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Goldman Sachs and Nomura predict that the British pound will fall to a three-year low against the euro.Bank of England Chief Economist Peel: We need to continue to focus on the "last mile".On February 6th, the Peoples Bank of China and eight other departments issued a notice on further preventing and handling risks related to virtual currencies. The notice states that real-world asset tokenization refers to the activity of using encryption technology and distributed ledger or similar technologies to convert the ownership and income rights of assets into tokens or other rights or bond certificates with token characteristics, and then issuing and trading them. Conducting real-world asset tokenization activities within China, as well as providing related intermediary and information technology services, which are suspected of illegal token issuance, unauthorized public offering of securities, illegal operation of securities and futures businesses, illegal fundraising, and other illegal financial activities, should be prohibited; exceptions are made for related business activities conducted based on specific financial infrastructure with the approval of the competent authorities in accordance with laws and regulations. Foreign entities and individuals are prohibited from illegally providing real-world asset tokenization-related services to domestic entities in any form.On February 6th, eight departments, including the Peoples Bank of China, issued a notice on further preventing and handling risks related to virtual currencies. The notice states that strict supervision will be implemented for domestic entities conducting related business overseas. Without the consent of relevant departments in accordance with laws and regulations, domestic entities and their controlled overseas entities are prohibited from issuing virtual currencies overseas. Domestic entities directly or indirectly conducting real-world asset tokenization business in the form of foreign debt overseas, or conducting asset securitization or equity-based real-world asset tokenization business overseas based on domestic asset ownership, income rights, etc. (hereinafter collectively referred to as domestic equity), should be strictly supervised by the National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments according to their respective responsibilities, following the principle of "same business, same risk, same rules." Overseas subsidiaries and branches of domestic financial institutions providing real-world asset tokenization services overseas should act prudently and legally, equip themselves with professional personnel and systems, effectively prevent business risks, strictly implement customer access, suitability management, anti-money laundering requirements, and incorporate them into the compliance and risk control management system of domestic financial institutions.On February 6th, eight departments, including the Peoples Bank of China, issued a notice on further preventing and handling risks related to virtual currencies. The notice mentioned the continued crackdown on virtual currency mining activities. The National Development and Reform Commission, together with relevant departments, will strictly control virtual currency mining activities and continue to promote the rectification of such activities. Provincial-level peoples governments are fully responsible for the rectification of mining activities within their respective administrative regions. In accordance with the requirements of the "Notice on Rectifying Virtual Currency Mining Activities" (NDRC Operation [2021] No. 1283) issued by the National Development and Reform Commission and other departments, and the provisions of the "Guidance Catalogue for Industrial Structure Adjustment (2024 Edition)," they will comprehensively review, investigate, and shut down existing virtual currency mining projects, strictly prohibit new mining projects, and strictly prohibit mining machine manufacturers from providing mining machine sales and other services within the country.

EUR/USD Expects Fourth Weekly Gains Above 1.0900 Despite The US Dollar's Rebound Advance Ahead Of US NFP

Daniel Rogers

Apr 07, 2023 11:42

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Despite a recent retreat, the EUR/USD bulls maintain control around 1.0920. This reflects the typical Good Friday inactivity and apprehension ahead of the US Nonfarm Payrolls (NFP) report released early in the day. The major currency pair was volatile on Thursday as a result of the US Dollar's initial rebound on fears of a recession, but ended the day unchanged as disappointing US data contrasted with stronger Eurozone data.

 

Fears of a recession in the world's largest economy were prompted by consecutive lackluster US data and falling US Treasury bond yields, giving USD bears a reprieve on Thursday morning. As traders prepared for the all-important NFP, the dollar's subsequent gains were reversed by another disappointing US employment report.

 

Despite this, US Initial Jobless Claims for the week ending March 31 rose to 228K from 200K anticipated and an upwardly revised 246K the prior week. Notable is the increase in Challenger Job Cuts from 77,77K to 89,703K in the given month.

 

Notably, Reuters fanned fears of a recession by citing the most recent decline in the preferred bond market indicator of Federal Reserve (Fed) Chairman Jerome Powell. The most reliable bond market indicator of an imminent economic contraction, according to Federal Reserve research, is the "near-term forward spread" between the forward rate on Treasury bills 18 months from now and the current yield on three-month Treasury bills.

 

According to Reuters, International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated in prepared remarks on Thursday that the global economy is projected to expand by less than 3% in 2023, a decrease from 3.4% in 2022.

 

In other news, Germany's Industrial Production (IP) increased 0.6% year-over-year in February, versus market predictions of -2.7% and previous readings of -1.7%. Additionally, the monthly figures exceeded expectations by 0.1%, coming in at 2.0% compared to 3.7% previously. On Wednesday, Germany Factory Orders for February improved to -5.7% YoY from -12.0% previously revised down and -10.5% market expectations, while MoM growth came in at 4.8% compared to 0.3% expected and 0.5% previous readings.

 

Wall Street and US Treasury bond yields have both reduced weekly losses as a result of these strategies, but investors remain skeptical.

 

In the context of less liquidity surrounding the March US employment report, sporadic activity on the major markets can keep the EUR/USD inactive and prone to abrupt price swings. Notable is the fact that recent dovish Fed forecasts and disappointing US data generate expectations for a positive surprise and enormous price volatility thereafter.


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