CFTC hits Binance, Micron earnings, Netanyahu backs down - what's moving markets

·4 min read

By Geoffrey Smith -- Bitcoin wobbles after U.S. regulators clamp down on Binance. House price and consumer confidence data are due, Walgreens and Micron report earnings and oil extend gains after surging on a combination of factors.

1. Crypto hit by CFTC action against Binance

Cryptocurrencies had the wind taken out of their sails as the Commodity Futures Trading Commission accused Binance of illegally selling its derivatives trading services in the U.S., the latest in a series of regulatory measures that appear aimed at walling off crypto from the mainstream financial universe.

The CFTC’s charges revolve largely around how Binance facilitated market-making for large, professional high-frequency outfits based in Chicago and elsewhere, not least by instructing them to log on via Virtual Private Networks to disguise their physical location.

“Give them a heads up to ensure they don’t connect from a us Ip. Don’t leave anything in writing,” founder and CEO Changpeng Zhao wrote in an email cited by the CFTC.

Bitcoin, which has profited recently from a surge of negative news flow from the traditional financial sector, fell to its lowest in a week but bounced at the $27,000 level.

2. Fed blames SVB management for collapse; house price, consumer confidence data due

The Federal Reserve’s top banking supervisor blamed Silicon Valley Bank executives for the collapse of the bank, calling it a “textbook case of mismanagement” that left the bank prey to a sudden loss of confidence as interest rates rose.

In testimony to Congress, Michael Barr batted away suggestions that the bank’s supervisors had been asleep at the wheel. His comments came hours after the Federal Deposit Insurance Corp. said it faced losses of around $20 billion on its deposit insurance fund in resolving the SVB case. While First Citizens (NASDAQ:FCNCA) bank agreed to buy most of SVB’s loan book with the help of cheap financing from the FDIC on Monday, a large part of its loans will remain on the FDIC’s books.

Barr’s testimony continues in the House of Representatives later Tuesday.

The U.S. data calendar meanwhile includes updates on house prices and the Conference Board's consumer confidence survey.

3. Stocks drift ahead of open; Micron, Walgreens set to report

U.S. stock markets are set to edge lower at the opening, lacking conviction despite the apparent calming of tensions over the stability of second-tier banks, which were extending Monday’s gains in premarket trading.

By 06:25 ET, Dow Jones futures were up 39 points or 0.1%, but S&P 500 futures were down 0.1%, and Nasdaq 100 futures were down 0.2%.

Stocks likely to be in focus later include Lyft (NASDAQ:LYFT), up 5% in premarket after appointing a new CEO, and Meta (NASDAQ:META), after reports that the Facebook owner will cut bonuses for some executives. Salesforce (NYSE:CRM) is also in focus after Elliott Management said it no longer intends to nominate directors to the company’s board with the software giant performing better than expected in the last quarter.

Walgreens Boots Alliance (NASDAQ:WBA) reports earnings before the open, while chipmaker Micron (NASDAQ:MU) leads a long list of names reporting after the bell.

4. Israel simmers as Netanyahu pauses controversial judicial reform

Israel came off the boil after Prime Minister Benyamin Netanyahu delayed the passage of his controversial judicial reform bill until the next session of parliament in May. Netanyahu was responding to massive demonstrations that swept the country at the weekend.

The bill’s critics say it undermines democracy, by allowing the government too much power over the appointment of judges. It’s a particularly controversial point given Netanyahu’s own legal problems in recent years.

The shekel rose to its highest in six weeks in response.

5. Oil extends gains after China forecasts solid rise in 2023 imports

Crude oil prices extended Monday’s chunky gains, which came in response to news of Turkey suspending exports from Kurdistan through a pipeline to the Mediterranean.

Prices were also underpinned by research from China’s largest oil company suggesting that the country’s imports will rise by more than 6% this year to 540 million tons, reflecting the end of COVID-19-related restrictions on economic activity.

By 06:40 ET (10:40 GMT), U.S. crude futures were up 0.5% at $73.16 a barrel, while Brent was up 0.3% at $77.89 a barrel.

The American Petroleum Institute releases weekly data on U.S. stockpiles at 15:30 ET.

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