2024-03-08 17:26

NEW YORK, March 8 (Reuters) - A federal appeals court on Friday revived a lawsuit where investors accused Binance, the world's largest cryptocurrency exchange, of violating U.S. securities laws by selling unregistered tokens that lost much of their value. In a 3-0 decision, the 2nd U.S. Circuit Court of Appeals in Manhattan said investors in the proposed class action plausibly alleged that domestic securities laws applied because their purchases of tokens had become irrevocable in the United States once they paid for them. Circuit Judge Alison Nathan said Binance's use of domestic Amazon computer servers to host its platform supported this outcome, given how Binance "notoriously denies the applicability of any other country's securities regulation regime." The appeals court also said investors could pursue claims arising from purchases made within the year before they sued. Friday's decision reversed a March 2022 ruling by U.S. District Judge Andrew Carter in Manhattan, and returned the case to him. The appeal covered investors who had bought seven tokens - ELF, EOS, FUN, ICX, OMG, QSP and TRX - through Binance starting in 2017, and which soon lost much of their value. They claimed that Binance failed to warn them about the tokens' "significant risks" and sought to recoup what they paid. Binance argued that U.S. securities laws did not apply because its exchange was located outside the country. It cited 2010 U.S. Supreme Court decision, Morrison v National Australia Bank, that limited the extraterritorial reach of domestic securities laws. Binance and its lawyers did not immediately respond to requests for comment. Jordan Goldstein, a lawyer for the plaintiffs, said his clients were pleased that the court "unanimously acknowledged the strength of our claims." The case is separate from Binance's recent guilty plea and more than $4.3 billion penalty for violating federal anti-money laundering and sanctions laws. Binance founder Changpeng Zhao pleaded guilty to related money laundering violations and stepped down as chief executive. His sentencing is scheduled for April 30. The case is Lee et al v Binance et al, 2nd U.S. Circuit Court of Appeals, No. U.S. District Court, Southern District of New York, No. 22-972. https://www.reuters.com/technology/binance-must-face-revived-investor-lawsuit-us-over-crypto-losses-2024-03-08/

2024-03-08 17:19

March 8 (Reuters) - Bitcoin briefly rallied to a record high on Friday in volatile trading, as crypto mania continued to sweep through the investment community. The leading cryptocurrency topped the $70,000 mark for the first time, boosted by investor demand for new U.S. spot exchange-traded crypto products and expectations for global interest rates to fall. It rose to as high as $70,105 before quickly dropping, and was last trading at $68,317.72. Billions of dollars have flowed into ETFs in the past few weeks, and the market is getting extra support from an outlook that includes an upgrade to the ethereum blockchain platform, home to the second-largest cryptocurrency ether , and a bitcoin "halving" event, which slows the flow of bitcoin minting, in April. Still, some say it's hard to shake off the speculative nature of these assets. After hitting a record high on Tuesday, bitcoin sharply reversed course and fell more than 10% back below the $60,000 level. "Navigating old highs is notoriously tricky and the bitcoin dam doesn’t tend to burst at the first time of asking," said Antoni Trenchev, co-founder of crypto lending platform Nexo. "Volatility defines bitcoin bull markets, and 2024 will be littered with sudden and gut-wrenching 10%-20% plunges." The approval of 11 spot bitcoin ETFs by the U.S. Securities and Exchange Commission in late January marked a watershed moment for the industry, following an 18-month-long crypto winter plagued by a string of high-profile corporate bankruptcies and scandals. Even institutional investors, who once shunned crypto due to its sharp, wild moves, have begun committing long-term money, which analysts say could help sustain the latest leg of this rally. Net flows into the 10 largest U.S. spot bitcoin funds reached $2.2 billion in the week ended March 1, with more than $2 billion of that going into BlackRock's iShares Bitcoin Trust (IBIT.O) , opens new tab, according to LSEG data. The recent optimism over bitcoin has also spilled over to other digital tokens, particularly ether, which ranks second behind bitcoin in terms of total market value, up more than 60% since the start of the year. Ether was last up 1.62% at $3,939.84. Crypto stocks were also up on Friday, with shares of Coinbase (COIN.O) , opens new tab last higher at 8.2%, and crypto miners Riot Platforms (RIOT.O) , opens new tab and Marathon Digital (MARA.O) , opens new tab up 5.1% and 9.6%, respectively. https://www.reuters.com/markets/currencies/bitcoin-rises-record-high-over-70000-2024-03-08/

2024-03-08 14:42

FRANKFURT, March 8 (Reuters) - European Central Bank policymakers overwhelmingly back June for a first interest rate cut and some have informally floated the idea of a further move in July to win over a small group that would prefer an earlier start, three sources said on Friday. Several Governing Council members publicly expressed support on Friday for a rate cut before the summer as inflation in the euro zone is now falling faster than the ECB had anticipated. ECB President Christine Lagarde had hinted after Thursday's policy meeting that a cut was likely to come when the ECB meets on June 6, after key wage data has been released. The sources, all with direct knowledge of the discussion, said policymakers had spent relatively little time discussing rate cuts on Thursday, and that it was obvious a majority favoured a first move in June. But a few, all from the bloc's south, would still prefer an initial cut at the ECB's April 11 meeting. In a bid to secure a stronger consensus for a June move, some conservative policymakers floated the idea on the sidelines of the Governing Council meeting of pencilling in a second cut in July, the sources said. An ECB spokesperson declined to comment. The sources said no deal on such a compromise had been made and that it was merely a possibility being discussed informally as a way to maintain unity within the Governing Council. Such a move would not be unprecedented: in December 2022 the euro zone's central bank slowed the pace of rate hikes to 50 basis points but agreed on back-to-back moves at a steady pace to woo dissenters who favoured a bigger increase. Financial markets now expect four ECB interest rate cuts this year, starting in June, implying cuts at all except one meeting between June and December. The sources said the timing of its first move would also influence how a new operational framework - expected to be announced on March 13 - would be implemented. The new framework is likely to require a narrowing of the gap between the ECB's 4% deposit rate and 4.5% main refinancing rate, sources had told Reuters earlier. But some policymakers fear that what is intended to be a technical adjustment could be confused for a monetary policy shift, so they want to implement it later, when the ECB is actually changing interest rates. The sources added that tweaks to the minimum reserve requirement for banks, advocated by some policymakers in the past, are not currently part of the proposals. https://www.reuters.com/markets/europe/some-ecb-policymakers-float-back-to-back-june-july-cuts-sources-say-2024-03-08/

2024-03-08 14:37

March 8 (Reuters) - Morningstar DBRS downgraded the credit ratings of New York Community Bancorp (NYCB.N) , opens new tab to "BBB (low)" from "BBB", citing near-term pressure on earnings, the ratings agency said late on Thursday. The company, which cut its rating in February pointing to the lender's "outsized" exposure to commercial real estate loans compared to its peers, also said the trend on all credit ratings is now stable. Rival Moody's has also changed the direction of its rating view of NYCB to "review for upgrade" from "review for downgrade". The bank's shares were up nearly 1% in choppy trading on Friday, after ending the previous session up about 6%. NYCB on Wednesday raised $1 billion from investors, including former U.S. Treasury Secretary Steven Mnuchin's Liberty Strategic Capital, and named a former Comptroller of the Currency its new CEO. "The recently announced management change and capital raise from high-profile and experienced investors should help restore confidence in the company after a string of unexpected adverse announcements," Morningstar DBRS said. Shares in the bank, up in the last three sessions on improving investor sentiment and the capital infusion, remain down more than 60% for the year. The stock was last up 3% in premarket trading on Friday. NYCB also disclosed a 7% drop in deposits over the past month and reduced its quarterly dividend for the second time since January on Thursday. The bank came under renewed pressure last week when it disclosed "material weakness" in internal controls and revised its loss to more than 10 times of what was previously disclosed. https://www.reuters.com/markets/us/morningstar-dbrs-downgrades-nycb-by-notch-near-term-earnings-pressure-2024-03-08/

2024-03-08 14:16

March 8 (Reuters) - U.S. job growth accelerated in February, but a rise in the unemployment rate and moderation in wage gains kept on the table an anticipated interest rate cut in June from the Federal Reserve. Nonfarm payrolls increased by 275,000 jobs last month, the labor Department said on Friday. Data for January was revised down to show 229,000 jobs created instead of 353,000 as previously reported. Economists polled by Reuters had forecast 200,000 jobs added. MARKET REACTION: STOCKS: S&P 500 e-mini futures pointing to higher opening on Wall Street. BONDS: The U.S. Treasury 10-year yield fell to 4.074%. U.S. two-year yields slid to 4.450% FOREX: The dollar index fell 0.2% to 102.57. COMMENTS: JAMIE NIVEN, SENOR FUND MANAGER, CANDRIAM, LONDON "I think (bond markets rallied) primarily on the revisions element. I guess the big concern was that we were seeing a reacceleration in both economy and inflation in January, that was somewhat kicked off by the NFP numbers in January. So to see that being, let's be honest, revised quite substantially downwards is probably a relief for the market. So I think that element is certainly a positive, hence why we're seeing particularly the front end rallying... And also the average hourly earnings (coming in lower). That's very important, because that talks to the inflation concern." "But it is mixed... The headline number (was high) and I think if you look over the last four months, it's still almost a million jobs in four months. So it's still a pretty robust U.S. economy... I don't think it's a turning point." BILL STERLING, GLOBAL STRATEGIST, GW&K INVESTMENT MANAGEMENT, WINTER PARK, FLORIDA "Despite the shocking print of 275,00 versus 200,000 expected, they revised down both December and January pretty substantially, 167,000 lower than previously reported." "The initial impression was a big strong report, but when you look under the hood it was not that different from expectations and basically not a challenge to the Fed." "I don't think it changes perceptions much from prior to the report about when the Fed might cut rates. Then with the uptick in unemployment to 3.9% and also average hourly earnings being up just one-tenth of a percent, it's a relatively dovish number." LINDSEY BELL, CHIEF STRATEGIST, 248 VENTURES, CHARLOTTE, NORTH CAROLINA "It's a good report .. where there was a little uncertainty was the bump up in unemployment. That's a little concerning. It's significantly higher than the lows in the cycle. That's one thing we want to watch. But what was a relief for Fed watchers was that hourly earnings returned to a more normal spot." "It really kind of solidifies what Chair Powell was saying this week, about the confidence he had in the potential to begin the rate cutting cycle this year. So the market should be pleased with this report." "The economy's doing fine. Its slowing in an orderly manner, not too quickly. Its doing what the Fed needs." LINDSAY ROSNER, HEAD OF MULTI-SECTOR FIXED INCOME INVESTING, GOLDMAN SACHS ASSET MANAGEMENT, NEW YORK "As markets have generally been in 'more jobs, less cuts' mode, today's number pumped the breaks on that mantra. The more reasonable, albeit still strong, February print coupled with the two-month payroll net revision spoke to the larger theme of a tight-but-normalizing labor market and an environment that can lend marginally more confidence to the Fed who is looking to shore up their own … Big picture: these were helpful numbers for the Fed to gain confidence. Let's see what happens with the SEP dots." DON MONTANARO, PRESIDENT, FIRSTRADE SECURITIES, FLORIDA "We just have super healthy economy here. I really think moving too soon with an interest rate drop is potentially dangerous, and these are at most mixed signals we got here, with the unemployment ticking up a bit." "I see reasons for caution if I'm the Fed. It would be interesting to see the CPI number that will come out on Tuesday and then of course what the Fed says later on this month. But to me, there's much more risk to cutting rates than there are to leaving them alone right now." ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD, CONNECTICUT "The immediate takeaway is the focus on the unemployment rate going from 3.7% to 3.9%. More unemployment rate implies that the economy is slowing, which would, in the markets' view hopefully, necessitate a rate cut sooner rather than later. The figures revised downwards along with the unemployment rate is probably fueling a little bit of a rebound in the futures." PAUL NOLTE, SENIOR WEALTH ADVISER, MURPHY & SYLVEST, CHICAGO "The key here is the wage growth than anything else, which came in very modest and well below expectations. This feeds more into the inflation narrative than the strong jobs data. However, the job market data still shows a relatively strong labor force." "I don't think the data really means much to the Fed. They're much more focused on the inflation data and the fact that wage growth was modest is helpful, but that's the only part of the jobs data that I think the Fed is looking at." PETER CARDILLO, CHIEF MARKET ECONOMIST, SPARTAN CAPITAL SECURITIES, NEW YORK "The bottom line is this was a little bit hotter than we were looking for in terms of nonfarm and hourly wages as well, but if you look at the revisions, I think that is basically pointing to a less robust outlook going forward. That's probably why we're seeing the markets not negatively reacting." https://www.reuters.com/markets/us/view-feb-us-payrolls-show-labor-market-healthy-not-overly-tight-2024-03-08/

2024-03-08 14:15

March 8 (Reuters) - U.S. bond funds racked up large inflows in the seven days to March 6 as weaker manufacturing data and dovish comments from Federal Reserve officials raised expectations for interest rate cuts later this year. According to data from the London Stock Exchange Group (LSEG), investors pumped in about $10.54 billion into U.S. bond funds during the week in their largest weekly net purchase since end-June 2021. The robust inflows coincided with indications from U.S. central bankers that, despite recent inflation pressures, overall progress could allow for possible rate reductions. Fed Chair Jerome Powell's recent testimonies solidified this outlook. The yield on the two-year U.S. Treasury , closely tied to interest rate expectations and moving inversely to prices, experienced a notable decline last week, falling 15.7 basis points - its largest drop in six weeks. Specifically, U.S. short/intermediate investment-grade funds attracted $4.21 billion, the most since March 24, 2021. Additionally, general domestic taxable fixed income and government bond funds saw inflows of $4.65 billion and $1.35 billion, respectively. U.S. equity funds, meanwhile, attracted inflows for a second successive week, totalling about $1.2 billion on a net basis that topped $171 million worth of net buying in the prior week. The real estate, and consumer discretionary sectors witnessed significant buying interest as they received $1.11 billion and $777 million, respectively, the largest among sectoral funds. Parallelly, technology sector received $438 million, its second weekly inflow in a row. Money market funds, meanwhile, accumulated about $13.44 billion on a net basis during the week, a sharply smaller amount against $42.55 billion worth of inflows in the preceding week. https://www.reuters.com/markets/us/us-bond-funds-attract-biggest-weekly-inflow-since-mid-2021-rate-cut-hopes-2024-03-08/