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JUNE 9, 2023

USD TRANSACTIONS SUSPENDED

Binance.US has announced the suspension of U.S. dollar deposits and purchases on its cryptocurrency exchange starting June 13th due to its payment and banking partners’ decision to temporarily halt USD fiat channels. The company has attributed this suspension to a series of unjustified civil complaints filed against them by the U.S. Securities and Exchange Commission (SEC), which has raised concerns about Binance’s banking transactions and alleges that the exchange company and its founder have violated U.S. securities laws. Although customers can still withdraw their funds in alternative cryptocurrencies like Tether, the suspension signals that Binance’s banking partners no longer view the exchange as a favorable business partner, and as for now, it is currently unclear which banks Binance still retains as its partners.

PAUSE EXPECTED

Most economists predict that the Federal Reserve will not raise interest rates at their upcoming meeting, marking the first pause in 15 months. The survey, which consisted of 46 economists, suggested that the Federal Open Market Committee will hold rates steady in June, keeping them within a range of 5%-5.25%. Experts suggest that the slowdown in inflation and the reduction of lending may lead to the end of interest rate hikes, marking May as the last of its cycle. Meanwhile, the market predicts a slight rate increase in July, followed by a possible decrease in December.

MIXED SIGNALS

Despite predictions of a recession in the U.S., the country has managed to stay afloat so far in the first half of 2023. Nevertheless, recent signs suggest that the consumer sector, which has powered the nation’s post-pandemic recovery, may be showing signs of strain. The mixed signals from economic indicators leave economists divided on the likelihood of a recession, with the yield curve inverted, manufacturing surveys pointing to a slump, yet layoffs remaining localized in the tech sector. Meanwhile, consumer spending in the leisure industry has surged, giving hope for a “soft landing” in the economy. However, doubts still linger as pandemic savings fade and interest rates stay elevated, leading some strategists and economists to believe that a recession is inevitable. Though there have been positive signs that global manufacturing and U.S. employment are strong, these trends, according to JPMorgan, could pave the way for an end to the current economic expansion.

SLIGHT DECLINE

Gold prices have recently experienced a slight decrease due to a stronger dollar, however, they remained near the previous highs experienced throughout the week, which was due to speculation that the Federal Reserve may pause interest rate hikes. For the week, spot gold experienced a 0.8% increase, reaching $1,962.34 per ounce. This shows that despite the lack of clear signals, the market is still using gold as a hedge against potential economic slowdowns. Moreover, the odds of the Fed standing pat next week are high, which may further support gold prices.

INTERNATIONAL NEWS

Euro zone government bond yields slightly increased as investors looked ahead to the upcoming European Central Bank’s (ECB) policy meeting, which is expected to be on the hawkish side next week. Analysts predict that the ECB may increase rates by 0.25%, however, they anticipate the bank will refrain from signaling a pause in the tightening trajectory to prevent an unwelcome easing of financial conditions. Nevertheless, the ECB must be cautious in raising rates due to weakening economic conditions and a decline in core inflation. Furthermore, investors anticipate that the ECB’s rates will remain below 3.75%.

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