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APRIL 30, 2024

WEAK DEMAND

Unlike spot BTC ETFs in the U.S., which had a much higher trading volume of $655 million on their debut day and attracted approximately $12 billion in investor funds since their launch, it does not seem like the Asian market was as excited for these ETFs. The 6 newly listed exchange-traded funds (ETFs) in Hong Kong reported a weak demand as all have registered a low trading volume of just $11 million on their first day – significantly below the expected $100 million. As a result, Bitcoin faced selling pressure, with its value falling by over 2%, and it is currently trading at just above $61,000 as of 8:00 AM CST. In addition, Ethereum also joined the downward trend, as the crypto have fallen by over 5%, with its value trading very close to $3,000 mark.

LOWER BUT STILL STRONG

Gold prices have declined due to the current expectations on the upcoming Federal Reserve rate-decision meeting. Recent strong inflation data may lead to a shift in Fed strategy, potentially resulting in fewer rate cuts than previously hinted by Chair Jerome Powell in December. The timeline for expected cuts has been pushed back, causing some changes in market sentiment, and making many believe that the Fed will likely take a more hawkish stance. Nevertheless, despite this, it is worth noting that gold prices are still heading towards their third consecutive month of gains as although bullion has dropped below $2,320 an ounce, it remains up by almost 4% for the month. It is worth noting that gold has seen a significant increase in demand, particularly from Asian markets like China, and has been supported by ongoing geopolitical tensions; and as indicated by the World Gold Council, Central banks have been buying gold at record levels.

THE RISE MAY CONTINUE

Barclays Plc is predicting that even if the Federal Reserve changes its policies, the amount of Treasury bonds being issued will continue to increase, causing long-term interest rates to rise and putting pressure on global bonds. They point out that lowering Fed interest rates might not be enough to keep U.S. long-term rates down, as studies show that for every one percent increase in the U.S. deficit compared to the GDP, the 10-year Treasury bond rates would go up by 0.2 percent. In addition, there is also concern that too much U.S. debt being offered could decrease the demand for U.S. bonds, and if the Fed takes action on reducing its balance sheet, it may also affect how bonds are priced. Moreover, Barclays expects the U.S. budget deficit to remain high, regardless of election outcomes, leading to higher U.S. bond rates that could also impact global bond markets.

PROFIT FORECAST SOARS

PayPal’s has reported a strong performance in the first quarter, leading to an increase in its full-year adjusted profit forecast. The growth was driven by robust consumer spending and cost-cutting measures that improved operating margins. In addition, despite economic concerns, consumer spending has remained steady, especially in online shopping, dining out, and travel. Moreover, PayPal’s new management is focused on making the company more efficient by reducing costs. They plan to cut jobs and invest in key strategic initiatives to boost investor confidence. Furthermore, the company expects its adjusted profit to grow by a “mid-to-high single-digit percentage” in 2024 and anticipates a 7% increase in second-quarter revenue. PayPal’s total payment volumes and net revenue have also seen significant growth. Overall, PayPal’s positive performance aligns with trends seen in other payment processors like Visa and American Express, and with improved operating margins and strong earnings, PayPal is optimistic about its future growth prospects.

INCREASE IN EMPLOYMENT COSTS

In the first quarter of 2024, the U.S. saw a modest increase in the cost of employing workers, with the Employment Cost Index rising by 1.2%, as reported by the Department of Labor. This increase followed a 0.9% growth in the previous three months and exceeded economists’ expected 1.0% rise. Despite gains in both the private and public sectors, wage and salary growth remained constant at 1.1% on the quarter. However, there was a notable acceleration in benefits, which went from a 0.7% increase to 1.1%. This data indicates a strengthening of employment costs, which may have implications for businesses and workers alike.

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