by Samuel Mbaki | Jun 3, 2023 | Finance
- Non-farm U.S.A. jobs increased in May by 339,000, which is much higher than the 190K that Dow Jones estimated.
- The employment rate in the country spiked to 3.7% in May compared to the 3.5% recorded previously. The unemployment rate is the highest recorded since October 2022.
U.S.A. jobs increased at a higher-than-expected rate, and so did the unemployment rate
The U.S.A. has been battling a declining economy for several months with record-high inflation rates, debt ceiling crises, bank meltdowns, and job market shakedowns. A Friday report from the government shows that U.S.A. jobs in May increased by 339,000, better than Dow Jone’s estimate of 190K.
While non-farm U.S.A. jobs are increasing, unemployment is also higher than anticipated. It is at 3.7%, the highest figure recorded since October 2022. The growth in the number of U.S.A. jobs indicated in the Friday job market report marks the 29th straight month of positive growth.
The average hourly earnings, a key inflation indicator, rose by 0.3% in the month, in line with expectations. On an annual rate basis, wages increased by 4.3% in May, which is 0.1% below the estimate. The report also shows that the average workweek fell by 0.1 hours to 34.3 hours.
The U.S.A. jobs report was received well by the markets, with Dow Jones Industrial Average rising by more than 400 points in early trading. Treasury yields followed suit and rose as the market digested the report and developments behind the Senate passing the debt ceiling bill.
“The U.S. labour market continues to demonstrate grit amid chaos – from inflation to high-profile layoffs and rising gas prices,” said Becky Frankiewicz, president, and chief commercial officer of Manpower Group. “With 339,000 job openings, we’re still rewriting the rule book, and the U.S. labour market defies historical definitions.”
May’s hiring rate was almost at par with the 12-month average of 341K, which is great for an economy slowing down. The highest net hires came from Professional and business services, with 64,000 hires. The government also had a significant hire by adding 56,000 new jobs, while the healthcare sector contributed 52,000 new hires.
Other notable sectors were leisure and hospitality, which contributed 48,000 new hires, as construction contributed 25,000, and transportation and warehousing, followed by 24,000 new hires.
The U.S. had highly anticipated this labour report as it will be key in the decision-making process of the Federal Reserve regarding the next move in interest rates. The uptick in the unemployment rate remains a genuine sign of weakness in the market, with a rise in wages signifying that inflation could stick if not acted upon with urgency.
Keep watching Fintech Express for updates on the U.S. economy and Fintech-related developments.
by Fintech Express | Jun 2, 2023 | Regulation
Key Points
- Twitter CEO Elon Musk has been sued for Dogecoin market manipulation
- The lawsuit says that Musk willingly used Dogecoin as the Twitter logo to drive its market numbers
- It’s not the first time that Musk has been served regarding Dogecoin Market manipulation claims
- The crypto community reacts to the story
Elon Musk is petting his favourite dog meme-coin to much-concerned parties
Twitter’s outgoing CEO Elon Musk has been sued regarding Dogecoin market manipulation. Some Dogecoin investors believe that Musk has been saying and taking some actions to drive the prices of Dogecoin for his gain.
According to an amended class action lawsuit, the tech billionaire allegedly engaged in insider trading and carnival-like market manipulation that hurt investors. The lawsuit highlights that Musk has repeatedly praised the coin, which ended up pumping and dumping very hard, at times affecting the investments of many unaware customers while profiting from the ensuing chaos.
The lawsuit highlighted a recent encounter where Elon Musk replaced the Twitter logo with the Doge dog breed meme to drive the price of Dogecoin high. The investors behind the lawsuit believe that Dogecoin is a security under SEC and seek to establish it to further their claims that Musk played the market with insider knowledge.
The initial complaint was first filed in June 2022, but Musk’s recent takeover of Twitter slowed things down, only to create a bigger tension in the Dogecoin Market.
Not the first time Musk has been under fire for endorsing Dogecoin
Elon Musk has been under criticism on several accounts for supporting a meme coin like DOgecoin and being public about it. Whenever Musk mentioned the coin in 2021 and 2022, its value skyrocketed until he was forced to say that he liked its fundamentals and even allowed Tesla to accept Bitcoin trading with its products.
Elon Musk was later sued for around $258B for praising DOgecoin and driving its prices up for his gain as he is an active holder of the coin. He, however, moved to quash the lawsuit claiming that it has no basis.
The crypto community has come out to express their reactions regarding Elon Musk’s actions with DOgecoin and the lawsuit that came as a result. Some have hit out at the complainants, saying it’s possibly the Dogecoin short sellers who are crying foul.
Others have defended him, saying that he has the right to post any meme that he sees fit, be it doge dog breed related or not. One user even said that the purpose behind the coin is having fun, meaning Musk should be let have his own.
Others hilariously tweeted that they would love to sue their neighbours for ‘false’ advertisement as a pun to mock the lawsuit against Musk.
Keep watching Fintech Express for updates on this and other fintech-related news.
by Samuel Mbaki | Jun 2, 2023 | Banking, Finance
Key Points
- The U.S. Senate has passed the debt ceiling bill preventing the U.S. from defaulting on its debt which would have been the first event of its kind.
- The bill won with a landslide 63 vs. 36 votes within 48 hours after the House passed.
- European stocks have turned around positively following the news that the U.S. wouldn’t default on its debt.
- Economists and on-lookers have shown mixed reactions on Social Media regarding the debt ceiling deal and its effects on the U.S. economy as de-dollarisation plans spread globally.
U.S. Senate prevents a possible debt default
The U.S. Senate has passed the Fiscal Responsibility Act that allows the U.S. to have no cap on the debt ceiling until January 2025. The bill had a landslide win with 63 vs. 36 votes on Thursday night, a day after the House of Representatives had barely passed it.
The new bill will be signed by the U.S. President soon ahead of the June 5 deadline that the Treasury gave as the final date that it would be able to pay its bills. While this bill has helped the nation avoid the first-ever debt default in its history, it has received mixed reactions.
The bill has been projected to allow the printing of $4T more whilst no significant spending cuts have been seen, which has made several lawmakers react with financial experts condemning it since international domination of the U.S. dollar remains in jeopardy now more than ever.
E.U. stocks rise as the U.S. Senate averts a debt default crisis
European Stock markets are headed in a positive direction as they opened higher on June 2, 2023, following news that the U.S. Senate had voted in favour of a bill that would see the nation not defaulting on its debt.
The ongoing debate to deal with the debt ceiling crisis has been going on for the past two weeks but never without influencing global stock markets though slightly. Though it has been settled now, it has just dealt with a minute issue in the U.S. economy as a recession could be possible as it’s reliant on the decisions the federal reserve will make regarding the progression of interest rates.
Recent comments from officials show that the federal reserve may choose to skip the interest rates hike in June as some prospects of the market, like jobs data, are coming out stronger than expected. However, it’s still a difficult decision as the market is sending mixed signals; mortgages are up, but the housing sector has yet to kickstart a price meltdown. Today will see the release of a closely watched labour report that may influence the decisions of the Federal Reserve in June greatly.
Though there is a possibility of rates pausing in the U.S., the ball will most likely roll differently in the U.K. ECB president Christine Lagarde has commented on the current 6.1% inflation rate that is haunting the nation, saying it’s still way too high to suspend interest rate hikes. ECB officials have also been giving signals that interest rates will continue being hiked until the bank closes near the 2% inflation rate target.
Investors, financial experts and on-lookers weigh in on the U.S. debt ceiling deal
The ongoing tension between U.S. and BRICS economic bloc has caused several investors, financial experts and observers to condemn the recently passed Fiscal Responsibility Act. The U.S. is set to go into a money-printing frenzy without a debt ceiling cap until 2025, which concerns several experts.
While it is significant that the U.S. will not default on its debt and cost over 8 million jobs sending millions more below the poverty line, some experts like Balaji feel that the current situation in the U.S. economy will most likely be a liability in the long term.
In his argument, Balaji says that the U.S. dollar will still be in a crisis as international investors are not buying treasury bonds but prefer gold and its financial products. He says that the collapsed banks were buying the Treasury bonds only to realize later that they were interacting with the “new toxic waste.”
Other Representatives of the House had aired their thoughts on the bill condemning it and saying that they wouldn’t vote for it. Though it passed, they felt it would not serve the country well.
Hilariously, one citizen posted a cartoon reaction that depicts poor leadership as the reason behind the financial crisis in the country. He sarcastically thanks President Biden for passing the bill in the U.S. Senate.
by Samuel Mbaki | Jun 1, 2023 | Blockchain
Key Points
- Rocket Pool announces that it’s deploying on zkSync Era
- Users to stake ETH on zkSync Era by holding rETH in their wallets
- $rETH will continue to accrue staking rewards automatically, similar to what happens on Mainnet and other Layer 2’s
Rocket Pool is coming to zkSync Era
On June 1, 2023, ETH staking services provider Rocket Pool announced that it was deploying on zkSync Era. This development will allow users to start staking their ETH on Era by holding rETH in their wallets. Additionally, like on ETH mainnet and other L2s, $rETH will automatically accrue staking rewards.
Rocket Pool is yet another integration coming to the fast-growing zkSync Era’s zkEVM DeFi ecosystem that has been taking the internet and crypto industry by storm since its launch two months ago.
Rocket Pool will benefit Liquid stakers with Era’s faster speeds & lower transaction costs, secured by zkSync’s zero-knowledge proofs upon capital deployment with them. The staking provider says this development is yet another step in its mission to lower barriers to entry & ensure anyone can participate in Ethereum’s proof-of-stake system and benefit from it fully.
In a press release, Rocket Pool said:
“As Ethereum’s most decentralized liquid staking protocol, we’re also researching how zero-knowledge proofs can be used in other parts of the protocol to provide decentralized security.”
Since its launch (March 2023), zkSync Era has seen a tremendous spike in its network activity, recording the highest levels ever reached by any Ethereum scaling solution in a short period. As recently highlighted by Messari, the adoption of zkSync Era has also rapidly grown in terms of Total Value Locked (TVL) and transaction volume.
These developments foreshadow the growing interest and faith in innovation, which may see even more projects adopting it. Keep watching Fintech Express for updates on these developments as soon as they happen.
by Samuel Mbaki | Jun 1, 2023 | Banking, Finance
Key Points
- Eurozone inflation has fallen faster than anticipated a month ago, easing living costs.
- U.K. house prices are falling at the fastest annual rates since 2009
- Former U.S. Treasury Secretary Larry Summers says Brexit was a “historic economic error” that has hurt the U.K. economy, driving up inflation.
Eurozone inflation falls further than anticipated easing pressure on the U.K. economy
The inflation rates in the Eurozone have fallen faster in May than previously anticipated resulting in lower energy prices and a drop in core CPI (Consumer Price Index.) The zone’s CPI slowed to 6.1% in May YoY (Year over Year) vs. the expected 6.3%, a significant drop from the 7.0% rise recorded in April.
The Core CPI also dipped to 5.3% in May vs. 5.5%, which was expected, a significant drop from the 5.6% recorded in April.
The fall in the inflation rates takes the annual inflation closer to the European Central Bank’s (ECB) target of 2%. However, the prices are still rising three times fast as the ECB is aiming for. The inflation rates in commodities are as follows:
- Food, alcohola& tobacco +12.5%
- Other goods +5.8%
- Services +5.0%
- Energy -1.7%
European stock markets are rising from their lowest level in two months
The FTSE 10o index has gained 48 points/ 0.65% to 7494, following news that the U.S. House of Representatives had passed the Fiscal Responsibility Act n Wednesday. Investors are taking this news well, sending the U.K. stock market into greener zones, last recorded two months ago.
U.K. house prices fall at the fastest pace since 2009 while mortgage approvals fall
The prices of houses in the U.K. are falling fast at an annual rate last seen in 2009. The prices of houses decreased by 3.4% in the past 12 months ending May 2023, the biggest drop since July 2009, when an annual fall of prices by 6.2% was recorded.
A report from Nationwide indicates that house prices had remained flat over the past month after seasonal effects had been considered. Now they stand at an average price of £260,736 which remains 4% below the peak last seen in August 2022.
Though the prices are falling, Robert Gardner, the Nationwide chief economist, has warned that headwinds to the housing market will most probably strengthen over the coming months. He says investors should prepare to acquire mortgage deals for fixed rates above 5% as the government may keep increasing interest rates.
“If maintained, this is likely to exert renewed upward pressure on mortgage rates, which had been trending down after spiking in the wake of the mini-budget in September last year.”
The housing market is still unstable in the U.K. economy as the number of mortgage approvals has fallen as buyers return. A report from the Bank of England shows that there were 48,690 new mortgages signed off in April, down from 51,488 recorded in March.
The new mortgage figures are also 26.0% lower than the average numbers recorded between 2018 and 2019.
Brexit was a catastrophic economic mistake; Larry Summers
In an interview with Radio 4, Larry Summer, a former U.S. Treasury Secretary, said that Brexit was a historic economic error that pushed up inflation and will go down as the event that reduced the competitiveness of the U.K. economy globally.
When asked why inflation is haunting the U.K. in a significantly bigger way than the U.S., Summers said:
“I think Brexit will be remembered as a historic economic error that reduced the competitiveness of the U.K. economy, put downward pressure on the pound and upwards pressure on prices, limited imports of goods, and limited in some ways the labor supply. All of which contributed to higher inflation.”
Reports have found that Brexit food trade barriers have cost the U.K. economy 7 billion Euros. As such, it has made the inflation rates more menacing, pushing citizens to the corner. When asked about the possibility of a recession, Summers said he would be surprised if two more years passed before the U.K. entered a recession.
Keep watching Fintech Express for updates on finance, banking, and other FinTech-related developments.
by Samuel Mbaki | Jun 1, 2023 | Banking, Finance
Key points
- Tesla CEO Elon Musk has regained his status as the world’s richest man once again as he overtakes Bernard Arnault.
- Elon Musk toured China for the first time in three years on May 31, 2023, meeting China’s foreign minister Qin Gang.
- Musk commented on the status of China and America as co-joined twins saying the two world’s largest economies shouldn’t be breaking their ties through de-dollarisation
Elon Musk regains his richest man status as he tours China
Tesla CEO Elon Musk has regained his status as the world’s richest man. According to a report by Bloomberg, Tesla’s CEO and Twitter’s new owner passed Benard Arnault as the richest man on Wednesday after the shares of Arnault’s LVMH fell by 2.6% in Paris Trading.
Now, Musk’s total net worth stands at around $192B. The report comes when Elon Musk is on his Chinese tour for the first time in the last 3 years. Musk met with China’s Minister of Foreign Affairs, Jin Zhuanglong, and discussed the development of electric vehicles.
Though Musk has yet to speak publicly about the contents of his meeting with the Chinese executive, the minister said that Elon Musk agreed to build more factories to produce electric vehicles.
Elon Musk is now among a growing list of US executives to visit China this year on business trips as economic relations continue to sour. JP Morgan Bank Chief Executive Officer also visited China this week. Apple CEO Tim Cook was also there in March following a series of strikes that had affected his company in earlier months.
Though the ties between Washington and China are growing as the Asian nation is planning on ditching the dollar in favor of a new economic trade bloc, BRICS, Dan Ives from investment firm Wedbush Securities has said that it’s a key chess move for Wall Street executives to foster a great business relationship with Beijing.
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by admin | Jun 1, 2023 | Banking, Finance
Key Points
- The House passed a debt ceiling bill on Wednesday night, days before the U.S. Treasury runs out of money to pay its bills.
- The Fiscal Responsibility Act was formed due to a deal between Speaker Kevin McCarthy and President Joe Biden in May.
- Though the bill has been met with opposition along the way, it is currently the only solution to the looming debt default crisis. Senate Majority Leader Chuck Schumer has said the Senate will do all it can to move the bill quickly.
Debt default deadline days away as Debt Ceiling bill heads to the Senate
The Fiscal Responsibility Act, a bill meant to push the U.S. debt ceiling, passed in the House of Representatives on Wednesday night by a wide margin. It will now head to the Senate for another voting process ahead of the June 5, 2023, deadline for the U.S. Treasury to default on its debt.
The Fiscal Responsibility Act passed with 314-117 votes receiving more support from Democrats and Republicans than expected. The majority leader of the Senate, Chuck Schumer, has said that the Senate will do all it can to move the bill along quickly, signaling that it has a high expectancy of being passed and signed into law by President Biden.
The new developments culminated in a sensitive two weeks of tense negotiations between lawmakers on how to go forward as the economy was under the threat of debt default. The bill has now reached the Senate stage, and the leaders on both sides want to pass it within 48 hours.
Senate Majority Leader Chuck Schumer commented on the story, saying:
“There’s been a very good vote in the House. I hope we can move the bill quickly here in the Senate and bring it to the president’s desk as soon as possible.”
Keep watching Fintech Express for updates on this and other Finance related updates.
by Samuel Mbaki | May 31, 2023 | Banking, Finance
Key Points
- U.S. Treasury Yields have fallen as investors wait for a crucial debt ceiling vote to be held in the House of Representatives later in the day.
- House Rules Committee voted in favor of the debt ceiling vote on Tuesday with a 7-6 majority.
- April’s JOLTs job opening report is due today.
U.S. Treasury Yield recedes as investors await debt ceiling vote
U.S. Treasury yields declined on May 31, 2023, as investors fretted over the ongoing debt ceiling crisis. The House of Representatives is set to vote for a bill that could see the U.S. evade defaulting on its debt, which could have adverse effects and be the first one in its history. Additionally, Investors are also awaiting the April report on key jobs data.
At 5:34 a.m. ET, the yield on the 10-year Treasury was trading 4 basis points lower at 3.654%. The 2-year Treasury yield was last down by more than 3 basis points at 4.436%.
The U.S. markets are reacting to the Fiscal Responsibility ACT that seeks to raise the debt ceiling to avoid the government defaulting on its debt which could happen as soon as June 5.
The bill received a win in the House Rules Committee with a 7-6 vote and is now headed to the House of Representatives floor today for tentative voting. If the bill is passed, it would need approval from the Senate before it is effected.
However, a straight win is not guaranteed as politicians on both sides of the aisle have criticized Speaker Kevin McCarthy and President Biden’s compromise. At least 20 Republican lawmakers have asserted that they would vote against the bill. The market is under stress and tensions regarding what might happen.
Meanwhile, a key report on April JOLTs job openings is due today, which will give key hints about the state of the economy and massively affect the decision of the Federal Reserve regarding the next interest rates policy decision.
Whether the bill will pass or not and if the Federal Reserve will hike or pause interest rates again is yet to be seen. Keep watching Fintech Express for updates on this and other stories.
by admin | May 31, 2023 | Cryptocurrencies
Key Points
- Stablecoin company, Tether, said on May 20, 2023, that it would commit its resources to mining Bitcoin in Uruguay using renewable energy.
- As Bitcoin halvings increase, Bitcoin’s mining hash rate is rising, necessitating more innovative ways of accessing electrical power as concerns are rising due to its high consumption levels.
- Stablecoin Company Tether is shifting toward diversifying its treasury management strategy by investing some of its net profit in Bitcoin.
Tether to do more than minting USDT; Bitcoin in mind
Tether, the world’s largest stablecoin company, has revealed that it seeks to diversify its treasury investment strategy by investing part of its profits in Bitcoin. The company is now moving to mine Bitcoin in Uruguay using renewable energy.
The company revealed this plan on May 30, 2023, marking its first foray into the green energy sector. It added that it is also searching for experts in the new venture to support its expansion in the green energy space. Bitcoin’s rising hashing figures require even more energy to secure the network and mint new coins, which necessitates the innovation of more solutions like green energy.
“By harnessing the power of Bitcoin and Uruguay’s renewable energy capabilities, Tether is leading the way in sustainable and responsible Bitcoin mining,” said Paolo Ardoino, CTO of Tether.
“Our unwavering commitment to renewable energy ensures that every Bitcoin we mine leaves a minimal ecological footprint while upholding the security and integrity of the Bitcoin network.”
In early May 2023, Tether revealed that it plans to invest some of its profits in Bitcoin. The company committed to investing up to 15% of its net profit in Bitcoin, mimicking strategies from other international companies like Elon Musk’s Tesla and Michael Saylor’s Microstrategy.
Tether is now eyeing to establish its Bitcoin mining plants in Uruguay, one of the prominent leaders in renewable energy production, sourcing over 98% of its electricity output from green energy sources. This development creates a positive image for the company and Bitcoin, as influential people in the crypto industry have asked crypto miners to consider energy sources with lower carbon prints.
Keep watching Fintech Express for updates on crypto and other Fintech-related stories.
by Samuel Mbaki | May 30, 2023 | Cryptocurrencies
Tron Network has been discovered to have a $500M vulnerability. This vulnerability was first discovered in February and reported to the right team, which was resolved in a few days. Today, the research team at dWallet Labs published an article detailing how they discovered the zero-day vulnerability in Tron’s multi-signature accounts and helped resolve it.
Security firm finds vulnerabilities in Tron Network
DWallet Labs found a bug in Justin Sun’s Tron Network that would allow an attacker to bypass the network multi-sig accounts mechanism and sign transactions using one signature only.
The team posted an article earlier today saying that the network’s vulnerability could impact around $500 million in assets stored in the multi-sig wallets. It explained that the bug could allow any signer to overcome the multi-sig security designed by TRON, giving full access to the accounts.
Since multi-signature accounts are meant to be used and authorized by multiple parties, such a vulnerability could spell doom to the network and shouldn’t be taken lightly. The research team said:
“We can bypass the multisig verification process by signing the same message with non-deterministic nonces of our choice. By doing so, we will be able to generate many valid different signatures for the same message by the same private key.”
The team explained that the network needed to catch up by ensuring the signatures used were unique rather than checking if the signers were unique. As such, the signers could double vote, an action that the network’s security measures could easily overlook, resulting in a potential exploit.
However, the researchers have explained that they reported the matter in February, and the network’s developers fixed it. Keep watching Fintech Express for updates on cyber security and other developments surrounding the fintech industry.
