Jaw-dropping US job numbers 🚀
Deflation returns to haunt China’s economy 😱
I will unravel 6 biggest macro developments 🧵👇
Macro Pulse Update 09.09.2023, covering the following topics:
1️⃣ Macro events for the week
2️⃣ Bitcoin Buzz Indicator
3️⃣ Market overview
4️⃣ Key Economic Metrics
5️⃣ China Spotlight
1️⃣ Macro events for the week
Previous week (nothing significant)
Next week (Key events: Inflation data, Retail sales)
2️⃣ Bitcoin Buzz Indicator
Banking and Regulatory Updates
JPMorgan’s Blockchain Payment Experiment
Ethereum ETFs: SEC’s Upcoming Decision
Visa Expands into Stablecoin Payments
MakerDAO vs Solana: The Drama Unfolds
Crypto Platforms and Market Trends
CFTC Slaps Fines on DeFi Protocols
Taiwan Rolls Out Crypto Regulations
MetaMask’s New Cash-Out Feature
Country-Specific Developments
Weibo Purges Crypto Influencers
Crypto Exchanges and CEOs
Binance CEO Debunks Rumors
LBRY’s Legal Battle Against the SEC
Altcoins
XLM went up 10% as Stellar hinted at ‘something cool.’
Elon Musk reportedly backed Dogecoin in his biography, but the price still dropped.
DYDX token approved to become the core asset of the new dYdX chain.
Shibarium hit 1M wallets, saw 25M BONE staked; Robinhood added 14T SHIB.
GALA plummeted 98% in 18 months amid company’s internal war.
Aussie heart institute picked Filecoin over cloud storage.
Synapse token slipped after a big sell-off from Nima Capital.
Lido on Solana considered closing due to lack of funds.
Massive XRP exodus from Binance occurred; Kaiko said it's strong than other altcoins.
USDC launched on OP Mainnet and Base.
Tether held more U.S. bills than some countries, said Ardoino.
Nearly 99% Axie Infinity wallets were in the red.
FDUSD market cap jumped 51% to $394M.
1.5T PEPE sold at a loss, sentiment remained low.
SNX rose 15% amid V3 buzz.
TON Foundation registered in Switzerland; saw an August surge of 45%.
Whales & sharks hoarded $10 worth of LINK in 3 days.
Polygon denied MATIC dump, cited mislabeling.
Kenyan official slammed Worldcoin as data harvesters.
Offchain Labs was accused of taking ARBs from Binance.
PancakeSwap beat BNB Chain in August revenue.
Coinbase's Base network faced its first major outage.
Half of crypto millionaires hold Bitcoin.
Ex-Celsius CEO's assets were frozen amid DOJ case.
Coinbase and Aave led a tokenized asset coalition.
Palau ended its dollar-based stablecoin two months after launch.
Thodex founder got 11K+ years in jail.
FBI attributed $41M Stake hack to North Korea's Lazarus Group.
Crypto whale lost $24M in staked Ethereum to phishing attack
3️⃣ Market overview
The data presents a nuanced picture - a resilient U.S. job market but with concerning inflation trends, Apple's China challenges, equity market volatility and defensive positioning, and ongoing high oil prices.
The Fed likely still has more work to do in tightening policy to combat inflation, while geopolitical and growth concerns loom over markets.
The better-than-expected jobless claims data and rise in labor force participation are encouraging signs for the resilience of the U.S. job market. This could give the Fed more room to continue raising rates to fight inflation, without severely impacting employment. However, the downward revision to productivity growth shows persisting inflationary pressures from labor costs.
China's expanding restrictions on iPhone use in government entities is a troubling sign for Apple's business in a key market. This news, along with concerns about iPhone demand in China, contributed to the sharp stock declines for Apple and its suppliers. It highlights growing geopolitical and economic tensions between the U.S. and China.
The stock market declines, particularly in tech, indicate persisting caution among investors. The rotation into defensive utility stocks shows a preference for safety in the current environment of uncertainty. Meanwhile, oil's gains reflect ongoing tight supply concerns, contributing to inflationary pressures.
4️⃣ Key Economic Metrics
🟢 Job market remains strong with solid job gains and rising participation. But stubbornly high wage inflation presents challenges for the Fed's inflation fight. Markets are optimistic that the job market is cooling enough for the Fed to avoid further rate hikes, but wage data suggests the Fed may need to do more.
The Fed faces a dilemma between tightening further to control inflation and potentially damaging the still-strong job market.
The unemployment rate increased to 3.8% in August due to a substantial rise in labor force participation rather than weak job growth.
Job growth accelerated to 187,000 in August, the fastest pace in 3 months, indicating continued labor market resilience.
Absent one-off factors like a major company closure, job growth would have been even stronger.
Wage growth remains elevated at 4.3% annually, unchanged over recent months. This suggests persistent inflationary pressures.
🟢 Consumer fundamentals remain solid with wage-driven spending power, reviving durable goods demand without inflationary pressures, and services driving residual inflation.
Consumer spending grew robustly (0.6% increase) despite a slight decline in real disposable income (-0.2%). Households reduced savings to sustain spending.
The income decline was due to temporary factors while wage growth remains positive, signaling resilient consumer demand.
Spending on durable goods rebounded strongly (1.4% increase), hitting its highest level since April 2021 as demand recovers.
Supply chain adjustments mean the durables spending rebound is unlikely to restart inflation in goods.
Inflation ticked up due to service prices, but the overall downward trajectory remains in place. A one month increase is not necessarily a trend reversal.
5️⃣ China Spotlight
While consumer inflation bounced back slightly, the broader data reflects continued economic weakness in China with risks of deflation reemerging. Persistent soft demand, high youth unemployment, real estate woes, and export declines present challenges for China's post-COVID recovery.
🟡 Consumer prices rebounded back into positive territory in August, rising 0.1% year-on-year after briefly dipping into deflation in July. However, the rebound was smaller than expected, and deflation risks remain amid weak domestic demand.
🔴 Youth unemployment hit a record high over 20% in June, though official data was suspended in August.
🔴 Ongoing struggles in real estate and exports are hampering China's economic recovery. Exports declined for the 4th straight month in August, directly impacting employment as exporters struggle.
🔴 Producer prices fell 3% in August, the 11th straight monthly decline, squeezing company margins.
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