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On May 18th, French Economy and Finance Minister Jean-Michel Lescourt stated in an interview ahead of the G7 meeting in Paris that the French economy should return to growth in the second quarter and avoid a recession this year. The country unexpectedly stagnated in the first three months of the year, with unemployment rising to a five-year high. Lescourt said, "Clearly, the French economy stagnated in the first quarter, but for statistical reasons, I think it will rebound in the second quarter. My forecast for economic growth this year is 0.9%, while the market consensus is 0.8%, which is far from a recession, so lets have the best hopes." Lescourt noted that France has an advantage over other countries due to its reliance on nuclear power. He also stated that despite the "flaws" in Frances social model, increases in welfare and the minimum wage should cushion the impact of the economic slowdown.Futures News, May 18th: Since last weekend, the price of waste corrugated cardboard has seen sporadic increases. Domestic leading paper mills have appropriately raised their purchase prices by 20-30 yuan/ton, with surrounding paper mills following suit. Overall, the market sentiment is cautious. As of May 18th, the average market price of waste corrugated cardboard is estimated at 1668 yuan/ton, an increase of 5 yuan/ton from the previous trading day, representing a rise of approximately 0.30%. In the short term, heavy rainfall is expected in central and eastern China and North China, which will affect waste paper trading. However, downstream paper mills generally have good demand, which may lead to an increase in waste corrugated cardboard prices.On May 18th, it was learned from the Ministry of Human Resources and Social Security that the State Council issued the "Action Plan for Stabilizing Employment, Expanding Capacity, and Improving Quality" today (May 18th), outlining 18 specific measures to promote employment and entrepreneurship among key groups such as college graduates and migrant workers. Regarding tapping employment potential across various channels and fields, the plan specifies: focusing on the consumption sector, building a matrix of renowned Chinese consumer brands, and carrying out employment promotion actions in the service industry; focusing on project construction, accelerating the construction of transportation, water conservancy, and other projects, and increasing the implementation of work-for-relief programs; focusing on the development of new-quality productive forces, implementing the "Artificial Intelligence+" action, accelerating the development of strategic emerging industry clusters, and accelerating the release of employment potential; focusing on peoples livelihood services, increasing support for domestic services, elderly care, childcare, and other life service industries, and strengthening human resource services in the health and wellness sector; focusing on coordinated regional development, cultivating distinctive county-level industries, strengthening labor brands, and expanding employment opportunities in the marine economy; and focusing on entrepreneurship driving employment, promoting models such as "scientific and technological achievements," "industrial development + entrepreneurship," "vocational skills + entrepreneurship," and "peoples livelihood needs + entrepreneurship."On May 18th, at the 2026 Tsinghua PBC School of Finance Global Financial Forum, Zhu Min, former Vice Governor of the Peoples Bank of China and former Deputy Managing Director of the International Monetary Fund, stated that AI will have some benefits and impacts on improving productivity and quality of life. In response, appropriate policies are needed to guide the use of AI, and stakeholders such as researchers, companies, and businesses need to contribute their perspectives to establish a protective mechanism.1. The Arrival of a "Double Inflation" in the US and Macroeconomic Data: US inflation data for April significantly exceeded expectations, with CPI rising to 3.8% year-on-year (the highest since June 2023) and PPI reaching 6% year-on-year (1.4% month-on-month, the largest monthly increase since March 2022). Traders have largely ruled out the possibility of an interest rate cut this year, and bets on rate hikes have intensified, pushing the 10-year US Treasury yield up to 4.596%, and the US dollar index breaking through the 99 mark, directly suppressing non-interest-bearing assets. 2. Official Change of Personnel at the Federal Reserve: The Senate officially confirmed Kevin Warsh as the new Chairman of the Federal Reserve, while former Chairman Powell remains on the Board of Governors. Market concerns exist that Warsh, who advocates for maintaining independence, promoting balance sheet reduction, and is somewhat hawkish, will dampen market liquidity expectations with his first official statement amid the higher-than-expected inflation. 3. US-Iran Geopolitical Situation "Precarious": Over the weekend, Trump hinted that the situation in the Middle East was "the calm before the storm," while the US proposed five harsh conditions, including handing over 400 kilograms of enriched uranium and not paying war reparations. A situation room meeting is expected on Tuesday to discuss resuming hostilities. The Iranian military responded strongly, and the Strait of Hormuz remains deadlocked. 4. Silver Supply Disruptions and Indian Tariffs: Perus energy emergency decree has raised concerns about reduced silver production at local mines. Meanwhile, the Indian government significantly increased the effective import tariff on gold and silver from 6% to 15% on May 13th. Dongwu Futures stated that this may negatively impact silver demand, and given silvers rebound to previous highs last week, there is objective pressure for profit-taking. 5. Everbright Futures View: Precious metals are currently facing a triple test: a severe blow from expectations of a US interest rate cut, concerns about the new chairman Warshs hawkish stance, and the precarious state of the US-Iran ceasefire. It is recommended to lower gold price expectations for the first half of the year, buy on dips, but avoid overweight positions. This week, the focus should be on Warshs first public speech since officially taking office. If he releases a hawkish signal, gold prices may further decline to previous lows. (The above content is compiled from publicly available market data and is for reference only, not investment advice.)

Crypto Collapse Intensifies as Stablecoin Tether Slides Below Dollar Peg

Jimmy Khan

May 13, 2022 09:56

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The collapse of TerraUSD, one of the world's biggest stablecoins, sent ripples through cryptocurrency markets on Thursday, driving Tether below its dollar peg and bringing bitcoin to 16-month lows.


Cryptocurrencies have been caught up in a sell-off in risk assets that has gained traction this week as data revealed rising US inflation, escalating investor concerns about the economic implications of aggressive central bank tightening.


According to CoinMarketCap statistics, the overall market value of all cryptocurrencies has dropped to $1.2 trillion, less than half of what it was in November.


According to CoinMarketCap price data, Tether, a reserve-backed stablecoin that is meant to be linked 1:1 to the US dollar, fell as low as 95 cents earlier in the worldwide session. It was last available for 99 cents.


Despite the volatility, US Treasury Secretary Janet Yellen said that stablecoins like as Tether and TerraUSD do not now constitute a systemic danger to the financial system.


"I wouldn't describe it at this size as a significant danger to financial stability," she said at a House Financial Services Committee hearing, "but they're developing extremely quickly and they bring the same kinds of hazards we've seen for centuries in connection with bank runs."


Bitcoin, the most valuable cryptocurrency, fell to $25,401.05 on Thursday, its lowest level since December 28, 2020. It was last trading at $28,751, down 0.9 percent.


It has lost more than a quarter of its value in the last eight sessions, or roughly $10,700, and is down 37 percent this year, trading far below the record of $69,000 it reached in November 2021.


According to Refinitiv statistics, Bitcoin's correlation with the Nasdaq composite has lately increased and is currently around its all-time high. So far this month, the Nasdaq composite has down approximately 8%.


Ether, the world's second-largest cryptocurrency, hit a new low of $1,700, its lowest since June 2021.


Unlike earlier financial market sell-offs, when cryptocurrencies were mostly unaffected, the present selling pressure in digital currencies has cast doubt on the larger premise that they are reliable repositories of value in the face of market turbulence.

NOT-SO-STABLECOINS

TerraUSD, a stablecoin, has been impacted by the instability and has broken its peg to the US dollar, plummeting as low as 31 cents on Wednesday. It was selling about 38 cents on Thursday.


"Unfortunately, the consequences of this event extend beyond the financial losses suffered by investors," said Anto Paroian, chief operating officer of crypto asset hedge fund ARK36.


"If not for the whole crypto world, but definitely for the stablecoins market, de-pegging will almost surely result in a significant regulatory risk."


Stablecoins are digital currencies that are linked to conventional assets like the US dollar. TerraUSD, on the other hand, is an algorithmic or "decentralised" stablecoin that was meant to keep its dollar peg by a complicated system that entailed replacing it with a free-floating token.


Following the collapse of Terra's algorithmic stablecoin and the linked Luna token on Thursday, the network's blockchain was paused to avoid assaults. However, the Terra blockade has subsequently been reopened.


Terraform Labs, the business behind the TerraUSD, has a non-profit partner called the Luna Foundation.


On Thursday, even stablecoins backed by conventional assets showed symptoms of stress.


According to CoinMarketCap statistics, Tether fell below its 1:1 dollar peg on Thursday, reaching a low of 95 cents around 0724 GMT.


Tether's chief technical officer, Paolo Ardoino, claimed in a Twitter Spaces conversation that the stablecoin has decreased its exposure to commercial paper in the previous six months and currently has the bulk of its reserves in US Treasury bonds.


Tether is the most valuable stablecoin by market capitalization, accounting for about 87 percent of the whole $169.5 billion stablecoin market, according to CoinMarketCap.


According to Denis Vinokourov, director of research at Corinthian Digital Asset Management, the enormous number of centralised cryptocurrency exchanges and decentralised venues, each with their own liquidity profile and credit risk, was contributing to price distortions throughout the market.

"The fragmented character of the market contributes to spillover effects into other stablecoins," Vinokourov stated.


The effect of TerraUSD's problems on investors is still being assessed by market participants.


The Federal Reserve of the United States cautioned on Tuesday in its biannual Financial Stability Report that stablecoins are susceptible to investor runs because they are backed by assets that might lose value or become illiquid in times of market stress.

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