The cryptocurrency market traded in the green over the past few sessions amid the recovering global economy.

As digital assets stole the show with significant surges over the past week, Arbitrum (ARB) was among the top performers, outshining Bitcoin’s 6.35% weekly gain with a 20% increase on its seven-day chart. 

While the altcoin market cooled after significant gains, Arbitrum developers announced the successful completion of the ArbOS 32 upgrade on Arbitrum One, Nova, and Sepolia.

These developments added to ARB’s ongoing recovery, extending the altcoin’s upside journey.

Arbitrum finalizes ArbOS 32 upgrade

The Ethereum L2 scaling network completed the ArbOS 32 update today and urges node operators on Arbitrum 1, Nova, and Sepolia platforms (who are yet to perform the upgrade) to mode the nodes to Nitro version 3.2.0. Contrarily, validator nodes should upgrade to v3.2.1 to ensure compatibility.

Notably, Arbitrum’s latest release seeks to fix security vulnerabilities. Further, the Arb Security Council plans to implement the ArbOS 32 soon. Thus, the version update was crucial to ensure ample time for this implementation.

Meanwhile, the Security Council authorized the emergency to address mispricing concerns in the Arbitrum Stylus. This issue could lead to a DoS (denial-of-service) attack, allowing a vindictive contract to overprice Stylus contracts in SLOAD operations and send network nodes offline.

Arbitrum launches Nitro v3.2.0

Arbitrum is an Ethereum Layer2 scaling network designed to improve ETH’s efficiency and scalability through rollup technology. The strategy heightens the Ethereum blockchain’s security, transaction throughput, and reduced costs.

The network launched the Arbitrum Nitro version 3.2.0 upgrade early this week, introducing adjustments such as stability enhancements. Unlike the previous version 3.1.2 update, the latest release doesn’t include configuration modifications.

Notably, the Arbitrum network comprises several L2 scaling solutions, including Arbitrum Nova and Arbitrum One blockchains.

Current ARB price action

The altcoin saw a notable upswing from the 24-hour low of $0.5876 to $0.6324. ARB trades at $0.6133 during this publication, with its value up 2.65% in the past day. It gained 20% on its weekly chart as bulls ruled the crypto market following the recent Federal decision on interest rates.

Meanwhile, the ArbOS 32 upgrade likely added to ARB’s recovery as its seven-day gains surpassed the leading Bitcoin and Ethereum, which soared 6.5% and 13% last week.

Arbitrum’s daily trading volume has jumped by over 50%, confirming improved investor enthusiasm and possibilities of continued ARB upswings. Also, it trades well above the 200 Exponential Moving Average, reflecting a bullish ride.

Maintaining the current stance could see ARB closing September with gains and exploding during the much-awaited “Uptober.” An analyst expects an upsurge to $1.27, which would translate to an over 100% increase from the current price.

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The global financial landscape is undergoing a seismic shift, with traditional powerhouses such as London, New York, and Hong Kong facing mounting challenges.

A recent report by the Global Financial Centres Index (GFCI), established by Long Finance, reveals that these long-standing financial hubs are seeing their influence wane, while emerging cities—particularly from Asia—are quickly gaining ground.

The changing dynamics raise critical questions about the future of these iconic centers, and whether they can maintain their dominance in the face of rising competition.

Source: Statista

Brexit’s impact on London’s financial standing

London, once the world’s undisputed financial leader, has been significantly impacted by Brexit.

The UK’s withdrawal from the European Union has created uncertainty and disrupted the city’s financial markets, which had flourished under its EU membership.

While London still offers a broad spectrum of financial services, including banking and asset management, its competitive edge has diminished, resulting in a steady decline in GFCI rankings.

Several companies, responding to regulatory changes and a shifting business climate, have explored relocating to other financial centers.

This has sparked concerns about London’s long-term ability to retain its status as a top global financial hub.

The challenges posed by Brexit make it clear that London must adapt to safeguard its future standing.

New York and Hong Kong: facing crossroads

New York, often seen as the financial heart of the United States, has also experienced a dip in the GFCI rankings.

Intense competition from both domestic and global firms, coupled with rising operational costs, has weighed on the city’s standing.

While still a key player, New York faces growing pressure to innovate and reduce costs to maintain its leadership position.

Meanwhile, Hong Kong, historically a crucial gateway to China, is grappling with its own set of challenges. Political instability, combined with the lingering effects of the COVID-19 pandemic, has weakened its previously stable financial framework.

These disruptions have raised concerns about Hong Kong’s ability to continue serving as a vital financial link between China and the rest of the world.

China’s financial hubs surge ahead

In contrast to the struggles of traditional centers, Chinese cities like Shanghai and Shenzhen have risen rapidly, emerging as key global financial hubs.

China’s economic expansion, combined with targeted government investments in financial services, has fueled this growth.

Both Shanghai and Shenzhen now rank among the top 10 global financial centers, a significant leap from their positions in 2007.

Furthermore, cities like Qingdao are quickly making their mark on the global stage.

Qingdao’s GFCI score surged from 594 points in 2016 to 708 points in 2024, showcasing China’s ambition to expand its financial influence.

This rapid ascent highlights the country’s growing financial prowess and its ability to reshape the global financial order.

Rising contenders in Asia

As traditional financial hubs grapple with challenges, new contenders in Asia are emerging as serious competitors.

Seoul, the capital of South Korea, is one such city making significant strides.

Over the past five years, Seoul has invested over $200 million to strengthen its financial sector, with an ambitious goal of attracting more than 250 foreign financial firms and $30 billion in foreign direct investment by 2030.

If successful, Seoul could position itself among the world’s leading financial centers.

Other cities across Asia are also taking note, investing in infrastructure, improving business environments, and enhancing their financial capabilities.

The Long Finance rankings consider factors such as business climate, human capital, and reputation—metrics that are becoming increasingly important as cities vie for a spot in the upper echelons of global finance.

Competitive future for financial hubs

The competition among the world’s financial centers is intensifying, creating both opportunities and challenges.

While London, New York, and Hong Kong continue to hold significant influence, the rapid rise of cities like Shanghai, Shenzhen, and Seoul is reshaping the financial landscape.

In this ever-evolving environment, adaptability, investment in innovation, and proactive policymaking will be crucial for cities aiming to maintain or elevate their status.

As the global economy continues to transform, the coming years are likely to witness dramatic shifts in the financial order.

The key question remains: will the traditional powerhouses recapture their former dominance, or will emerging cities take their place at the top of the global financial hierarchy?

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The Organisation for Economic Co-operation and Development (OECD) marginally increased its global growth outlook for 2024 in light of expected improvement in real incomes due to falling inflation and a more accommodative monetary policy in many economies.

The grouping, in its increased ‘Interim Economic Outlook’ released on Tuesday increased its global GDP growth forecast for 2024 to 3.2% from 3.1% previously, while leaving its forecast for 2025 unchanged at 3.2%.

OECD Secretary-General Mathias Cormann said,

“The global economy is starting to turn the corner, with declining inflation and robust trade growth. At 3.2%, we expect global growth to remain resilient both in 2024 and 2025.”

Inflation is also moderating, OECD said, with headline inflation in G20 economies projected to ease to 5.4% in 2024 and further to 3.3% by 2025.

Core inflation in G20 advanced economies is forecast to drop to 2.7% in 2024 and 2.1% in 2025.

As the lagged impact of central bank tightening evaporates, interest rate cuts would boost spending going forward while consumer spending benefitted from lower inflation, the OECD said.

If a recent decline in oil prices persists, global headline inflation could be 0.5 percentage points lower than expected over the coming year, the Paris-based OECD said.

Growth in US expected to slow, Euro area expected to recover

Growth prospects vary across major economies. In the United States, GDP growth is expected to slow to 2.6% in 2024, down from its recent rapid pace, before easing further to 1.6% in 2025.

The slowdown will likely be cushioned by monetary policy easing.

In the euro area, growth is projected to recover to 1.3% in 2025, from a low of 0.7% in 2024, driven by improvements in credit availability and rising real incomes.

China, however, faces a moderated growth outlook, with GDP expansion expected to ease to 4.9% in 2024 and 4.5% in 2025.

The country’s ongoing real estate sector correction and subdued consumer demand are seen as limiting factors, despite policy stimulus efforts.

Inflation expected to return to target levels

A key factor in the positive outlook is the projected decline in inflation.

Headline inflation in G20 economies is expected to ease significantly from 6.1% in 2023 to 5.4% in 2024 and further to 3.3% in 2025, aligning with central bank targets in most economies.

Source: OECD

However, inflationary risks persist. While food and energy prices are declining in many OECD countries, services inflation remains sticky.

“Monetary policy should remain prudent until inflation has returned to central bank targets,” Cormann cautioned, noting that rate cuts should be carefully timed based on data.

OECD warns of several downside risks

Despite the positive outlook, the OECD warns of several downside risks.

Tight monetary policies could impact demand more than anticipated, and any deviation from the expected disinflation path may trigger financial market disruptions.

Geopolitical tensions, such as the ongoing war in Ukraine and conflicts in the Middle East, also pose a risk to global stability, with the potential to reignite inflationary pressures.

On the upside, real wage growth could enhance consumer confidence and spending, while further reductions in global oil prices could accelerate disinflation.

However, these factors depend on a stable geopolitical environment.

Need for fiscal and structural reforms

In addition to managing inflation, the OECD emphasizes the importance of fiscal and structural reforms to sustain long-term growth.

Elevated public debt ratios across many economies highlight the need to rebuild fiscal space to respond to future shocks. Cormann said,

“Decisive policy action is needed to improve spending efficiency, reallocate resources to support opportunities and growth, and optimise tax revenues.”

The OECD also called for renewed structural reforms to boost medium-term growth prospects.

“The pace of regulatory reforms in recent years has been stalling,” noted Álvaro Santos Pereira, OECD chief economist.

“Amid sluggish productivity growth and tight fiscal space, product market reforms that promote open markets with healthy competitive dynamics remain a key lever to reinvigorate growth.”

With global growth projected to stay resilient, the OECD underscores the importance of prudent monetary policy and fiscal responsibility to navigate ongoing risks while capitalizing on opportunities for sustained economic recovery.

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Brazil has reported a significant current account deficit (CAD) of BRL 6.6 billion for August 2024, a sharp increase from the BRL 1 billion deficit recorded in the same month last year.

The latest figure has exceeded market expectations, which had forecast a deficit of BRL 5.1 billion.

This marks the highest current account deficit since December 2023, highlighting growing economic challenges for the nation as imports surge and exports decline.

Data from the Banco Central do Brasil revealed that the country’s trade balance posted a BRL 4.0 billion deficit in August, a marked deterioration compared to a BRL 4.8 billion surplus in the previous year.

The primary driver of this shift is a significant 6.5% drop in exports coupled with a 12% spike in imports.

The figures raise concerns about Brazil’s competitiveness in the international market and signal an increasing reliance on foreign goods, which could further strain the country’s economic health.

Largest CAD in 7 months

Brazil’s current account deficit has been steadily widening. In July 2024, the deficit stood at $5.2 billion, up from $3.6 billion in the same month in 2023 and higher than the $4 billion shortfall economists had expected.

This marked the largest current account deficit in seven months, reflecting mounting pressure on the country’s economy.

The services sector played a key role in the ballooning deficit. The services deficit increased by $1.6 billion to reach $4.75 billion, driven largely by a 70% jump in net transportation service expenses, which accounted for $1.6 billion of the deficit.

Analysts warn that this upward trend in service-related costs could further exacerbate Brazil’s current account woes and complicate efforts to stabilize the economy.

The tourism industry also remains a weak point in Brazil’s economic recovery.

Still struggling to rebound fully from the impact of the COVID-19 pandemic, the sector has contributed to the rising services deficit, as more Brazilians continue to spend on foreign services.

Experts argue that bolstering domestic tourism and service industries will be key to addressing this imbalance.

Improvement in primary income deficit

Despite the growing current account deficit, there was a glimmer of positive news in the form of a reduction in Brazil’s primary income deficit.

The deficit decreased to BRL 6.2 billion in August, a reduction of BRL 851 million from the previous year.

This improvement can be attributed to an 18.7% decrease in net expenses for profits and dividends from direct and portfolio investments, a promising sign for Brazil’s investment climate.

Brazil’s secondary income surplus remained stable at BRL 259 million, supported by steady inflows from remittances and foreign aid.

While the surplus provides some financial cushion, experts caution that the modest size of the surplus indicates a need for greater foreign capital inflows to support Brazil’s broader economic recovery.

Alarming year-to-date deficit

For the first eight months of 2024, Brazil’s cumulative current account deficit has soared to BRL 30.4 billion, more than double the BRL 13.5 billion deficit recorded during the same period in 2023.

This sharp rise raises serious concerns about the long-term implications for Brazil’s economic stability and creditworthiness.

The expanding deficit puts increasing pressure on the Brazilian government to enact swift economic reforms.

Analysts argue that addressing trade imbalances and boosting domestic manufacturing are crucial steps toward stabilizing Brazil’s economy and improving its competitiveness in the global market.

In the face of rising deficits and economic challenges, Brazil’s ability to implement effective reforms will be critical to its future financial stability.

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In a decisive move to stimulate the economy, the Swiss National Bank (SNB) has announced a reduction of its key interest rate by 25 basis points, bringing it down to 1.0%.

This marks the third cut in 2024 and aligns with broader trends observed in major Western economies, as central banks respond to softening inflation rates and economic conditions.

The SNB’s decision was anticipated by 30 of 32 analysts in a Reuters poll, reinforcing expectations of a more accommodating monetary policy.

Since it was the first major Western central bank to initiate rate cuts back in March, the SNB has continued its trend of easing, reflecting a shift in monetary strategy to support economic growth.

In conjunction with the SNB’s announcement, both the European Central Bank (ECB) and the US Federal Reserve recently indicated similar intentions.

Just last week, the Fed implemented a significant 50-basis-point cut, further highlighting a coordinated effort among central banks to navigate economic challenges.

Swiss inflation remains remarkably low, with the latest figures revealing a mere 1.1% annual increase for August.

The SNB has pointed out that the appreciation of the Swiss franc has played a critical role in reducing inflationary pressures, prompting this latest interest rate adjustment.

As a direct consequence of the SNB’s rate cut, the Swiss franc strengthened against major currencies.

Both the US dollar and the euro experienced declines, falling by approximately 0.14% and 0.16% against the Swiss currency, respectively.

In a statement, the SNB acknowledged the decrease in inflationary pressure compared to the previous quarter, attributing part of this decline to the currency’s recent rally.

The central bank noted,

The SNB’s easing of monetary policy today takes the reduction in inflationary pressure into account. Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.

As the global economic landscape evolves, market participants will closely monitor the SNB’s future actions and any additional rate cuts that may be on the horizon, as the bank aims to maintain stability in the Swiss economy.

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