Another day, another roadblock. The SEC has filed a complaint against Coinbase after going after CZ and his Binance empire, alleging violations of securities laws. Binance is accused of allowing illegal trading and exerting control over its U.S. operations, while Coinbase faces allegations of operating as an unregistered exchange. Both companies have responded, with Binance denying the charges and Coinbase's CEO citing unclear ground rules by the SEC. The news has caused a slight dip in the Bitcoin and altcoin markets, raising questions about the regulatory environment and the future of these prominent cryptocurrency exchanges. It is unsure when the crypto dream as a legitimate currency will be realised, although FedNow and CBDCs are actively being researched and pushed mainstream.
The US stock market ended the day on a positive note as investors eagerly awaited the release of inflation data and the upcoming FOMC meeting next week. There was a shift in investor focus from the top-performing stocks to a broader range of options, indicating a growing sense of optimism. Additionally, regional banking stocks contributed to the market's gain, with the majority expecting a rate pause.
Gold prices held steady at the 1960 level. A weaker dollar strengthened support for gold, while reduced inflation pressures and forthcoming economic data will provide additional insights. While there is anticipation of a rate pause, the possibility of a rate hike in June could affect the attractiveness of gold in a high-interest rate environment for longer as outflows from gold ETFs rise steadily.
Oil prices were muted in Asian trade despite OPEC's supply cuts, and mixed US inventory data further dampened sentiment. The pledge of more production cuts initially led to gains but was later reversed due to weak economic data. The US Energy Information Administration predicts tightening oil markets in the second half of the year, supporting prices, but concerns over sluggish demand and global recession fears continue to depress oil prices.
The U.S. dollar strengthened against the euro and yen, while the Australian dollar surged after the Reserve Bank of Australia unexpectedly raised interest rates. The Fed is likely to pause in June to assess the impact of higher rates on the economy before potentially resuming increases in July, but analysts expected that the move would be disruptive. The focus now is on the Bank of Canada's upcoming policy meeting.