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MAY 12, 2023

CRYPTO EXCHANGE MARKET SHIFT

Crypto exchanges Huobi and OKX have seen increased success in their cryptocurrency exchange business after their rival Binance reduced popular free promotion and lost market share in digital asset trading. According to Kaiki – leading provider of market data for the cryptocurrency industry, Binance’s share of trading volumes dropped from 73% to 51%, while Huobi’s and OKX’s shares increased from 2% to 10% and from 5% to 9%, respectively. Due to regulatory challenges faced by Binance’s founder, Changpeng Zhao, in the U.S., users have been pushed to look towards other exchanges. Despite this, Binance remains focused on improving its existing services and ensuring the safety of its users’ funds.

REGIONAL BANKS BOUNCE BACK

Major U.S. regional banks saw small share increases following a decline caused by a deposit reduction at PacWest and a new fee from the Federal Deposit Insurance Corporation (FDIC) on deposits without insurance. PacWest Bancorp regained 5% after a significant drop in its market value. However, there were still concerns over deposit insurance that may have an impact on the credit of affected banks. Banks like Comerica Inc, Fifth Third Bancorp, and KeyCorp have all increased between 1.2% and 3%, and Western Alliance Bancorp experienced a similar gain.

WHOLESALE PRICES ROSE LESS THAN EXPEXTED

The recent producer price index (PPI) report from the Labor Department revealed that prices for goods and services rose less than expected in April, indicating that the inflation trend is decreasing. The PPI, which measures prices for final demand goods and services, increased by only 0.2%, less than the 0.3% estimate. Furthermore, the core PPI, which excludes food and energy, was in line with expectations as it also increased by 0.2%.

FED COULD CONTINUE HIKES

The Federal Reserve may need to continue raising interest rates for a longer time if inflation stays high and the job market remains strong. Fed Governor, Michelle Bowman, stated that if prices and employment levels do not change, tightening monetary policy would be needed. Policymakers increased rates by a quarter point at a meeting earlier this month, and although there were signs that interest rates hikes would pause, the economic outlook remains uncertain. As a result, the Fed is waiting to see if future data supports a downward trend in inflation before taking any decisions.

YELLEN CALLS FOR DEBT INCREASE

The U.S. Treasury Secretary, Janet Yellen, recently stated that Congress must increase the limit on how much debt the country can have in order to avoid negative consequences for American businesses in the global market. Not increasing the debt limit could potentially hurt the reputation and credit rating of the country. Yellen has expressed concerns over the possible outcomes if the debt limit is not raised, but has not yet mentioned any specifics regarding how this could affect the nation. Meanwhile, President Joe Biden and House Speaker Kevin McCarthy’s meeting regarding this matter, has been postponed to next week suggesting possible progress in their staff-level discussions.

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