Bitcoin soars to new all-time high

Weekly crypto wrap: 7th November 2024

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TLDR

• Bitcoin soars to new all-time high, as Trump takes the presidency.
• BlackRock leads the charge as Bitcoin ETFs hit new milestone.
• RBA holds rates; inflation rises in October, target still distant.
• Real Vision: Navigating the bull Liquidity-driven crypto cycle projections.
• Tether's third-quarter profit soars to US$2.5 billion.
• US job growth slows sharply amid strikes & hurricanes impacting employment.

BTC Markets announcements

ICYMI: New mobile app release – in-app card deposits!

We have launched a convenient new feature on the BTC Markets mobile app: in-app card deposits. Now you can easily and securely deposit AUD to your account using an Australian-issued VISA or Mastercard credit or debit card.

Here’s what’s new:

• Simple and secure deposits powered by Stripe.
• Apple Pay card deposits available for iOS users.
• Link deposits available on both iOS and Android.
• Input validation to minimise errors.

Fully verified customers can update to the latest app version or download the app from the App Store (iOS) and Google Play (Android) to start using card deposits.

For a step-by-step guide, see our help article on ‘How to deposit using a bank card’.

Read the announcement here.

Real Vision Deep Dives with Chief Crypto Analyst, Jamie Coutts.

In the latest Deep Dive preview from Real Vision’s Chief Crypto Analyst, Jamie Coutts. In this report, he discusses the impact of central banks’ extensive liquidity injections. A topic of growing significance as global financial systems navigate inflation, economic slowdowns, and currency instability.

Well, folks, the time has come. After a six-month hiatus, central banks are once again flooding the markets with liquidity as leverage and expectations reset, setting the stage for the next wave of the crypto bull market.

Before fear and greed take over, I’ve decided to map out what might lie ahead over the next 12 months or so. We’ll start by examining the liquidity cycle, then forecast Bitcoin, and finally explore broader sectors. This report is extensive, so while detailed analysis of the pockets of the market I expect to outperform will be covered in the next report, I will provide projections for sectors I believe will excel and price targets for my top assets—ETH, BTC, SOL, SUI, and NEAR—where my conviction is strongest. As I refine my modelling, future reports may adjust these targets.

Read Jamie’s preview report: Navigating the bull: Liquidity-driven crypto cycle projections | BTC Markets

BTC Markets shortlisted for DECA Blockies Award!

We’re excited to share that BTC Markets has been named a finalist for the Digital Currency Exchange of the Year at the prestigious Digital Economy Council of Australia (DECA) Blockies Awards!

This nomination reflects our dedication to providing a secure, reliable, and innovative trading platform for our clients, and we’re honoured to be recognised alongside the industry’s best.

The awards ceremony will take place in Sydney on November 21st, followed by an afterparty to celebrate with leaders from across the blockchain community. Thank you for being a part of BTC Markets’ journey – we couldn’t have achieved this without your support!

If you'd like to join us, tickets are available here.

2024 Singapore FinTech Festival

Financial crime: Anatomy of a scam.

BTC Markets CEO, Caroline Bowler will be a key panellist at the Singapore FinTech Festival, the world’s largest FinTech event. Appearing alongside Rene Michau, Global Head of Digital Assets at Standard Chartered, Amanda Wick, Principal at Incite Consulting, and Dina Mainville, Founder and President of Collisionless.

In this session, they will discuss "Financial Crime: Anatomy of a Scam" on Friday, 8 November, at the Regulation Stage. Don’t miss this chance to gain valuable insights into the pressing challenges facing the industry!

Register for your pass here.

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BTC Markets in the news

AFR: Money piles into crypto as Trump leads polls.

Adding to the positive sentiment for digital assets was the shift in political dynamics in the US state of Ohio, where Republican Bernie Moreno was poised to unseat Democrat Sherrod Brown, one of the most vocal anti-crypto figures in Congress.

“As one of the largest critics of digital assets, Brown’s potential defeat is being seen as a win for the crypto industry, further boosting market optimism,” said BTC’s head of finance, Charlie Sherry.

Read the full article here.

AFR: Aussie crypto exchanges see huge trading volumes

BTC Markets also reported a notable increase in trading volumes, particularly in $US50,000-plus trades, which have reached their highest levels since May 2024.

Adding to the positive sentiment for crypto is the shift in political dynamics in Ohio, where Republican Bernie Moreno is leading and poised to unseat Democrat Sherrod Brown, one of the most vocal anti-crypto figures in Congress.

“As one of the largest critics of digital assets, Brown’s potential defeat is being seen as a win for the crypto industry, further boosting market optimism,” said BTC’s head of finance Charlie Sherry.

Read the full article here.

News.com.au: Bitcoin price hits record high as Donald Trump moves closer to victory.

Traders believe a new president in the US could change the conditions for cryptocurrency and how it is regulated in America.

“As political dynamics continue to evolve, traders are adjusting their positions in anticipation of shifts in leadership and potential regulatory changes,” Charlie Sherry, head of finance and crypto analyst at BTC Markets, said.

“Trump’s strong polling numbers and the growing momentum in swing states have led to a significant reduction in betting odds for Kamala Harris, suggesting that the market is already factoring in the likelihood of a Trump win.

“This alignment with the latest polling data could explain the early signs of market movement, indicating that crypto investors are preparing for a potential shift in U.S. policy and regulatory direction.”

Read the full article here.

Investor Daily: Is Bitcoin pointing to a Trump victory?

According to digital asset exchange BTC Markets, it has seen a notable increase in trading volumes on Wednesday, particularly in $50K+ trades, which have reached their highest levels since May 2024.

“This uptick in market activity suggests growing investor interest, with many positioning themselves ahead of potential political shifts,” BTC Markets said.

“Adding to the positive sentiment for crypto is the shift in political dynamics in Ohio, where Bernie Moreno (R) is leading and poised to unseat Sherrod Brown (D), one of the most vocal anti-crypto figures in Congress.”

As one of the largest critics of digital assets, BTC Markets said that Brown's potential defeat is being seen as a win for the crypto industry, further boosting market optimism.

“Trump’s strong polling numbers and the growing momentum in swing states have led to a significant reduction in betting odds for Kamala Harris, suggesting that the market is already factoring in the likelihood of a Trump win.”

Read the full article here.

Ausbiz: Bitcoin rockets on early vote count.

Charlie Sherry from BTC Markets observes the crypto space reacting positively to Donald Trump's current lead in the presidential race. Bitcoin surges around 10%, suggesting market optimism for his presidency, given Trump's favourable stance on crypto and potential regulatory changes.

Charlie notes that changes in Congress, such as Sherrod Brown potentially losing his seat, might boost crypto sentiment. Trump has expressed intentions to replace SEC chairman Gary Gensler, and such a change is expected to impact the market. Bitcoin has historically rallied post-elections.

He highlights Bitcoin's ripple effect on altcoins, with Solana and Dogecoin seeing significant gains. Larger traders are driving the market movements, indicating smart money's involvement. Despite volatility, Charlie sees long-term bullish trends for Bitcoin and crypto, irrespective of the election outcome.

Watch the full interview here.

Capital Brief: Why Australia's crypto bros are all in on Trump.

Charlie Sherry, BTC Markets' head of finance, said the market will benefit purely by being able to reckon with who is in office until 2028.

"Short term uncertainty tends to be a bad thing, longer term it's bullish regardless because it removes the uncertainty of who's going to be in office," he said. "Whoever comes in hopefully will bring some structural change, whether it's regulatory or otherwise."

Read the full article here.

The Block: Spot bitcoin ETFs see $541 million in outflows, largest daily negative flow since May.

“After last week’s record-breaking inflows, some degree of rebalancing is expected, as investors take profits and adjust portfolios in anticipation of market volatility,” said Rachael Lucas, crypto analyst of BTC Markets. “The timing likely aligns with the upcoming U.S. election results as many market participants adopt a 'wait and see' stance amid heightened geopolitical and policy uncertainties.”

“Moving forward, ETF flows could be influenced by the election outcome,” Lucas told The Block. “Should results signal a crypto-friendly political environment, we might see renewed inflows and a bullish turn in sentiment. However, if there are signs of increased regulatory scrutiny, particularly following a Democratic win, we could see further outflows as investors respond with caution.”

Read the full article here.

The Block: BlackRock’s spot bitcoin ETF sees record-breaking $872 million net inflows, surpassing March peak.

BlackRock’s iShares Bitcoin Trust, the largest spot bitcoin exchange-traded fund by net assets in the U.S., registered over $872 million in net inflows on Wednesday. This marks the fund’s largest inflow since its January launch, surpassing the previous record high on March 12.

“The recent surge in BlackRock’s IBIT inflows is driven by several key factors, including central banks’ global shift towards reducing interest rates, which has boosted liquidity and made capital more accessible for investors,” said Rachael Lucas, crypto analyst of BTC Markets, adding that the anticipation of a pro-crypto Donald Trump win in the U.S. presidential election might have further boosted this trend.

“In the lead-up to the U.S. presidential election, BTC ETFs are likely to experience increased inflows as investors look to hedge against potential economic and policy shifts,” Lucas said. “This period could bring elevated volatility as markets react to polling data, policy announcements, and debates on the regulatory landscape for digital assets.”

Read the full article here.

State of crypto

• Bitcoin soars to new all-time high, as Trump takes the presidency.
• Record-breaking day for $IBIT as Bitcoin ETFs surge to US$6b in volume, outpacing major stocks.
• Swift, UBS, and Chainlink pilot uses blockchain for faster fund transactions
• Bitcoin ETFs hit new milestones as BlackRock leads the charge but face big outflows ahead of election volatility.
• Tether's third-quarter profit soars to US$2.5 billion.

The weekly trading stats as of Monday, November 4th at 11:00 am AEDT, based on data from Tradingview in USD.

Bitcoin soars to new all-time high, as Trump takes the Presidency.

Bitcoin has reached a new all-time high of AU$115k, following the announcement of Donald Trump as the 47th US President. In Wednesday's trading session, the "Trump Trade" saw Bitcoin surge by 9.81% on the BTC Markets exchange.

This sharp rally has been marked by a "god candle," as seen on the daily chart above. This green candle reflects a rapid surge in price, driven by increased buying activity and a quick shift in market sentiment, often signalling strong optimism among traders.

What is a “god candle?”

A sharp price spike, sometimes called a "god candle," signals high buying volume and a potential shift toward a more bullish market outlook. In crypto, a "god candle" typically refers to a large green (upward) candlestick that captures a steep price increase over a short time, often within a single trading session. These candles generally reflect a price jump of 10-20% or more within a day, or even in a single hour during periods of extreme volatility.

“God candles” often arise amid high liquidity and trading volume, capturing intense buying pressure triggered by significant events, surprise news, or shifts in sentiment. They tend to indicate a possible trend change and draw heightened trading activity, spurred by the excitement they generate in the market.

Ethereum and Solana also posted gains, lifting the broader crypto market. Trump’s recent support for crypto, including accepting digital asset donations for his campaign, has fuelled optimism among traders. Meanwhile, the excitement is compounded by upcoming events like the Fed’s rate decision and the US jobs report, keeping investors on edge as they navigate this heightened period of volatility.

Check prices.

Record-breaking day for $IBIT as Bitcoin ETFs surge to US$6b in volume, outpacing major stocks.

@EricBalchunas

According to Eric Balchunas, Senior ETF Analyst for Bloomberg, BlackRock’s Bitcoin Exchange Traded Fund ($IBIT) experienced its highest trading volume to date on Monday. The ETF saw US$4.1 billion traded, surpassing the daily volume of major stocks like Berkshire Hathaway, Netflix, and Visa.

This surge was accompanied by a 10% price jump, marking its second-best day since launching. In fact, across the broader market of Bitcoin ETFs, trading volume reached US$6 billion, the best day since the initial excitement when these funds launched. Most of these ETFs saw twice their average trading volume, underscoring the heightened interest and growing demand within this emerging asset category.

Swift, UBS, and Chainlink pilot uses blockchain for faster fund transactions.

Swift, UBS Asset Management, and Chainlink have successfully completed a pilot for tokenised fund settlements under Singapore’s Project Guardian, overseen by the Monetary Authority of Singapore (MAS). This project leverages Swift’s established global financial network, enabling smooth integration of tokenised fund transactions with traditional fiat systems without requiring blockchain-only payment methods.

By eliminating manual steps in processes like fund subscriptions and redemptions, Swift’s system demonstrated cost-efficient, real-time transactions. This advancement aligns with Chainlink co-founder Sergey Nazarov’s vision for hybrid payment systems, highlighting blockchain’s potential to streamline and scale digital finance. MAS deputy managing director Leong Sing Chiong acknowledged that while tokenisation holds promise, scaling remains a challenge requiring robust infrastructure.

Buy LINK/AUD on BTC Markets.

Bitcoin ETFs hit new milestones as BlackRock leads the charge.

Bitcoin ETFs are making headlines, pulling in nearly US$900 million in a single day. On Wednesday, these funds collectively surpassed the impressive threshold of 1 million BTC, with BlackRock's iShares Bitcoin Trust claiming a dominant share by attracting US$872 million. This surge brings the total inflows since the funds' approval in January to an astounding US$24.2 billion. At the current pace, analysts predict that Bitcoin ETFs could soon surpass the holdings of Bitcoin's mysterious creator, Satoshi Nakamoto, who still controls 1.1 million BTC.

However, the enthusiasm surrounding Bitcoin ETFs is not without its challenges. Despite record inflows last week, Bitcoin ETFs saw a significant outflow on Tuesday, with nearly 8,000 BTC withdrawn from US spot funds. Grayscale's holdings continue to shrink, having dropped almost 60% since the start of the year, while BlackRock remains a steady buyer. The current withdrawals reflect investor caution, as many adopt a wait-and-see approach ahead of the U.S. election. With market sentiment potentially swinging based on election results, a crypto-friendly outcome could bring fresh inflows, while tighter regulation might prompt more outflows. Historically, large inflows into Bitcoin ETFs have often been followed by price corrections, suggesting that a volatile 10% price swing on election day wouldn’t be surprising.

X: @EdmondsonShaun

Source: TheBlock.co

Check BTC/AUD prices

Tether's third-quarter profit soars to US$2.5 billion.

Tether just dropped some impressive numbers for Q3. The stablecoin issuer reported a whopping US$2.5 billion in net profits, bringing their total profit for the year to US$7.7 billion. The surge is largely thanks to US$1.3 billion earned from U.S. Treasury yields and an additional US$1.1 billion from the rising value of gold, which saw a 15% increase during the quarter.

As of September 30, Tether's reserves hit US$125.5 billion, with US$84.5 billion in U.S. Treasury bills alone. They’re also holding US$5 billion in gold and about US$4.8 billion in Bitcoin. Tether continues to play a crucial role in the digital asset ecosystem, maintaining its position as the third-largest cryptocurrency by market cap. Despite facing some scrutiny regarding U.S. investigations, Tether's CEO reaffirmed their commitment to U.S. regulations.

Crypto Fear & Greed Index

Source: Fear & Greed Index

The week ahead: economic events

Thursday, November 7th

• 1:00am Canada Ivey Purchasing Managers Index
• 10:30am Australia Balance of Trade
• 1:00pm China Balance of Trade
• 5:00pm Germany Balance of Trade
• 10:00pm United Kingdom Interest Rate

Friday, November 8th

• 5:00am United States Fed Funds Interest Rate
• 11:30pm Canada Unemployment Rate

Saturday, November 9th

• 1:00am United States Michigan Consumer Sentiment
• 11:30am China Inflation Rate

Tuesday, November 12th

• 9:30am Australia's Westpac-Melbourne Institute Consumer Sentiment index
• 10:30am Australia’s NAB business confidence index
• 5:00pm United Kingdom Unemployment Rate
• 8:00pm Germany ZEW Economic Sentiment Index

Wednesday, November 13th

• 11:30pm United States Inflation Rate

Source: trading economics

Market reflections

Overview

In October, the Reserve Bank of Australia (RBA) held interest rates steady despite rising inflation, indicating that targets remain a challenge. While the manufacturing sector struggles due to escalating construction costs, the services sector demonstrates growth. House prices declined, yet housing credit and dwelling approvals saw an uptick. In the US, job growth sharply slowed, affected by strikes and hurricanes, although the services sector experienced a boost, with the PMI reaching its highest since 2022. Meanwhile, China's manufacturing sector showed signs of recovery, the Bank of Japan maintained steady rates amid global economic considerations, and Euro Area inflation re-emerged alongside a narrowing Canadian trade deficit.

Australia

• RBA holds rates; inflation rises in October, target still distant.
• Manufacturing faces challenges as construction costs drive price increases.
• Services sector grows in October, but industry index shows decline in construction.
• House prices dip in October, while housing credit growth and dwelling approvals rebound.
• Retail sales stagnate in September, but job ads hint at festive hiring growth.

RBA holds rates steady as inflation eases, but long road to target remains.

On Tuesday, the Reserve Bank of Australia (RBA) held the cash rate at 4.35%, noting that while headline inflation has cooled, underlying inflation remains stubbornly high. Although inflation has dropped thanks to falling fuel and electricity costs, underlying pressures still need taming. The RBA doesn’t expect inflation to sustainably reach its target until 2026.

On the economic front, consumer spending has stayed resilient, especially among temporary residents, even as household budgets feel the pinch. Labour markets remain tight, with employment holding steady and record-high participation rates. However, productivity levels lag, and wage pressures have eased slightly.

October inflation gauge rises as RBA prepares for policy meeting.

The Melbourne Institute's Monthly Inflation Gauge saw an increase of 0.3% in October, bouncing back from a 0.1% rise in September and marking the highest level since July. This uptick comes just before the Reserve Bank of Australia (RBA) met to discuss monetary policy.

The central bank maintained the cash rate at 4.35% for the eighth consecutive time, concerns remain about persistent inflation momentum, particularly as indicated by the trimmed mean. Although headline inflation is projected to decline further, it is not expected to hit the 2 to 3% target until 2026.

On a positive note, Australia's annual inflation decreased to 2.8% in Q3 2024, down from 3.8% in Q2, the lowest figure since Q1 2021. Goods inflation has slowed significantly, while services inflation remains high. Additionally, the monthly CPI indicator increased by 2.1% year-on-year in September, a moderation from August's 2.7% rise, and has stayed within the RBA's target range for the second month.

CoreLogic dwelling prices see slight dip in October.

In October, CoreLogic reported that dwelling prices in Australia decreased by 0.3%, a slight decline from a 0.4% drop in September. Historically, dwelling prices have averaged around 0.51% since 1980, peaking at a whopping 5.5% back in June 1988 and hitting a low of -2.9% in September 1984.

On a brighter note, the value of new home loans for owner-occupied properties saw a minor bump of 0.1%, reaching AU$18.64 billion in September, but this growth is a lot softer than the 2.4% increase we saw the month before.

Meanwhile, investment lending for homes rose by 1.4% to AU$11.71 billion in August, following a more significant 5.4% jump in the prior month. Overall, it looks like the housing market is navigating some ups and downs!

Dwelling approvals rebound in September, with private sector dwellings leading the way.

In September, Australia’s dwelling approvals rose 4.4%, reversing a decline from the previous month, thanks to a boost in private sector approvals for multi-unit dwellings and houses. Approvals saw strong growth across Queensland (up 14.3%), Western Australia (11.4%), and South Australia (8.2%), though New South Wales saw a significant drop of 14.8%. Private house approvals were also up for the seventh time this year, led by gains in South Australia, Queensland, and Western Australia, while Victoria and New South Wales experienced declines.

Housing credit growth edges up, annual loan growth hits highest pace since May 2023.

In September, Australia’s housing credit grew by 0.5% from the previous month, a slight increase from August’s 0.4%. Private sector credit also rose 0.5%, while personal credit picked up to 0.3%. However, business credit eased to 0.6% growth from 0.7% in August. On an annual basis, overall loan growth reached 5.8%, marking the fastest pace since May 2023. These trends reflect steady but varied credit demand across sectors.

Aussie manufacturing struggles persist as Judo Bank PMI shows slight improvement.

In October, the Judo Bank Australia Manufacturing PMI rose to 47.3, up from 46.7 in September, but it still indicates ongoing struggles in the manufacturing sector for the ninth month in a row.

New orders have been declining for nearly two years, with export orders dropping sharply due to weaker demand from key markets. Although production is still down, the rate of decline has slowed, as manufacturers have been working through their backlogs at the fastest pace since May 2016.

Employment levels also took a hit, marking the fifth consecutive month of declines and the steepest drop since July. Companies are cutting back on purchasing, reluctant to stockpile raw materials amid falling demand.

Delivery times have stretched due to delays in the Red Sea region and Asia, and both shipping costs and input prices are on the rise. Despite these challenges, there's a glimmer of optimism among businesses, with many hoping for improved economic conditions to bolster future production.

Producer prices continue to rise as construction and property costs climb.

In the third quarter of 2024, Australia's final demand producer price index jumped by 0.9% quarter-on-quarter, following a solid 1.0% increase in the previous quarter. This growth outpaced market expectations of 0.7% and marks the 17th consecutive quarter of producer inflation.

Key drivers behind this increase included a 1.9% rise in fees from property operators, thanks to soaring rents, and a 0.9% boost from residential building construction, where rising labour costs and a shortage of skilled tradespeople are taking their toll.

Retail sales barely budge in September as August warmth wears off.

Retail sales in Australia inched up just 0.1% in September, falling short of the anticipated 0.3% growth and slowing sharply from August’s 0.7% lift. The cooling effect was felt across categories as the warmer-weather sales boost faded.

Household goods saw a modest 0.5% bump, and dining out nudged up by 0.4%, but other sectors, like clothing, food, and department stores, took a step back. On the geographical front, New South Wales, South Australia, and Western Australia showed minor growth, while trade slowed in Victoria, Tasmania, the Northern Territory, and ACT. Annually, retail trade rose by 2.3%, its softest pace in four months.

Job ads see modest increase, hinting at festive hiring.

The ANZ-Indeed Australian Job Ads experienced a modest rise of 0.3% month-over-month in October 2024, a notable slowdown from the upwardly revised 2.3% gain seen in September. Despite the weaker growth, this marks the second consecutive month of increases, likely driven by seasonal Christmas hiring. ANZ Economist Madeline Dunk pointed out that the broader labour market remains resilient, with job ads as a share of the labour force sitting just above the 2019 average.

Export prices continue to slide in Q3 as demand for key resources falls, while gold shines.

Australia’s export prices dropped 4.3% in Q3 of 2024, marking the third consecutive quarterly decline. Weaker demand from China affected iron ore, while a global drop in demand hit coal, which fell by nearly 9%. A bright spot, however, was non-monetary gold, which saw a 4.4% rise as central bank demand and global uncertainties boosted prices.

On the import side, prices also dropped by 1.4%, driven by lower petroleum prices and a stronger AUD. Meanwhile, gold imports and cocoa products offset the dip, supported by strong central bank demand and crop issues in West Africa, respectively.

Aussie commodity prices see slight lift in October but remain down year-on-year.

Australia’s commodity prices dipped 7.8% year-on-year in October, marking the 20th straight month of declines. This drop was largely due to lower iron ore and coking coal prices. However, on a monthly basis, prices rose by 4.1%, with gains across non-rural, rural, and base metal commodities. In Aussie dollar terms, the index also saw a modest 4% increase in October, offering a glimmer of resilience amid the longer-term downturn.

Services sector powers forward in October, but manufacturing lags behind.

October brought a positive shift for Australia's private sector, with the services sector marking its fastest growth since May 2022, thanks largely to robust domestic demand in areas like finance and insurance.

The Judo Bank Australia Services PMI climbed to 51.0, extending nine months of continuous expansion, though export activity declined for the second month in a row. Input and wage costs eased, leading to the lowest input inflation rate in nearly four years, but companies raised prices to balance recent cost pressures. Employment in services grew at its quickest rate in five months, helping to clear backlogs and boosting early Q4 optimism as businesses anticipate stronger sales ahead.

The composite PMI also nudged into positive territory, reaching 50.2, driven by gains in services that offset ongoing declines in manufacturing output. While cost pressures eased in both sectors, companies continued to raise prices, aligning output inflation with the long-term average. Optimism picked up at the start of Q4, reflecting cautious optimism across the private sector as it looks toward a stronger economic outlook.

Australia’s industry index declines, with construction sector facing sharp contraction.

In October, Australia’s Industry Index dropped to -28.8 points, down from -18.6 in September, highlighting ongoing contraction across the industrial sectors. The construction industry saw a steep decline to -40.9 points from -19.8 the previous month, marking significant weakness in the sector.

In contrast, the manufacturing index showed some recovery, improving to -19.7 points from September’s low of -33.6, although it remains in contraction territory. Overall, these figures reflect a challenging environment, particularly for construction, amid broader industry headwinds across Australia.

Global

• US job growth slows sharply in October amid strikes & hurricanes impacting employment.
• Services sector in the US gains momentum as October PMI reaches highest level since 2022.
• China's manufacturing recovery gains momentum as PMIs signal growth.
• Bank of Japan keeps rates steady while eyeing global economic shifts.
• Euro Area inflation makes a comeback as energy prices shift.
• Canada's trade deficit narrows but still surprises on the downside.

United States

US job growth slows sharply in October as strikes and hurricanes weigh in.

In October, the US added only 12,000 jobs, a huge drop from September’s revised 223,000 and well below forecasts of 113,000. This is the slowest monthly growth since December 2020 and reflects the impact of Boeing strikes and possibly hurricanes, although the exact effects weren’t measurable. Healthcare and government jobs saw gains, while manufacturing and temporary jobs suffered losses, with manufacturing alone down by 46,000 positions. The unemployment rate held steady at 4.1%, in line with expectations, while the participation rate inched down slightly to 62.6%.

US services sector picks up steam as October PMI hits highest point since 2022.

The ISM Services PMI rose unexpectedly to 56 in October, its strongest level since August 2022, up from 54.9 in September and well above forecasts of 53.8. This growth was largely due to a recovery in employment and slower supplier deliveries, indicating an easing in supply chain pressures. While some areas like business activity, new orders, and inventories grew at a slower pace, price pressures eased slightly, providing some relief. Panellists highlighted concerns over political uncertainty and impacts from recent hurricanes and port labour issues, though the longshoremen’s strike had less impact than anticipated due to its brief duration.

US manufacturing slump deepens in October as demand, production, and orders fall.

The latest ISM Manufacturing PMI report shows US manufacturing took another hit in October, dropping to 46.5—its lowest level since July 2023 and well below forecasts. Weak demand, falling production, and shrinking inventories led the downturn, while price pressures rose sharply. New orders and employment also dipped, though at a slower pace. Companies are still right sizing their workforces to match the lower demand, indicating caution about future growth.

US inflation nudges up as consumer spending shows resilience.

In September, the US core PCE price index, the Federal Reserve’s favourite measure of inflation, rose by 0.3% from the previous month—the highest increase in five months. This increase followed a revised 0.2% rise in August and came in line with market expectations. While service prices climbed by 0.3%, goods prices dipped by 0.1%. Year-on-year, core PCE prices increased by 2.7%, exceeding forecasts of 2.6%.

On the personal income front, Americans saw a rise of 0.3% in September, bringing total personal income to nearly US$24.95 trillion. This growth is a good sign for the US economy, especially with employee compensation continuing to rise. Personal spending also gained momentum, increasing by 0.5% and reaching an annualised rate of US$20.024 trillion. This uptick in consumer spending reflects a robust economic environment, providing the Federal Reserve with room to maintain higher interest rates as it tackles inflation.

China

China's manufacturing recovery gains momentum as PMIs signal growth.

China's manufacturing sector is showing promising signs of recovery. In October, the Caixin General Manufacturing PMI climbed to 50.3, up from 49.3 in September, exceeding market expectations of 49.7. This increase marks a notable rebound, especially considering the PMI has averaged around 50.11 since 2011, with a peak of 54.90 in November 2020.

Similarly, the official manufacturing PMI also rose to 50.1, indicating a return to expansion after months of contraction. This improvement, the first since April, was largely driven by stronger output and the effects of stimulus efforts, while new orders remained stable after a prolonged decline. Despite a deeper drop in foreign sales, there are indications of stabilisation, as contractions in purchasing and employment slowed. Moreover, input prices rose for the first time since May, and business sentiment has reached a four-month high, suggesting cautious optimism for the future.

Japan

Bank of Japan keeps rates steady while eyeing global economic shifts.

The Bank of Japan (BoJ) has decided to keep its key short-term interest rate at around 0.25%, marking the highest level since 2008 and aligning with market expectations. This decision, made during the October meeting, comes as Japan navigates a changing political landscape following recent elections, alongside the anticipation of the US presidential election. Governor Kazuo Ueda expressed concerns over the uncertain global economic outlook, stating that the bank has time to assess risks after the recent rate hikes in March and July. The BoJ remains committed to adjusting rates further if economic indicators align with its forecasts. In its quarterly outlook, the BoJ maintained its core inflation projection at 2.5% for FY 2024, with expectations of around 1.9% for FY 2025 and FY 2026. Additionally, the bank retained its GDP growth forecasts at 0.6% for 2024, 1.1% for 2025, and 1.0% for 2026.

Euro Area

Euro Area inflation makes a comeback as energy prices shift.

Annual inflation in the Euro Area jumped to 2% in October, up from 1.7% in September, surpassing forecasts of 1.9%. This increase was anticipated, as last year's steep declines in energy prices are no longer impacting the annual figures. Energy costs fell at a slower rate, while prices for food, alcohol, and tobacco saw a rise. Core inflation, excluding volatile items, held steady at 2.7%, the lowest since February 2022.

In France, the annual inflation rate edged up to 1.2%, driven by rising food prices, especially fresh products, and a smaller decline in energy costs. Meanwhile, Italy’s inflation ticked up to 0.9%, remaining below the Eurozone average, as food prices surged significantly. Overall, the shifting landscape of inflation reflects ongoing changes in the economic environment across Europe.

Canada

Canada's trade deficit narrows but still surprises on the downside.

Canada’s trade deficit in September came in at CA$1.26 billion, smaller than August’s gap but wider than expected. Imports were down slightly as prices for essential goods fell, while exports also dipped, mainly in energy and metals. Gains in forestry products and aircraft sales helped offset some losses, but this marks the seventh straight month Canada’s trade has posted a deficit. Despite a minor improvement, the figures highlight some ongoing challenges in key export areas like energy and minerals.

Regulation round-up

Elizabeth Warren wins third term, defeats crypto advocate John Deaton in Massachusetts

Senator Elizabeth Warren has secured a third term in the Massachusetts Senate race, beating crypto advocate John Deaton. Warren, a staunch critic of crypto, has long championed stricter regulations, including anti-money laundering legislation. Deaton, supported by crypto leaders, opposed her policies, arguing they harm the working class and exclude many from financial opportunities. The candidates clashed over crypto issues, with Warren defending her regulatory stance while Deaton promoted Bitcoin as a tool for financial inclusion.

Scam awareness

Scammers target Aussies with 'remote access' tactics, stealing millions.

A chilling new scam is sweeping Australia, with criminals using sophisticated tactics to target unsuspecting individuals. In one instance, an elderly woman lost $8,400 after a six-hour call with scammers posing as NBN representatives. They convinced her to remain by her computer while they "upgraded" services, only for the scammers to later access her account. Despite efforts by her bank, only a small portion of the stolen funds were recovered.

This is part of a growing trend, with Australians losing over $5.8 million this year alone to remote access scams. These scams typically involve fraudsters pretending to be from trusted companies, tricking victims into granting remote access to their computers. With detailed information gathered from social media or the dark web, scammers exploit vulnerabilities in victims' knowledge of online security.

Remember the following:

• Never share sensitive information: Avoid giving out personal details, passwords, or security codes over phone calls, emails, or social media platforms, especially when unsolicited.
• Use trusted security software: Ensure your devices have up-to-date antivirus software and firewalls to block malicious access, and always enable two-factor authentication where possible.
• Verify contacts: Always verify the legitimacy of any unsolicited communication by contacting the company or individual through official channels before acting on requests or clicking links.

Experts urge Australians to remain vigilant and verify any unsolicited requests for personal information.

ASICs provides a checklist of common scams and ways to avoid them. To learn more, visit ASIC’s website.

Discover more on our ‘Compliance conversation’ blog page, where we share the latest updates on safeguarding against scams and protecting your assets. Stay informed and stay protected!

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