Markets Digest

Market Performance

“Prepared at UTC 07.40 am”

Today’s Key Events

• US President Trump to Deliver Address to the Nation
• FOMC Members Waller, Williams, and Bostic to Speak
• US 20-Year Treasury Bond Auction
• US New Home Sales
• Eurozone and UK CPI Data to be Monitored
• Solv Protocol and Aster Token Unlockings

President Trump to Address the Nation Today

President Trump will address the nation today from the White House. According to the White House press secretary, Trump will summarize the “historic achievements” of the past year in his speech. He is also expected to provide a preview of some policy initiatives to be implemented in the new year. The speech is expected to contain messages regarding both the economy and monetary policy discussions. Markets will closely monitor any signals Trump may give regarding the Fed process.

US Nonfarm Payroll Data (October–November)

US non-farm payroll data for October and November pointed to clear signs of weakening in the labor market.

• Non-farm payrolls rose by 64,000 in November, exceeding market expectations of 50,000, while private sector employment rose by 69,000.
• The October nonfarm payrolls figure was reported at -105,000, marking the sharpest monthly decline recorded since the end of 2020. Private sector employment increased by 52,000 during the same period.
• On the revision side, September’s employment data was revised downward by 11,000 to 108,000, while August’s data was revised downward by 22,000 to -26,000. Thus, a total downward revision of 33,000 was made for August and September.
• According to the household survey, the November unemployment rate rose to 4.6%, exceeding the expected 4.5% and reaching its highest level since 2021. The October unemployment rate could not be announced due to the government shutdown, while the September unemployment rate was recorded at 4.4%.
• According to the ADP weekly employment report, employment in the US increased by an average of 4,750 people per week over the four-week period ending November 29, showing a total increase of 16,250 people.

US December PMI and October Retail Sales Data

December PMI and October retail sales data from the US pointed to signs of a moderate slowdown in economic activity.

• December Markit Manufacturing PMI (flash) came in at 51.8, below the 52.0 forecast and the previous reading of 52.2.
• The December Markit Services PMI (preliminary) came in at 52.9, significantly below the expectation of 54.0 and the previous reading of 54.1.
• The December Markit Composite PMI (preliminary) fell to 53.0, down from 54.2 in the previous month.
• October retail sales came in below expectations of 0.0% to 0.1% on a monthly basis. The previous month’s figure was also revised down from 0.1% to 0.0% (the initial estimate was 0.2%).
• Core retail sales (excluding automobiles, gasoline, building materials, and food services) rose 0.8% month-on-month, exceeding expectations of 0.4%; the previous period’s figure was -0.1%.

Divided Views on Interest Rate Policy Persist Within the Fed

Atlanta Fed President Raphael Bostic stated that he supports keeping interest rates steady in December and maintaining current levels throughout 2026. Bostic expressed concern that inflation is persistent and said he has not yet seen signs of acceleration despite the rise in unemployment. He emphasized that if inflation does not fall below 2%, households and companies may permanently price in high inflation. He also warned that early interest rate cuts could fuel inflation by increasing consumption among high-income groups. These statements highlight the hawkish stance within the Fed.

Fed Spokesperson: Employment Data May Not Radically Change Interest Rate Cut Expectations

Nick Timiraos, known for his proximity to the Fed, wrote that the latest nonfarm payrolls report is unlikely to significantly alter expectations for further easing. The employment data is considered weak enough to support Powell’s stance in favor of cuts at the last three FOMC meetings. However, it is said to be not weak enough to force another cut in January due to distortions caused by the federal government shutdown. Therefore, the December employment report is expected to be more decisive. The Fed’s short-term roadmap remains uncertain.

Trump Expands Pool of Candidates for Fed Chair

Trump is testing market reaction by adding Christopher Waller to his list of candidates as he continues interviews for the Fed chair position. On the prediction market Polymarket, Waller’s implied probability has fallen to around 30%, while Kevin Hassett’s probability remains around 50%. This picture shows that the race is still open. Trump is seen to be seeking balance by contacting different candidates. The final decision is expected to be announced in January.

Trump to Meet with Fed Chair Candidate Christopher Waller

Trump is reported to meet with Fed Chair Christopher Waller on Wednesday. Markets view Waller’s recent performance and consistent approach to interest rate cuts positively. Wall Street sees Waller as a strong candidate who can manage divisions within the Fed. It is noted that Chairman Powell has also embraced some of Waller’s arguments in favor of easing. In October, Waller ranked first among potential candidates in the WSJ’s economist survey.

Kevin Hassett: Fed Independence and Data-Driven Decision Making are Essential

Kevin Hassett, one of the leading candidates for Fed chair, emphasized the need to protect the Fed’s independence. Arguing that being close to Trump should not disqualify a candidate, Hassett stressed the importance of data-driven and consensus-based decision making. He said that if a wrong decision is made, it should be clearly acknowledged and corrected. Hassett stated that Trump is an experienced observer on economic matters and that strong arguments can find resonance within the Fed. The statements point to a conciliatory leadership profile.

Japan to Adopt Separate Taxation System for Crypto Assets

The Japanese government plans to implement a “separate declared taxation” system for crypto assets as of January 2028. Under the current system, crypto gains are considered “miscellaneous income” and taxed at rates up to 55%. The new regulation aims to tax crypto income at a rate of 20%, similar to stocks. While the market expects the regulation to come into force in 2027, political sources indicate that the process may take longer. Industry representatives consider this step a critical development that will increase competitiveness.

Russia: Cryptocurrencies Will Never Be Official Currency

Russian State Duma officials have announced that Bitcoin and Ethereum will never be the country’s official currency. It was emphasized that payments must be made only in rubles. It was stated that cryptocurrencies can only be used as an investment tool. Russia banned payments with cryptocurrencies in 2020. The Central Bank’s strict stance on this issue continues.

Lightning Network Network Capacity Reaches Historic High

The network capacity of Bitcoin’s second-layer solution, Lightning Network, has reached its highest level ever. According to Bitcoin Visuals data, capacity reached 5,606 BTC, surpassing the record set in March 2023. Amboss data shows that capacity rose to 5,637 BTC, worth approximately $490 million. Major exchanges such as Binance and OKX playing a significant role in this increase by depositing more BTC into the network. This development signals an acceleration in the adoption of the Lightning Network.

US-Based Lead Bank Becomes a Critical Hub for Stablecoin Companies

Kansas City-based Lead Bank has become the primary banking partner for numerous stablecoin and cross-border payment companies. The bank serves a broad customer network, including Brale, BVNK, Zerohash, and Stripe’s Bridge unit. This infrastructure also covers end-user applications such as Coinbase Wallet and Phantom. However, there is concern in the market that the concentration of fiat inflows in a single bank could pose systemic risk. It is noted that potential regulatory changes could affect many crypto companies.

MemeStrategy Increases Solana Investments

MemeStrategy announced that it spent HK$2.4 million to purchase 2,440 SOL. With this purchase, the company’s total SOL holdings reached 12,290. It was stated that the purchases were financed by the group’s existing cash reserves. The total investment cost is approximately HK$14.9 million. The company also plans to leverage its SOL holdings through staking.

Aave Founder Unveils 2026 Strategic Roadmap

Aave founder Stani Kulechov announced three key strategic focuses for 2026. These are listed as Aave V4, the institutional credit solution Horizon, and the mobile-focused Aave App. The new version aims to increase protocol efficiency and scalability. Horizon is expected to serve as a bridge to the corporate finance world. The mobile app aims to expand the user experience.

Whale Makes Over $25 Million in Profits on HyperLiquid

According to Lookonchain data, the whale named pension-usdt.eth made a large profit through consecutive transactions on HyperLiquid. The whale closed its long BTC position, earning a profit of $1.04 million. It then opened a short ETH position worth approximately $74 million. All 12 transactions it has made since December 8 have been profitable. The total profit is reported to have exceeded $25.20 million.

Goldman Sachs: Fed May Move Toward More Aggressive Interest Rate Cuts

Goldman Sachs predicts that the Fed may cut interest rates more aggressively than expected next year. According to the bank, the Fed may no longer view nonfarm payroll data as a primary indicator. Josh Schiffrin noted that Powell’s comments point to growing concerns about the labor market. He emphasized that the market’s focus will shift to the unemployment rate. Goldman Sachs estimates that the federal funds rate could fall to 3% or below by 2026.

SEC Files Lawsuit Against Shima Capital and Founder Yida Gao

The US SEC accused Shima Capital and its founder Yida Gao of defrauding investors. According to the agency, misleading statements were made to investors, and internal communications indicated that the fund would be liquidated. Emails in which Gao expressed regret for his wrong decisions were included in the file. Shima Capital was founded in 2021 and managed approximately $200 million in assets. The fund had invested in projects such as Berachain and Monad.

SEC Concludes Investigation into Aave Protocol

Aave founder Stani Kulechov announced that the SEC has closed its four-year investigation into the Aave protocol. It was noted that the process had placed a significant burden on the team’s resources and energy. Kulechov emphasized that the DeFi sector had been under unfair regulatory pressure for a long time. It was stated that this decision could mark the beginning of a new era for the sector. A more free environment for developers is expected to emerge.