Group 2 4 8

almost 3 years ago

UK wage growth and employment ⚠️ Excluding bonus: 7.8% (Exp. 7.4%, Prev. 7.5%) • This is the HIGHEST since comparable records began in 2001 Including bonus: 8.2% (Exp. 7.3%, Prev. 7.2%) • Including bonus was exacerbated by NHS once off bonuses paid in June The report shows ridiculously hot wage growth figures However, it may not be as rosy as it seems on the surface for the UK job market. Employment data paints a weaker picture: Employment change: -66K (Exp. 75K, Prev. 102K) The first negative employment change print since August 2022 Claimant count (like jobless claims): 29K (Exp. -7.3K, Prev. 16.2K) Unemployment rate: 4.2% (Exp. 4%, Prev. 4%) The report states that unemployment growth was driven by people unemployed for 6 months or less, suggesting an influx of newly unemployed. Job openings also fell on the quarter fell for the 13th consecutive time - Hot wage growth has exacerbated worries that the Bank of England will need to raise rates further as the report is not even close to in keeping with inflation falling to target. Markets now pricing in a 6% peak rate. Previously 5.75% was priced in. However, employment data is beginning to paint a bleaker picture, with wage growth seemingly skewed to the upside by health and social care. it may not be as good as it seems from what wage growth data would lead you to believe.

Group2482 retweeted

almost 3 years ago

THIS WEEK’S HIGHLIGHTS⚠️ 1. The Federal Reserve raised interest rates. Fed Funds Rate is now 5.25-5.5%, the highest in 22 years. The rate hike was unbelievably unsurprising with markets pricing in >99% chance of it prior to the announcement. Jerome Powell’s FOMC speech salient points: • Future meeting decisions will be made at the time. There is a lot of data to come out before September’s meeting. They may (or may not) raise rates at the next meeting but he signalled that the Fed are likely coming to the end of their hiking cycle, stating rates are in restrictive territory. • Fed staff are no longer forecasting recession as their base case. Jerome Powell insisted this was never his personal base case. • Powell alluded to the results of this quarter’s Senior Loan Officer Opinions Survey (SLOOS) that will be released this coming week. He stated it shows, as expected, tight and further tightening credit conditions that are likely set to restrain the economy. • The Fed don’t expect 2% inflation target to hit until 2025. • Labor market is still tight; housing has picked up but still much weaker YoY; the banking sector is sound and resilient. 2. US GDP preliminary data for Q2 2023 surprised to the upside coming in at 2.4% annualized, an improvement in growth from the first quarter (Exp. 1.8%, Prev. 2.0%). Consumer spending came in at 1.6% annualized (Exp. 1.2%), better than expected but significantly lower than 4.6% in Q1. • Annualized = if growth at current pace was maintained for 12 months then YoY GDP would come in at 2.4% 3. New rules enforcing up to a 19% increase in minimum capital requirements for the largest banks in the US were announced by the Federal Reserve. Banks with above $100 billion in assets will be required to hold around 16% more capital, with only the 8 largest banks facing the aforementioned 19%. Banks will likely have years to adjust to changes in regulations, bringing themselves into compliance. • The requirements come as a result of Basel III, a set of international recommendations formed by the Basel Committee on Banking Supervision (BCBS) following the Great Financial Crisis, in order to reduce systemic risk in the global financial system. • Minimal capital requirements for banks enforce a certain % of high quality capital that banks have to hold relative to the amount of risk-weighted assets that they have on their books. Risk weighted assets are assets banks own e.g. loans, mortgages, securities and other risk exposure investments. 4. The Bank of Japan sort of announced their decision to loosen yield curve control. The BOJ’s new governor Ueda stated that the Bank of Japan will offer to purchase 10Y Japanese govt. bonds (JGB) at 1% every working day. The BOJ kept their official cap of 0.5% but their actions effectively nullify this as they have offered to purchase 10Y bonds at 1%. This follows on from the decision in December by the BOJ to raise the limit from 0.25% to 0.5%. JGBs hit their highest yields in 9 years in response. • The BOJ has enacted yield curve control since around 2016; it was introduced by the previous governor, Kuroda, to suppress yields on Japanese bonds, thus decreasing interest rates and attempting to stimulate the Japanese economy. This is part of the famous BOJ ultra loose monetary policy used to combat Japanese deflation. As a result of this ultra-loose monetary policy Japanese investors have had to search for yield elsewhere in the world as owning Japanese bonds effectively yielded nothing. • Simply put, to exert yield curve control, the BOJ sets a target yield for a bond. When the yield rises above their preferred yield (e.g. until this week 0.5% on the 10Y) they would buy these, driving prices up and yield lower, thus controlling the yield. This has resulted in the BOJ owning OVER HALF OF ALL Japanese government bonds. • Japan is the 3rd largest economy in the world and has very deep pockets. As aforementioned, Japanese investors have A LOT of money in foreign markets. They are the largest foreign holder of US government debt, holding over $1 trillion in US Treasuries. The move from the BOJ worried markets that Japanese debt will be more attractive to buyers as yields rise, encouraging Japanese investors to keep their money in domestic markets, driving selling/reduced buying of foreign bonds and increasing yields around the globe. 5. The ECB raised interest rates by 0.25% to 4.25%. Christine Lagarde warned of headwinds for the European economy and their statement lacked the section that previously hinted rates would be hiked again. However, Lagarde left the door open to further hikes at future meetings. 6. June’s Personal Consumption Expenditures showed slowing inflation as well as improved consumer spending, continuing to paint the picture of the Fed’s prophesised Goldilocks soft landing scenario. • Core PCE came in at 4.1% YoY (Exp. 4.2%, Prev. 4.6%) and 0.2% MoM (around 2.4% annualized), softer than expected. This is the Federal Reserve’s favored measure of inflation showing real progress, advancing the least since 2021 YoY. Headline PCE came in at 3% (Exp. 3%, Prev. 3.8%) • Services inflation excluding housing and energy, a metric known to be watched by Powell, came in at 0.2% MoM for the second month in a row, supporting the picture of disinflation in the US. • Inflation adjusted consumer spending increased by 0.4% in June, non-adjusted 0.5%. This is the biggest one month increase since January. More evidence that the US consumer continues to defy forecasts. 7. Consumer confidence continued to improve in the US, coming above expectations at 117 (Exp. 112, Prev. 110.1). • Consumer confidence is a closely followed metric as it is an indication of future consumer spending patterns and around 70% of US GDP is generated as a result of consumer spending. Improving consumer confidence indicates consumers are more optimistic about the economic outlook and thus this may translate into increased spending (and therefore economic) activity. 8. US Jobless claims fell to 221K (Exp. 235K, Prev. 228K) in the week ending July 22nd. This is the smallest number of claims since February, suggesting an ongoing tight labor market. • Initial jobless claims reflect the number of new people in the US claiming unemployment benefits and is seen as a timely indicator of the strength of the US labor market. 9. Despite the above, the Employment Cost Index (ECI) for Q2 2023 released this week suggested that the labor market is starting to see slowed wage increases, something the Fed will be happy to see. The ECI came in at 1% for Q2 (Exp. 1.1%, Prev. 1.2%). This is the smallest QoQ increase since 2021. • Why does the ECI matter? Well, essentially, if the labor market cools and wages stop rising as quickly then businesses won’t need to raise their prices as quickly to maintain profit margins. This then leads to slowing inflation, or so the Fed hopes. 10. New home sales for June came in lower than expected and fell from the month prior, coming in at 697K (-2.5% MoM) annualized (Exp. 725K, Prev. 715K (Revised)). • New homes are dwellings that have not had a previous occupier • The general trend, despite fluctuations MoM has been that New Home Sales have been increasing since around July 2022; as a result, homebuilder confidence has been improving significantly. This is being driven be record low inventories of existing homes on the market as US citizens are reluctant to give up locked in 30Y mortgages with low rates for the current sky high rates on offer. • There was an almost farcical revision to new home sales data last month with the reading initially coming in at +12.2% MoM in May before being revised down to 6.6%. 11. Pending Home Sales increased 0.3% MoM, beating expectations (Exp. -0.5%, Prev. -2.7%). The first MoM increase since February but still -15.6% YoY seasonally adjusted. This is pending sales of EXISTING homes. Approx. 80% of pending home sales become existing home sales in the coming few months and is therefore seen as a leading indicator of existing home sales, that are at very suppressed levels due to very low inventory levels. • Existing home sales being sales of homes with previous inhabitants. 12. Durable goods surprised massively to the upside coming in at +4.7% MoM in June (Exp. 1.3%, Prev. 2% revised), the highest reading since July 2020 and marking the 4th consecutive month of positive readings. The figure was significantly boosted by non-defence aircraft and parts coming in at +69.4% MoM. • Core capital goods orders, a metric watched closely as it is supposed to more accurately reflect business spending, came in at 0.2% MoM, suggesting businesses are still spending in the defiance of tightening monetary policy. However, it should be noted that the MoM rate of increase in durable goods has been weakening since April despite posting increases. • Durable goods provide data on the value of orders, shipments, and inventories of products designed to last at least three years. It gives insight into business investment. Durable goods are often expensive and businesses that think near term economic outlook is poor may hold off on making large investments in order to be more conservative and protect their balance sheet. 13. Small Heartland Tri-State Bank was seized by the state regulator. The 5th US bank failure of 2023 but DRASTICALLY smaller than those seen earlier in the year in SVB and First Republic etc with only around $139 million in assets held by the bank. 14. US bank deposits increased by $47.1 billion in the week ending July 19th after falling $79.3 billion the week prior 15. The Federal Reserve's total balance sheet DECREASED by $31.2 billion and now stands at $8.243 trillion. Securities held outright by the Federal Reserve DECREASED by $22.55 billion, currently at $7.6 trillion. • Securities held by the Federal Reserve typically includes US Treasuries, mortgage backed securities and government backed debt securities. Govt. backed debt securities are debt issued by government sponsored enterprises (GSEs) e.g. Fannie Mae, Freddie Mac, Federal Home Loan Banks (FHLBs) 16. US financial institution emergency borrowing INCREASED by $1.77 billion, now standing at $107.3 billion. Discount window (DW) borrowing DECREASED by $384 million, now at $2.25 billion. Borrowing via the Bank Term Funding Program (BTFP) INCREASED by $2.15 billion, now at $105.1 billion. A new record for the BTFP. • The DW and the BTFP are both means by which financial institutions can borrow emergency liquidity from the Fed. The DW has been around since 1914 while the BTFP was created in response to the banking crisis that started in March. The DW offers shorter term lending (up to 90 days) than the BTFP (up to 1 year); on top of this, the BTFP is more generous in than the DW, banks can post collateral (usually in the form of US treasury bonds, agency MBS, etc) at the Fed at par value, essentially meaning price fluctuations in banks' assets are ignored by the Fed when being used as collateral. This was designed so that banks are not forced to sell underwater portfolios and realise massive losses. To top it off, lending through the BTFP is done at Fed Funds + 0.1%. 17. German GDP preliminary Q2 data posted 0% quarter over quarter (Exp. +0.1%, Prev. -0.1%) • GDP is the sum value of all goods and services produced in a given time period by a country. It is the most comprehensive metric of economic output. However, it is a very lagged indicator and is subject to significant revisions. 18. The German Manufacturing PMI came in considerably worse than expected in July at 38.8 (Exp. 41, Prev. 40.6), in deep contractionary territory and the lowest reading since COVID and the Great Financial Crisis. • The composite PMI for Germany is now unexpectedly in contractionary territory coming in at 48.3 (Exp. 50.3, Prev. 50.6). While services remain in expansion according to PMIs at 52 (Exp. 53.1, Prev. 54.1) they are weakening considerably after a 2023 peak of 57.2 in May. • Germany is the 4th largest economy on Earth, which was in technical recession prior to the 0% GDP reading this week. Economic data coming out of the country continues to be gloomy with contracting manufacturing and declining business optimism. - The most surprising story of the week came out of Japan, loosening their yield curve control and presenting an uncertain picture for bond markets around the globe with fear of foreign investment from Japanese investors being sapped from markets. The ECB left the door open to further rate increases but Lagarde very much shifted to a more dovish stance than has been previously seen by the ECB while acknowledging the possibility of economic headwinds in the wake of rising interest rates and tightening monetary policy. This week we had a glut of data suggesting that the US is starting to follow the trajectory that the Federal Reserve want to see for their goldilocks ‘soft landing’ scenario - cooling inflation with no recession or significant rise in unemployment. As Powell alluded, the Fed staff no longer forecast recession in the US and consumer and business spending is defying estimates. Markets think that the Federal Reserve are done hiking. They are currently pricing in an 80% chance of the Fed holding rates at their next meeting and bringing rate cuts as soon as May 2023, as per CME FedWatch.

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Group2482 retweeted

Dexaran @Dexaran

almost 3 years ago

#ERC223 is added to the list of token standards on #ethereum tokens page https://t.co/47hnwRLmN0 #ERC20 #cryptonews #cryptocurrency #tokens #SmartContracts

Dexaran's tweet photo. #ERC223 is added to the list of token standards on #ethereum tokens page https://t.co/47hnwRLmN0

#ERC20 #cryptonews #cryptocurrency #tokens #SmartContracts https://t.co/HQDk1bBTKw

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Group2482 retweeted

almost 3 years ago

HIGHLIGHTS FROM FED STRESS TEST ⚠️ 1. Large banks are well positioned to weather a severe recession and continue to lend 2. All 23 banks tested remained above their minimum capital requirements during the hypothetical recession, despite total projected losses of $541 billion- $424 billion in loan losses, $18 billion in additional items such as loans booked under fair value, $94 billion in trading and counterparty losses, $5 billion in securities losses 3. Most severe scenario in stress test included, but not limited to, the following conditions: • 40 percent decline in commercial real estate prices, a substantial increase in office vacancies • 38 percent decline in house prices. • The unemployment rate rises by 6.4 percentage points to a peak of 10 percent and economic output declines commensurately. 4. The tests focussed on commercial real estate and shows that while large banks would experience heavy losses in the hypothetical scenario, they would still be able to continue lending 5. The aggregate and individual bank post-stress common equity tier 1 (CET1) capital ratios remain well above the required minimum levels throughout the projection horizon. 6. Under the most severe stress test scenario CET1 capital ratio falls to 10.1% from 12.4% (Q4 22). The minimum regulatory capital ratio is 4.5%. 7. Banks with concentrations in mortgages, credit cards, and commercial real estate generally had larger declines in capital ratios in the stress test this year 8. Lowest minimum CET1 ratio in severe scenario - Citizens at 6.4% (regulatory minimum 4.5%) 9. Highest minimum CET1 ratio in severe scenario - Charles Schwab Corp 22.8% 10. In the severely adverse scenario, banks (in the stress test) are projected to lose $64.9 billion on CRE exposures What is the Fed bank stress test? The Fed annual stress test essentially simulates hypothetical adverse economic scenarios to evaluate how banks would fare under severe economic conditions and evaluate systemic risk should those scenarios play out. This test included 23 large banks in the US Why do they focus on CET1? CET1 is considered the most loss absorbing form of capital a bank has. It is the first form of capital to bear losses in the event of a bank's failure/severe distress and for large banks there are minimum regulatory requirements for the amount of CET1 they must have relative to risk weighted assets. Risk-weighted assets are bank assets, including loans, mortgages, securities, and other risk exposure investments.

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about 3 years ago

@macro_dose Phew @macro_dose 🌟🙌🏻 Who needs the The Economist

377

Group2482 retweeted

about 3 years ago

THIS WEEK'S HIGHLIGHTS⚠️ 1. Debt ceiling talks continue as we fast approach the controversial June 1st X-date set by Janet Yellen. She stated this week that ‘actual default could be a few days or weeks later’ than estimated. Early in the week narrative seemed to be that progress was being made but discussions later stalled. • The Treasury General Account saw a large drawdown early this week falling from $139.9 billion to $87.4 billion between May 12th and 15th. It finished the week at $57.3 billion. This sparked some worries that the X-date could come sooner than expected. • The White House stated that the stock market could crash as much as 45% in the event of a default and Biden stated he is considering using the 14th amendment in order to raise the debt limit. The 14th amendment states that the ‘validity of the public debt of the United States... shall not be questioned’ and therefore it is argued that this could be used to bypass Congress if needed in order to raise the debt limit. However, it would very likely cause a lengthy legal battle and not be straightforward. • For now, the highest stakes game of chicken continues 2. The Federal Reserve barely delivered any speeches this week *sarcasm* with only 14 speakers. Jerome Powell spoke on Friday and didn’t provide much new information. Main points: • inflation too high and will take longer than expected to cool • Bank credit tightening likely means the Fed don’t have to hike rates as much • The Fed are worried about the lagged effects of their rate hikes • Further rate decisions will be data dependent 3. The Federal Reserve's total balance sheet DECREASED by $46.26 billion, now standing at $8.46 trillion. 4. US bank emergency borrowing INCREASED by $3.6 billion to $96 billion. Discount window (DW) borrowing DECREASED by $275 million, now at $9.05 billion. Borrowing via the Bank Term Funding Program (BTFP) INCREASED by $3.9 billion, now at $87 billion • The DW and the BTFP are both means by which financial institutions can borrow collateral backed emergency liquidity from the Fed. 5. Securities held outright by the Federal Reserve DECREASED by $29.8 billion, currently at $7.77 trillion • This typically includes US Treasuries, mortgage backed securities and government backed debt securities. Govt. backed debt securities are debt issued by government sponsored enterprises (GSEs) e.g. Fannie Mae, Freddie Mac, Federal Home Loan Banks (FHLBs) 6. The US CB Leading Economic Index (LEI) fell by a 0.6%. • This is the 13th straight month of decreases. The LEI is a combination of leading indicators of the US economy and is supposed to predict future economic performance by around 7 months. A quote from the report reads 'The Conference Board forecasts a contraction of economic activity starting in Q2 leading to a mild recession by mid-2023'. 7. US Retail Sales came in worse than expected but increased 0.4% MoM in April (Exp. 0.8%, Prev. -0.7%) This is a reversal of the declines we had seen in February and March. Retail sales ex-autos came in as expected at 0.4% (Prev. 0.5%). • Retail sales is an important barometer of consumer spending, which accounts for around 70% of US GDP. 8. NY empire State Manufacturing index came in well below expectations at -31.8 (Exp. 3.75 Prev. 10.8) for May. This is the largest one month drop on record for the index and suggests a significant contraction in manufacturing in New York State. • The index is based off of survey responses from business managers in the New York State manufacturing industry. Readings below 0 indicate contraction. New orders and shipments nosedived. Capital spending index fell to a 3 year low, indicating businesses are planning on being more conservative with their money. 9. The Philly Fed Manufacturing Index came in above expectations and improved significantly in May, coming in at -10.3 (Exp. -19.8, Prev. 31.3%). However, business conditions still signal contraction. 10. Despite the above, US industrial production grew in April, surpassing expectations by growing 0.5% MoM (Exp. 0.0%, Prev 0.0%) 11. US Housing weakness continues despite housing starts coming in hot. Existing home sales, representative of around 90% of the US housing market, took a nosedive making for the 20th consecutive YoY decline in the index. Building permits, a leading indicator for future housing starts and construction activity also disappointed, pointing to possible further future slowdown in housing. • MBA Mortgage Applications -5.7% (Prev. +6.3%) • Building Permits -1.5% MoM in April (Exp. 0.2%) • Housing Starts +2.2% (Exp. -1.5%, Prev. -4.5%) • Existing Home Sales -3.4% (Prev. -2.6%) 12. Jobless claims came in below expectations this week after last week’s skyrocketing figures were said largely to be due to fraud attempts in Massachusetts. Jobless claims came in at 242K (Exp. 254K Prev. 264K). Jobless claims have been gradually trending higher of late suggesting the beginning of some softening in the US labor market. 13. In the UK labor market, for the first time since February 2021 the number of payrolled UK employees declined MoM (this does not include those under self-employed status). Furthermore, UK jobless claims surprised to the upside. The cost of living crisis is also bringing previously economically inactive people back to the workforce with higher labor force participation: • UK HMRC Payrolls Change for April at -136K (Exp. +15k Prev. 42K) • Unemployment rate climbed to 3.9% (Exp. 3.8% Prev. 3.8%) • Claimant Count Change (UK jobless claims) for April 46.7K (Exp. -15K, Prev. 26.5K) • Employment Change +182K (Exp. 160K, Prev. 169K) • 556,000 working days were lost in March due to strikes • Job vacancies fell 55,000 QoQ to 1,083,000 (10th consecutive decline) 14. Eurozone headline inflation came in as expected but increased month-over-month. Energy and services inflation rate increased whilst food, alcohol and tobacco cooled: • Headline 7.0% (Exp. 7.0% Prev. 6.9%) • Core 5.6% (Exp. 5.6% Prev. 5.7%) 15. Eurozone Industrial production came in well below expectations in March at -4.1% Mom (Exp. -2.5% Prev. +1.5%), now down -1.4% YoY. 16. Eurozone GDP for Q1 came in as expected at 0.1% growth for the quarter (Prev. 0.1%) 17. ZEW economic sentiment came in well below expectations this month at -10.7 (Exp. -5.0, Prev. 4.1) • ZEW economic sentiment is a collation of survey responses from around 350 German economists/analysts on their assessment of the German economy now and in the next 6 months The report adds that: • Economists expect worsening of already unfavourable conditions in the next 6 months • Germany may slip in to a 'mild' recession • Unfavourable expectations partly due to possibility of US default and the European Central Bank increasing interest rates further 18. Canadian headline and core inflation rates both came in hotter than expected. This may serve as a warning sign to other central banks as inflation may well be re-accelerating in the country after they were one of the first central banks to pause rate hikes this cycle. • Headline 4.4% (Exp. 4.1%, Prev. 4.3%) • Core 4.1% (Exp. 3.8%, Prev. 4.3%) 19. Japanese GDP grew by 0.4% in Q1, surpassing expectations (Exp. 0.1%, Prev. 0.0%) - Both the UK and US labor markets are showing some signs of weakening, despite employment still being at historically very tight levels. US leading indicators continue to suggest that a recession will ensue in the US by the end of 2023 with signs of weakening in the manufacturing sector in the Philly and NY regional Fed Surveys. Economic data coming out of Germany, the 4th largest world economy, continues to be poor and economist opinion is that the country may slip into recession this year. Germany accounts for almost 30% of Eurozone GDP. Debt ceiling talks will no doubt continue to take the spotlight as worries about the possibility of a US default grow. The drawdowns seen in from the TGA are worrying some that the X-date could come even sooner than expected and extraordinary measures may need to be taken. Meanwhile, Yellen stated the X-date may be further out than previously thought. It is pretty clear that no one actually knows exactly when the X-date is. The markets are now pricing in an 82% chance of a rate hike pause at the Fed’s next meeting – per CME FedWatch

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Group2482 retweeted

hoeem

@hooeem

about 3 years ago

You can participate in guaranteed airdrops for less than $150 and net yourself between $1500-$150000+ I have aggregated 15 upcoming airdrops for you to take advantage of. Here’s how anyone can do it: 🧵 👇

hooeem's tweet photo. You can participate in guaranteed airdrops for less than $150 and net yourself between $1500-$150000+

I have aggregated 15 upcoming airdrops for you to take advantage of.

Here’s how anyone can do it: 🧵 👇 https://t.co/c0gpld0hnS

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734

438K

over 3 years ago

@FlareNetworks 17% voted ? It’s a joke

175

over 3 years ago

@FlareNetworks Sure. That’s easy since @coinbase has yet to free up the FLR 🫤