollar-digital-bond-transfer-on-polygon) using Ethereum layer-2 Polygon, in collaboration with Intesa Sanpaolo. This trial, part of an initiative by the European Central Bank, explores blockchain solutions for central bank money settlement in wholesale transactions. The bond, with a 3.63% annual coupon and a four-month maturity, was settled the same day through the Bank of Italy's "TIPS Hash Link" tool, demonstrating the efficiency and safety of public blockchains in financial transactions. This fundraise aligns with broader industry trends toward blockchain tokenization, despite some skepticism about its scalability.