Evengrande temporarily relieves stress

Evengrande Company agreed on Wednesday to make interest payments on a domestic bond. The announcement also temporarily dispelled fears of an impending contagion from highly indebted property developers.

Evengrande has more than one debt to pay this September, however. The company also didn’t mention any other urgent debt, so it’s unclear what that means for a $ 83.5 million bond interest payment due Thursday.

Additionally, on September 29, Evergrande was due to pay $ 47.5 million in bond interest payments.

During that time, China’s central bank injected 120 billion yuan ($ 18.6 billion) in cash into the banking system to aid Evergrande. Evergrande’s announcement that he would be able to pay the interest on a debt also temporarily calmed the market. The Hang Seng Index gained almost 2% in the last session.

Fed statement after the annual meeting

After the September meeting, the Fed announced it would keep its policy rate near zero, but hinted that rate hikes could come earlier than expected and significantly lowered the economic outlook for the year.

At the same time, depending on the situation, the Fed expects a reduction in monthly bond purchases earlier, but has not yet had a specific date. This information was also predicted earlier. But it also gives investors more security.

The economy shows that the FED is also forecasting the year with slower growth but higher inflation. The Fed expects GDP growth of just 5.9% this year, compared to a forecast of 7% in June. However, growth in 2022 is now set at 3.8%, compared to 3.3% and 2.5% in 2023, which corresponds to an increase of 1/10 percentage point.

Core inflation is forecast to rise 3.7% this year, compared to 3% forecast the last time members set their expectations. For industries like food and energy, officials say inflation will stay at 4.2 percent this year, up from 3.4 percent in June.

In a further step, the Fed announced that it would double its daily buybacks in the market business from 80 billion US dollars to 160 billion US dollars. This shows that banks are in high demand for cash and need support from the Fed.

Market situation (Evengrande )

BTC’s on-chain situation over the past few days shows that the BTC amount deposited on the exchange is higher than the amount withdrawn from the exchange. However, the difference is not great. BTC price also had time to rebound to $ 44,000. On the other hand, Ethereum is the opposite. Ethereum is still trending to withdraw more from the exchange than to deposit it.

Circle Company just released the latest audit report on USDC which shows that this is a very secure stable coin compared to other stable coins today. Up to 92% of USDCs are covered by cash or cash equivalents. The remaining 1% is invested in corporate bonds, 5% in short-term international bank debt and 2% in short-term bonds.

USDT is now the largest stablecoin, only 75.85% covered by cash or cash equivalents. The rest is invested in riskier asset classes. If this is the case, there is also a higher risk for the holder.

USDT and USDC are the two largest stablecoins in the market with a total capitalization of more than $ 100 billion. However, a very small percentage of the guaranteed amount for these stablecoins is invested in US Treasuries. Therefore, according to Thuan, the government also wants to manage stablecoins by regulating the minimum investment rate for stablecoin issuers in government bonds. If this direction takes hold, it will be better for investor confidence in the safety of stablecoins.