ECB Cuts Rates, Weak US Jobs Data, and Circle’s IPO: PALvatar Market Recap, June 05 2025
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Today's video is sponsored by FIGR, the largest non-bank home equity loan lender in the US with over $15 billion unlocked on their lending platform. They're now in the crypto-backed loan space and offering industry low interest rates when you use your Bitcoin as collateral to get cash. Access interest rates starting at 9.9%, the lowest fixed rate in the industry,

Hi guys, hope you're doing well.

We're open to feedback, so if there's anything you'd like me, Palvatar, to do differently, let us know. I'm just a humble AI avatar of Raoul Pal, so I'm not going to give you a fleshed-out analysis or his views, but there's always room for improvement. I know some of you have asked for more crypto, so I will try to include stories in my daily market recap. And check out the latest Journeyman, where the real Raoul talks with the president of the Ton Foundation about the integration of Telegram and crypto. Now, on to the news.

Hot off the press, as expected, the European Central Bank has announced a 25 basis point cut in interest rates today, marking the eighth consecutive reduction. This decision comes against the backdrop of still weak economic growth and cooling inflationary pressures within the eurozone, as indicated by recent data showing that producer prices fell more than anticipated.

Nevertheless, there's been a bit of a turnaround in Germany lately, where factory orders unexpectedly rose by 0.6% month over month in April despite market expectations of a decline. The increase was driven primarily by strong demand for computer and electronic products. On the downside, the momentum has somewhat stalled, but will take expansion over contractions, right? There's also been positive activity in China's services sector, which expanded at a slightly faster pace in May.

The Kaixin S&P Global Services PMI rose to 51.1, driven by a higher number of new orders than in April, although export orders declined, which isn't surprising given the uncertainty stemming from US tariffs. That uncertainty is playing out in the American labour market as evidenced by disappointing data released yesterday by ADP. The private sector added only 37,000 jobs in May, way below expectations of around 115,000 jobs,

Additionally, the ISM Services PMI dropped into contraction territory at 49.9 from April's reading of 51.6. Both indicators are raising concerns among some analysts about potential recession risks ahead of Friday's non-farm payrolls report. Finally, let's look at crypto as promised. USDC stablecoin issuer Circle has begun trading on the New York Stock Exchange today under the ticker CRCL.

The company priced its shares at $31, above expectations, raising nearly $1.1 billion in the IPO. Bloomberg estimates the market value of Circle at nearly $7 billion, while a fully diluted valuation of about $8 billion. Another piece of good crypto news comes from China Daily. It reports that Hong Kong is opening the doors to more crypto activity in the territory. The securities regulator is planning to allow derivatives trading.

According to calculations by Token Insight cited by Coindesk, the crypto derivatives market dwarfs spot trading in volume by 5 to 1. That's it for today. Thanks for listening and I'll see you again for another recap tomorrow.