Eurozone PMI Better Than Expected in January

Economic

Summary:

The composite PMI increased from 49.6 to 50.2. Though better than expected, it still corresponds to a stagnant economy with a contracting manufacturing sector. While price pressures are increasing again, the weak growth environment seems to take priority as the ECB gears up for more rate cuts.

Some positive news from the eurozone at last. It’s not much, but a small increase in the PMI to bring the level above 50 is at least something. The manufacturing sector saw an increase in its output index from 44.3 to 46.8, which still signals contraction but less so than before. The services sector continues to be the engine for growth, although the business activity PMI dropped slightly from 51.6 to 51.4. So overall, a roughly stagnant economy seems to persist for the moment.

Growth continues to be hampered by weak international demand. Export orders continue to decline for the moment and with US tariffs once again looming over the eurozone manufacturing sector, the outlook remains bleak. Interestingly though, optimism for manufacturers did increase in January, which shows that businesses are counting on improving growth over the course of the year. We think that’s fair to expect, but modestly and mainly driven by stronger domestic demand.

The European Central Bank (ECB) meets next week and another rate cut of 0.25ppt is widely expected, with more to come. The ECB itself seems okay with that view as we heard in Davos this week. Still, inflationary pressures are moderately increasing again and businesses indicate that they are pricing those higher costs through to the consumer according to the PMI. While the biggest inflation risks have abated, this shows that upside inflation risks are not yet a thing of the past.

Source: ING

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Cohen

Economic

Markets are still assessing Governor Kazuo Ueda’s press conference as we write, but the reaction in the yen to the whole event signals a hawkish surprise, primarily related to the upward revision in headline and core CPI forecast projections, ING’s FX analyst Francesco Pesole notes.

USD/JPY can be pushed into the 155.0 mark

“Policymakers now expect 2.4% inflation (up from 1.9%) in 2025 and the BoJ added that it will ‘continue to raise the policy interest rate and adjust the degree of monetary accommodation’, echoing the language used in the July statement. Some previous remarks by Ueda on potentially delaying the hike if markets proved too volatile following Trump’s inauguration have been clarified, with the statement highlighting that markets have been stable on the whole.”

“USD/JPY briefly traded below 155.0 this morning before paring back some losses as Ueda delivered a rather cautious tone at the press conference. He gave no indication about the timing for the rate hike or the pace of further tightening. Two-year JPY swap rates are up only modestly to 0.74%, signalling there is still room for a hawkish repricing down the line to help the yen.”

“We now expect two more hikes in May and October this year, which would help the yen counter the generalised dollar strength and keep some pressure on USD/JPY into the 155.0 mark.”

Source: FXSTREET

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Owen Li

Political

What to know:

Three applications for meme coin exchange-traded funds are currently under review by the Securities and Exchange Commission, tracking DOGE, TRUMP, and BONK.One ETF issuer believes that it will be difficult to deny those applications given one of them is issued by the President himself.

But meme coins don't typically have any utility, sparking an ethical debate on the launch of such a fund.It took institutions over a decade to take bitcoin (BTC) seriously as an investment vehicle, even though well-known financial pioneers had embraced the largest cryptocurrency on the market years earlier.

But not even one year after the launch of the spot bitcoin exchange-traded funds (ETFs) which saw adoption from pension funds, hedge funds and even universities, one issuer is taking it a step further.

The latest filings with the Securities and Exchange Commission aim to bring meme coin ETFs — such as those tracking dogecoin (DOGE) or U.S. President Donald Trump’s Trump coin (TRUMP) — to the market.

This isn’t just a bold move because DOGE and TRUMP are far less established and legitimate tokens, especially in Wall Street’s eyes, but meme coins provide no actual utility, unlike bitcoin or Ethereum's ether (ETH). Their value simply comes from how much people believe it is worth making the launch of an ETF tracking the coins an ethical debate.

“Opinions vary greatly on the value of meme coins. I fail to see their long-term value, but others have different opinions,” said James Angel, faculty affiliate at Georgetown University’s McDonough’s Psaros Center for Financial Markets and Policy. “However, a sponsor of an ETF based on meme coins needs to be very careful in the marketing of the ETF. It would be highly unethical to market such an ETF as a prudent investment vehicle.”

Steve McClurg, former CEO of Valkyrie and founder Canary Capital, a hedge fund that has applied for several non-meme coin crypto ETFs, said he is personally not a fan of memecoin ETFs and that while the firm considered filing an application, it ultimately decided not to.

“I don't know how you can be a fiduciary who runs an ETF knowing that the basis of your underlying [asset] is meant and designed to go to zero,” he said. Although meme coins aren’t technically designed to go to zero, they are highly susceptible to collapsing once the hype around them dies down.

Nevertheless, he believes that memecoin ETFs will eventually be approved. The former SEC under Chair Gary Gensler, who resigned on Monday after Trump became President, has so far approved several spot bitcoin and Ethereum ETFs but refused to acknowledge a potential Solana (SOL) ETF, for which several issuers had filed initial documents.

More than 30 other applications are still pending, three of them being tied to memecoins.

“It’s very hard for the SEC where the President chooses the commissioners to deny a meme coin put out by the President,” he said.

Meme coins have long divided the crypto community. Some find them fun to trade, as they can quickly bring in a large profit through so-called pump-and-dumps, but others find them troubling, especially when issued by the country's president.

“Call me old fashioned but I think presidents should focus on running the country and not launching scam tokens,” said Nic Carter, crypto influencer and venture capitalist.

Carter has been a vocal Trump supporter.Carter believes that there are multiple conflicts of interest when presidents start or run a business, let alone launch a cryptocurrency or DeFi protocol that they set policy for.

Source:coindesk

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Owen Li

Political

What to know:

After a few days of hand wringing from the eager crypto sector that wondered how long the wait would be for Trump's digital assets push, the U.S. president finally delivered his first major step toward a crypto policy.Executive orders don't tend to carry much legal weight, but they can set the tone of an administration on a specific topic.A fully regulated U.S. crypto industry may require a combination of congressional action, implementing rules from regulatory agencies and federal court rulings that back it all up.

U.S. President Donald Trump has come through with an eagerly awaited executive order on crypto that directs his administration to establish friendly policies to put the industry on solid U.S. footing and looking into establishing a "digital asset stockpile."

After years of courtroom combat with federal authorities, Trump's order issued on Thursday could allow the digital assets sector to move forward in the U.S. with a more welcoming framework set by the White House. Such orders are more of a beginning than an end in federal policy, but the pro-crypto president has taken that first step.

Bitcoin surged briefly above $106,000 from around $103,000 in the minutes following the news before retracing most of the gains. Recently, BTC changed hands at $103,500, down 0.51% over the past 24 hours.

Thursday's order said it would protect Americans from persecution if they developed software, were miners or validators or otherwise transacted "for lawful purposes."

The order created a working group, chaired by Trump's czar for crypto and AI (venture capitalist David Sacks) and composed of various Cabinet officials, the heads of the Securities and Exchange Commission and Commodity Futures Trading Commission and other White House officials. Though the order does not itself establish a strategic bitcoin reserve, it does direct the working group to "evaluate the potential creation and maintenance of a national digital asset stockpile."

e group has to identify all regulations that currently touch crypto within 30 days, recommend modifying or rescinding those regulations within 60 days and file a report with new recommendations within 180 days.

Trump's order additionally bans work on a U.S. central bank digital currency in his administration, saying that the agencies under his authority are "prohibited from undertaking any action to establish, issue, or promote CBDCs within the jurisdiction of the United States or abroad."

The executive order also revoked former President Joe Biden's 2022 executive order on crypto, and directed the Treasury Department to similarly revoke its digital asset framework stemming from that order.

When Trump had failed to issue the document among his opening flurry of executive orders, crypto insiders grew increasingly tense about the new relationship he's promised. But behind the scenes, leaders at the U.S. markets regulators — the Securities and Exchange Commission and Commodity Futures Trading Commission — were already prepping this week to move digital assets businesses out of the multi-year penalty box the previous agency officials kept them in.

Executive orders can present tricky legal questions. Neither Congress nor independent regulatory agencies — such as the SEC — are technically held to their demands, but Trump's Republican allies in those places are likely to defer to the wishes represented by the document.

The Republican-majority Congress has its own plans regarding crypto oversight, including reopening the legislative process that had already produced a market-structure and a stablecoin bill in the last session. It's unclear whether the process Trump is putting in motion will encourage lawmakers to pause their own efforts on crypto in the meantime.

"I look forward to partnering with President Trump and his team to bring clarity, choice, and opportunity to this important sector of our 21st century economy,” said Senate Banking Committee Chairman Tim Scott, a South Carolina Republican who just took over that committee, in a Thursday statement.

Source:coindesk

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Owen Li

Economic

The Japanese central bank lifted its target for the overnight call rate to 0.5% from 0.25%, making its third rate hike after ending the world's sole negative interest-rate policy in March. The bank previously raised the policy rate to 0.25% in July and had kept it at that level since.

A key factor for decisionmakers has been more clarity on U.S. policy under President Trump, with the BOJ wanting to see how markets would react to his inauguration and executive orders this week. With Japan's stock market and the yen both staying relatively calm in the wake of Trump's return to office, the backdrop looked conducive to a rate increase on Friday.

"The likelihood of realizing the [BOJ's economic and inflation] outlook has been rising," the bank said in a statement. The central bank also said that it will raise interest rates further if the economy and inflation develop in line with its projections.

The decision was well anticipated by market participants, who had almost fully priced in a January rate hike after recent comments from BOJ Gov. Kazuo Ueda and one of his deputies. Both said that the central bank's policy board would discuss whether to tighten monetary policy at the two-day meeting that ended Friday.

The bank's promise to seek more rate hikes sent Japanese government bond yields higher. The policy-sensitive two-year JGB yield briefly reached 0.725%, the highest level since October 2008, while the 10-year JGB yield jumped to 1.235%.

The yen see-sawed on the announcement but eventually regained its footing, trading at around 155.10 against the dollar, compared with around Y156.00 before the rate decision. The Nikkei Stock Average flitted between gains and losses after the announcement.

Mizuho Securities economist Yusuke Matsuo said the BOJ would consider further rate hikes at a pace of about once every six months, as it has done in the past, while maintaining its flexibility to respond to any changes in the financial environment. The brokerage expects the next tightening to come either in July or September.

"The next rate hike to 0.75% is a level never reached in the past 30 years and requires more careful consideration, so the chance of a September hike is somewhat more likely," Matsuo said.

Since the beginning of the year, BOJ policymakers have grown increasingly more confident about wage trends in Japan, an important element in the so-called virtuous economic cycle the central bank is trying to create in which higher wages lead to more spending and stable inflation.

In its quarterly outlook released Friday, the BOJ's policy board said it expects consumer inflation excluding volatile fresh food prices to reach 2.7% in the year ending March 2025, compared with the 2.5% it projected in October.

It predicts that the measure of inflation will rise 2.4% in the year ending March 2026 and 2.0% in the following year, the report showed.

The BOJ said that underlying inflation is expected to reach a level that is generally consistent with the bank's price target in the second half of the three-year projection period which runs through March 2027.

The policy board also expects the Japanese economy to expand 0.5% in the current fiscal year, compared with the 0.6% growth predicted previously. It forecasts growth of 1.1% and 1.0% in the year ending March 2026 and in the following year, respectively.

Source:morning star

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Warren Takunda

Cryptocurrency

Bitcoin circled $105,000 on Jan. 24 as “utterly confused” crypto markets failed to rally on news of a potential US buying spree. Crypto 'Confused' on Trump Stockpile as Bitcoin Price Rejects at $106K_1

Crypto 'Confused' on Trump Stockpile as Bitcoin Price Rejects at $106K_1

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

Bitcoin, crypto limp as US ditches “disastrous” red tape

Data from Cointelegraph Markets Pro and TradingView showed whipsaw BTC price behavior accompanying a new executive order by President Donald Trump the day prior.

Among other goals, this intends to “evaluate the potential creation and maintenance of a national digital asset stockpile and propose criteria for establishing such a stockpile.”

The Trump administration further rescinded controversial legislation from the Securities and Exchange Commission (SEC) known as SAB 121 — something that pro-Bitcoin Senator Cynthia Lummis called “disastrous for the banking industry.”

SAB 121 removed the ability for US banks to custody crypto.

“I am THRILLED to see it repealed and get the SEC back on track to fulfilling its intended mission,” Lummis wrote in part of a recent post on X. Crypto 'Confused' on Trump Stockpile as Bitcoin Price Rejects at $106K_2

Crypto 'Confused' on Trump Stockpile as Bitcoin Price Rejects at $106K_2

Total crypto market cap 4-hour chart. Source: Cointelegraph/TradingView

Far from celebrating, however, crypto markets themselves failed to find upward momentum. Bitcoin remained within its local range, even avoiding a retest of all-time highs as traders digested events.

Altcoins stayed flat, too, even as the executive order seemingly left the door open to their inclusion in the stockpile.

“The market seems utterly confused at the moment,” trader, analyst and podcast host Scott Melker, known as “The Wolf of All Streets,” summarized at the time.

Those hoping for Bitcoin to take the lead in US crypto policy appeared to all but entirely lose hope.

According to prediction service Polymarket, the odds of Trump creating a form of “Bitcoin reserve” during his first 100 days in office were now just 21%. Crypto 'Confused' on Trump Stockpile as Bitcoin Price Rejects at $106K_3

Crypto 'Confused' on Trump Stockpile as Bitcoin Price Rejects at $106K_3

Source: Polymarket

Commenting, some suggested that the market’s lackluster reaction was premature.

“It really is hard to emphasize how huge a sea change we're witnessing,” Bitcoin enthusiast Vijay Boyapati told X followers.

“We went from the worst conceivable anti-Bitcoin, anti-innovation, anti-growth, anti-business administration to the most friendly Bitcoin administration you could hope for. This is 100% not priced in.”

BTC price in “well defined consolidation”

Analyzing low-timeframe BTC price action, meanwhile, popular trader Skew saw cause for confidence.

“Despite lots of chop in the market charts actually look pretty good on 4H - 1D,” he argued in his latest X analysis.

Skew referenced a “well defined consolidation” taking place on BTC/USD, flagging $102,000 and $106,000 as the key levels for bulls to capture definitively. Crypto 'Confused' on Trump Stockpile as Bitcoin Price Rejects at $106K_4

Crypto 'Confused' on Trump Stockpile as Bitcoin Price Rejects at $106K_4

BTC/USDT 4-hour chart. Source: Skew/X

“$106,000 is what i want to see on Bitcoin today,” fellow trader Crypto Tony agreed.

An accompanying chart maintained an increasingly popular near-term BTC price target of around $122,000. Crypto 'Confused' on Trump Stockpile as Bitcoin Price Rejects at $106K_5

Crypto 'Confused' on Trump Stockpile as Bitcoin Price Rejects at $106K_5

BTC/USDT perpetual swaps 3-day chart. Source: Crypto Tony/X

Source: Cointelegraph

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Owen Li

Cryptocurrency

Interblockchain settlements protocol THORChain paused bitcoin (BTC) and ether (ETH) withdrawals on its lending and savers programs to prevent a potential insolvency risk.

Network node operators proposed and implemented a 90-day pause in early Asian hours on Friday, to formulate a plan to resolve debts, messages from THORChain's Telegram channels show.

THORChain's lending program only has BTC and ETH, but its saver vaults support more assets.

A potential insolvency situation could be created if all loans and savers positions were closed and repaid at exactly the same time, and if market sentiment also caused a steep decline in RUNE.

THORChain meets its lending obligations by minting RUNE and selling it into liquidity pools. As such, deposits had been turned off a year ago as the community became increasingly concerned with the risk at the time.

Some community members allege liabilities of nearly $200 million. Of that, some $107 million is contained in liquidity pools, which could be withdrawn or sold by liquidity providers (LPs) or RUNE holders in case of panic.

In the event of any large debt redemption and/or savers & synths deleveraging, it is certain that TC cannot meet its bitcoin and eth denominated obligations.

Source:coindesk

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Eurozone PMI Better Than Expected in January

Source: ING

JPY: Hawkish BoJ Hike

Source: FXSTREET

DOGE and TRUMP ETFs May be Coming But Should Institutional Investor Trade Them?

What to know:

Source:coindesk

Trump Issues Crypto Executive Order to Pave U.S. Digital Assets Path

What to know:

Source:coindesk

Bank of Japan Resumes Hiking Rates as Economy Strengthens

Source:morning star

Crypto 'Confused' on Trump Stockpile as Bitcoin Price Rejects at $106K

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

Bitcoin, crypto limp as US ditches “disastrous” red tape

Total crypto market cap 4-hour chart. Source: Cointelegraph/TradingView

Source: Polymarket

BTC price in “well defined consolidation”

BTC/USDT 4-hour chart. Source: Skew/X

BTC/USDT perpetual swaps 3-day chart. Source: Crypto Tony/X

Source: Cointelegraph﻿

RUNE Plunges 30% as THORChain Pauses Bitcoin, Ether Withdrawals

Source:coindesk

Risk Disclosure

Source: Cointelegraph