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Atlanta Fed GDPNow growth estimate for Q4 rises to 2.7% from 2.4%

Atlanta Fed GDPNow growth estimate for Q4 rises to 2.7% from 2.4%

January 7, 2025 8:45 pm |

The Atlanta Fed GDPNow growth estimate for Q4 rises to 2.7 from 2.4% previously.

In their own words:

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2024 is 2.7 percent on January 7, up from 2.4 percent on January 3. After recent releases from the US Census Bureau, the Institute for Supply Management, and the US Bureau of Economic Analysis, the nowcasts of fourth-quarter real personal consumption expenditures growth and fourth-quarter real gross private domestic investment growth increased from 3.0 percent and -0.9 percent, respectively, to 3.3 percent and -0.6 percent, while the nowcast of the contribution of net exports to fourth-quarter real GDP growth increased from 0.07 percentage points to 0.11 percentage points.

The next GDPNow update is Thursday, January 9. Please see the “Release Dates” tab below for a list of upcoming releases.

This article was written by Greg Michalowski at www.forexlive.com.

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Nomura: What we expect from the December FOMC Minutes

Nomura: What we expect from the December FOMC Minutes

January 7, 2025 8:44 pm |

Nomura expects the FOMC minutes from December to highlight divisions within the Committee on the rate cut decision and 2025 policy outlook, alongside detailed discussions on fiscal policy impacts, neutral rate assumptions, and inflation risks.

Key Points:

  • Committee Divisions:

    • While only Cleveland Fed President Hammack dissented against the December 25bp cut, Nomura suggests three additional “tacit” dissents based on the 2024 federal funds rate projections.
    • San Francisco Fed President Daly’s description of the cut as a “close call” indicates broader internal debate.

  • Fiscal Policy Impacts:

    • Chair Powell mentioned preliminary incorporation of potential fiscal policy changes, including higher tariffs, into economic forecasts.
    • The minutes may shed light on how these assumptions influenced the inflation outlook and federal funds rate projections.

  • Neutral Rate Discussions:

    • Varied views on the policy stance’s restrictiveness could reveal discussions on the neutral rate, with Powell emphasizing meaningful restrictiveness, while Hammack views policy as nearing neutral.

  • Inflation Concerns:

    • Powell’s optimistic inflation outlook contrasts with participants’ shift toward greater inflation risk.
    • The minutes may capture debates on short-term noise from non-market services and goods, alongside broader concerns about inflation persistence.

Conclusion:

Nomura anticipates the December FOMC minutes will underscore internal divisions, fiscal policy considerations, and evolving views on inflation and neutral policy stance, offering valuable insights into the Fed’s deliberations and 2025 outlook.

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This article was written by Adam Button at www.forexlive.com.

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Meta Takes a Page from X’s Playbook: More Political Content, Less Censorship

Meta Takes a Page from X’s Playbook: More Political Content, Less Censorship

January 7, 2025 8:16 pm |

Meta is shaking up its approach to content moderation,
announcing sweeping changes that will eliminate third-party fact-checking and
revive political content on its platforms.

The decision, presented as a move to restore free
expression, now signals a pivot toward user-driven moderation. Meta will
replace its fact-checking program with a “Community Notes” system,
possibly inspired by Elon Musk‘s platform X.

From Fact-Checking to “Community Notes”

“Some people believe giving more people a voice
is driving division rather than bringing us together. More people across the
spectrum believe that achieving the political outcomes they think matter is
more important than every person having a voice. I think that’s
dangerous,” Zuckerberg said in a five-minute video announcement.

This user-contributed model will provide context to
posts, aiming to offer transparency while stepping away from direct
intervention. The rollout will begin in the U.S. in the coming months.

“We’ve reached a point where it’s just too many
mistakes and too much censorship,” added Zuckerberg. He argued that
previous policies were too restrictive and politically biased, eroding trust
among users.

In addition to scrapping fact-checking, Meta will ease
restrictions on contentious topics like immigration and gender. The company
plans to focus enforcement efforts on illegal and high-severity content.

Meta’s trust and safety teams will also relocate from
California to Texas, marking a symbolic alignment with more conservative
political values. Meta will also tweak its algorithms to reintroduce political
and civic content into users’ feeds.

Zuckerberg noted a shift in user sentiment, saying, “It feels like we’re in a new era now, and people want to see this content
again. The problem is that the filters make mistakes; they take down a lot of
content that they shouldn’t.

Political Underpinnings

The timing of Meta’s announcement, coming shortly
after President-elect Donald Trump’s victory, has raised eyebrows. Zuckerberg’s
recent remarks and policy shifts appear to align with Trump’s administration,
including a pledge to push back against global censorship efforts targeting
American companies, CNN reported.

As one of the largest social media companies globally,
Meta’s policy shifts are expected to reverberate across the digital landscape.
Critics predict an uptick in false and hateful content, while others foresee a
growing push toward alternative platforms.

Meta is expected to reshape the internet’s dynamics,
strengthening its role as a platform that prioritizes free speech while leaving
users to navigate the complexities of misinformation on their own.

Whether this gamble will pay off remains to be seen,
but it undoubtedly marks a significant turning point for the company and its
billions of users worldwide.

This article was written by Jared Kirui at www.financemagnates.com.

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XRP Linked Ripple’s RLUSD Stablecoin Gains DeFi Access Through Chainlink

XRP Linked Ripple’s RLUSD Stablecoin Gains DeFi Access Through Chainlink

January 7, 2025 7:48 pm |

Ripple, a blockchain service provider associated with the
XRP Ledger, announced its partnership with data provider Chainlink. The
collaboration aims to integrate Ripple’s RLUSD stablecoin with decentralized
finance (DeFi) applications.

“By enabling seamless functionality across DeFi, RLUSD
is well-positioned to support a growing range of use cases in decentralized
financial systems,” Jack McDonald, Senior Vice President of Stablecoin at
Ripple, told CoinDesk.

RLUSD Stablecoin Launches on Ethereum, XRP

The integration, launched on the Ethereum blockchain,
enables developers to use RLUSD in DeFi protocols. These applications include
trading, lending, and other financial services. The RLUSD stablecoin, pegged to
the US dollar, was made available on Ethereum and the XRP Ledger networks last
month. As of now, the stablecoin’s market capitalization stands at $72 million,
according to CoinGecko.

“Integrating Chainlink Price Feeds provides RLUSD with
the essential infrastructure it needs to deliver accurate and decentralized
pricing data to DeFi applications. This ensures that protocols using RLUSD for
a broad range of financial activities can operate reliably and transparently,”
McDonald added.

Chainlink Integration Supports RLUSD Cross-Border
Payments

Ripple’s adoption of Chainlink’s services is intended to
support the wider use of RLUSD in DeFi. The move seeks to enhance the
stablecoin’s role in secure, cost-effective cross-border payments.

DeFi applications rely on accurate pricing data to mitigate
risks related to stablecoin usage. Chainlink’s infrastructure, which has
supported over $18 trillion in transactions, provides the necessary data
services.

XRP Adoption in Japan Could Drive Market Growth

In 2025, Ripple’s
XRP Ledger will be adopted by all banks in Japan, marking a significant
change in the country’s financial technology landscape. Announced by SBI CEO
Yoshitaka Kitao, this integration with the Interledger Protocol aims to
enhance cross-border payments and simplify currency exchanges, as reported by Finance Magnates.

The XRP Ledger is considered an efficient, low-cost solution
for international remittances, with the potential to modernize global banking
systems. If adopted by 1% of Japan’s $6.372 trillion banking sector, XRP’s
market capitalization could rise by $63.72 billion, pushing its price to $3.50.
A 10% adoption could see the price rise to $13.48, showcasing the potential
impact of widespread XRP adoption.

This article was written by Tareq Sikder at www.financemagnates.com.

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US treasury sells $38 billion 10 year notes at a high yield of 4.680%

US treasury sells $38 billion 10 year notes at a high yield of 4.680%

January 7, 2025 7:42 pm |

The US Treasury sold $38 billion of 10 year notes. Details of the auction showed:

  • High yield 4.680%
  • WI level at the time of the auction 4.678%
  • Tail +0.2 basis points vs six-month average of -0.1 basis points
  • Bid to cover 2.53X vs. six-month average of 2.55X
  • DIrects (a measure of domestic demand) 23.0% vs. six-month average of 17.0%
  • Indirects (international demand) 61.4% vs six-month average of 69.9%
  • Dealers 15.6% vs six-month average of 13.1%

AUCTION GRADE: C-

Result summary: The 10 year note auction had a modest 0.2 basis points tail versus -0.1 basis point six-month average. The bid to cover was near the average as well. What was disappointing is that the dealers were saddled with 15.6% versus 13.1% average. The international demand was well below the six-month average at 61.4% versus 69.9%. However, domestic demand made up for most of the shortfall.

Overall, the grade was a little less than average

This article was written by Greg Michalowski at www.forexlive.com.

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Fallen Crypto Exchange FTX EU Has a New Owner, but License Remains Suspended

Fallen Crypto Exchange FTX EU Has a New Owner, but License Remains Suspended

January 7, 2025 7:13 pm |

Remember
FTX? The European branch of the once-popular cryptocurrency exchange that
became the center of a major scandal in 2022 has just been acquired. Backpack
has become the new owner of FTX EU.

Although Backpack
currently ranks only 200th in CoinMarketCap’s cryptocurrency exchange rankings
by daily trading volume, it hopes to expand its operations through the
acquisition of this MiFID II-regulated entity. However, this move might not
happen as quickly as anticipated.

Backpack Acquires Defunct
FTX EU for MiFID II License

Since
September 2022, FTX EU has held a Cyprus Securities and Exchange Commission
(CySEC) license, allowing it to passport its services throughout the European
Union under MiFID II regulations.

According
to a press release from Backpack, the acquisition has received approval from
both the bankruptcy court and CySEC. The exchange has ambitious plans,
including introducing crypto derivatives and perpetual futures to the European
market, which are currently unavailable through regulated exchanges locally.

“As
many international exchanges exit the European Union, becoming a MiFID
II-licensed entity demonstrates our dedication to meeting the highest
regulatory standards and is a significant step to bringing transparent, secure,
and regulated crypto trading to an underserved European market,” commented
Armani Ferrante, CEO of Backpack Exchange.

However,
the challenge lies in CySEC’s suspension of FTX’s license following its
collapse, with the suspension being regularly renewed. The most recent
extension of the Cyprus Investment Firm (CIF) license suspension was issued on
November 5.

While the
company claims that license reactivation is underway and plans to launch
Backpack EU in Q1 2025, official CySEC documents indicate the suspension will
last until May 30, 2025, extending into Q2.

During this
period, the company cannot provide any investment services or accept new
clients. The regulator only permits the return of funds to clients affected by
the exchange’s collapse.

Moreover, Backpack
assumes responsibility for settling FTX bankruptcy claims from previous
platform clients.

“Customer
restitution is a crucial step to rebuild trust and confidence in the industry,
and Backpack is committed to returning FTX EU customers’ funds as fast and as
safely as possible,” added Ferrante.

Although
not among the largest platforms, Backpack secured $17 million in Series A
funding round earlier this year, reaching a total valuation of $120 million.
Moreover, it succeeded in completing an acquisition that reportedly attracted
interest from a much larger player, Coinbase, in late 2023.

History of FTX’s Collapse

The FTX
cryptocurrency exchange’s dramatic collapse unfolded over ten days in November
2022, triggered by a CoinDesk report revealing questionable financial practices.
The investigation exposed that Alameda Research, FTX’s sister trading firm,
held a significant portion of its assets in FTT, FTX’s own exchange token.

The
revelation of Alameda’s holdings sparked a crisis of confidence, leading to:

  • A mass
    exodus of customer funds
  • An $8
    billion shortfall in accounts
  • Blocking of
    customer withdrawals on November 8, 2022
  • Chapter 11
    bankruptcy filing on November 11, 2022

Sam
Bankman-Fried, FTX’s founder, was convicted and sentenced to 25 years in prison
for misappropriating $8 billion in customer deposits. John J. Ray III, known
for managing Enron’s bankruptcy, took over as CEO and discovered what he
described as “a complete failure of corporate controls.”

FTX
announced in January 2024 that it would not restart operations but instead
liquidate assets to repay customers. The reorganization plan approved in
October 2024 will provide 98% of creditors with 119% of their allowed claims
from November 2022.

Prior to
its collapse, FTX had established FTX Europe in March 2022, securing initial
approval from CySEC and the full CIF license in September.

This article was written by Damian Chmiel at www.financemagnates.com.

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Praxis Digital Trading Names Bea Picciano as Chief Operating Officer

Praxis Digital Trading Names Bea Picciano as Chief Operating Officer

January 7, 2025 6:42 pm |

Praxis Digital Trading, an FX and CFD firm with offices in
London, Hong Kong, and the Cayman Islands, promoted Bea Picciano as the Chief
Operating Officer. Picciano has been the company’s Senior Vice President for
Operations for more than four years.

According to her LinkedIn profile, the seasoned executive
joined Praxis from Empire Radiology Co, where she worked a four-month contract
as a Consulting Revamping Engineer. She also previously worked as Assistant Vice
President for Platforms Operations at Dynasty Financial Partners, Corporate
Recovery Consultant at CBIZ.

Extensive Career Background

Her career background also includes a role as Director of Operations for Gallant Capital Markets, based in New York, and an earlier role as Operations Assistant for Avenica Inc.

Company’s LinkedIn profile shows that Praxis Digital Trading
offers risk management, liquidity, and market-making services for more than 500
spot and CFD products such as FX, Indices, Commodities, stocks, and crypto CFD.
The firm is reportedly registered with the Cayman Islands Monetary Authority.

Around the same time, CMC Markets made several executive
appointments at its Singapore base, although most of the decisions were
finalized last year. The brokerage firm elevated Christopher Forbes to Head of
Asia, integrating the role across three brands: CMC Markets, CMC Invest, and
CMC Connect, the entity’s institutional division.

Other Notable Industry Executive Moves

MH Markets also welcomed Tim Sim as the Director of Global
Sales, according to his LinkedIn post today (Tuesday). Sim joined the company
after more than nine years of serving as the Head of Sales and Business
Development at Fullerton Markets. He has an extensive career background,
including roles at FXPRIMUS and at the Monetary Authority of Singapore (MAS).

“After an incredible 9 years with Fullerton Markets, today
marks the start of a new chapter in my career. I’m deeply grateful for the
invaluable experiences, growth, and relationships built during my time with
Fullerton. The journey has been nothing short of amazing, and I will always
cherish the memories made,” he wrote on LinkedIn.

“Excited to share that I’m stepping into a new and thrilling
role with MH Markets as Director of Global Sales. Looking forward to embracing
new challenges, expanding my horizons, and continuing to grow in this dynamic
industry.”

This article was written by Jared Kirui at www.financemagnates.com.

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US set to sell 10-year notes at auction at highest yield in over a decade

US set to sell 10-year notes at auction at highest yield in over a decade

January 7, 2025 6:41 pm |

Today will be a big test of real-money demand for 10-year US notes. The Treasury will sell $39 billion in a new issuance at 1 pm ET with the results minutes later.

Yields are higher by 8.1 bps today to 4.69%, which is the highest since April. A weak result would put the April high of 4.74% under pressure while anything over 4.61% would he the highest in more than a decade. Yesterday, a three-year note sale tailed by 1.2 basis points and that led to broadly higher yields.

The bigger driver today has been a pair of strong US reports on job openings and ISM services, which also including a jump in the ‘prices paid’ component. The market is pricing in just 35 bps in US easing this year with no cuts fully priced in until July.

Another big question is what happens on the fiscal side in the US. Trump appears to be pressuring Congress to raise the debt limit and run large deficits to pay for an extension (and expansion) of his 2017 tax cut. The President-elect will be speaking at Mar-a-Lago imminently.

Here is what BMO says ahead of the sale:

“Headline risk
related to Trump’s initial actions in the White House is fostering a meaningful
degree of inflationary angst at the moment. This is to say nothing of the
bearish underpinnings of growing deficit concerns, a resilient aggregate demand
profile, sticky inflation, and the fact that New Year’s optimism is currently
defining the agenda. All things considered, we’re biased for a tail at 1pm EST.”

This article was written by Adam Button at www.forexlive.com.

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