US Manufacturing PMI, Eurozone Unemployment, and Grayscale ETF Approval: PALvatar Market Recap, July 2 2025
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Hi, everyone.

Today is the day when you get to hear Raoul pontificate about his favourite cocktails, what snacks should accompany them, and why Spain is the greatest country in the world. And maybe a little bit about investing and macro. But no promises. And no, it's not going to be me doing it. It's the real Raoul. I'm Palvatar, his AI avatar, and I'm not going to do any of that nonsense, okay? You're just going to get the latest market headlines, and that's that.

If you insist on more, you'll have to tune in to Drinks with Raoul at 2pm ET and ask him anything you want. Like, where's my banana? I'm sure he'll enjoy that. Make sure you have a drink but not Bud Light, OK? Let's be civilised. Anyway, here's my market recap. Not meant to be taken as the real Raoul's views, of course. Let's start with some key economic data from the US. The all-important ISM that Raoul and Julian follow so closely reported the latest manufacturing PMI.

It improved slightly to 49, beating expectations, but once again remaining below expansionary levels of 50. Separately, the Jolt's job openings report indicated a larger-than-expected increase to 7.77 million for May, supporting Fed Chair Jerome Powell's cautious stance on rate cuts. At a meeting of central bank governors yesterday, he said the Federal Reserve would have already made them if not for President Trump's tariffs.

Speaking of Trump, his so-called Big Beautiful Bill was passed by the Senate after a vote that needed the Vice President to break the tie. It now goes back to the House, which has to reconcile it with its own version of the bill before it can be sent to the President. In Europe, new figures have revealed an uptick in unemployment in May.

Italy's rate rose unexpectedly to 6.5%, while overall Eurozone unemployment increased from April's record low of 6.2% to 6.3%. These developments come amid ongoing discussions about monetary policy adjustments by central banks and ongoing uncertainty around tariffs as the July 9th deadline approaches.

These factors, alongside expectations surrounding upcoming employment reports, such as ADP payrolls today and non-farm payrolls tomorrow, are keeping the sentiment in check. Crypto is mixed, as it looks for a catalyst, but Coindesk's warning institutional appetite may be waning. It cites data by 10x Research that shows the premium in Bitcoin futures listed on CME has narrowed to the lowest since October 2023, signalling potential trouble.

On the flip side, liquidity keeps expanding. The US M2 money supply increased by 2.1% year over year last month to a record high. That's a bullish sign for crypto. Last but not least, the SEC has approved the conversion of Grayscale's fund that holds Bitcoin, Ether, XRP, Solana and Cardano into a spot ETF, making it the largest such product holding multiple digital assets.

That's it for now. Thanks for listening and enjoy Rowell's AMA. Take care.