Wednesday, May 3, 2023

Crypto market evolution offshore, banking crisis triggers, employment signals and more...

“True knowledge is knowledge of why things are as they are, and not merely what they are.” – Isaiah Berlin ||

Hello everyone! It’s FOMC time again, and let’s take a moment to reflect on how extraordinary these times are that we look forward to tuning into a central bank press conference to see what sparks might fly. What passes for entertainment these days…

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WHAT I’M WATCHING

• The FOMC meeting, of course. The 25bp hike is not really in question; the drama will come from the wording of the statement, whether Chair Powell actually uses the term “pause”, and how many times “will be” is substituted for “may be” when it comes to actions going forward. Surely someone’s drawn up a Fed bingo card?

• Employment data. Today we get ADP non-farm payroll data, often taken as a leading indicator for the official Bureau of Labor Statistics numbers since it usually comes out two days before. But not always. More on this below.

• Banking crisis triggers. Rather than ask “which bank is next?”, we should be asking “which asset class will be responsible?”. More on this below.

• Coinbase offshore. The move to open a perpetual futures exchange in Bermuda is a loud message in more ways than one. More on this below.

• More NFT utility. Sports Illustrated is launching an NFT ticketing platform, which in theory will not only streamline purchase, transfer and verification, but will also enable event organizers to embed engagement opportunities such as connections, contests, freebies and post-event highlights. In the end, the usability of the wallet is a key and often overlooked feature of digital ticketing – Sports Illustrated has teamed up with Consensys, which runs the Metamask Ethereum wallet and knows a thing or two about user retention. This is a use case to watch.

MARKETS

It’s all about jobs

Yesterday, I wrote about how I think it is likely we are about to see a notable move upward in the US unemployment rate. The latest job openings data for March, released yesterday, also points to this –  the number of available positions dropped for the third-straight month to the lowest level in two years, lower than most economists had predicted. Layoffs reached the highest level since December 2020.