Converge

Global macro finds itself at a crossroads. The last job report left investors scratching their heads due to the mixed picture it painted but yesterday’s higher than expected inflation print likely confirmed that the Fed will cut interest rates by 25 basis points next week. It will be all about how the Fed wants to be perceived by markets.

What is important for investors is that the global easing cycle is well underway. The Fed has basically given other central banks the green light to cut as well. And its definitely needed given the industrial recession in Germany, China and to a lesser degree Japan.

The macro uncertainty therefore isn’t tied to just one country. Its structural and global in nature, despite being driven by idiosyncratic factors.  

This week, we sit down with Venture Capitalist and Fintech consultant Kimberly Ofori to discuss the concept of Camels (slow and sustainable companies) versus Unicorns (fast and disruptive companies) in the fintech landscape, and why camels are gaining more attention in 2024.

Additionally, we touch on the regulatory challenges that both Camels and Zebras face in the EU, and how they can leverage these as opportunities rather than barriers to be over-prepared and scale internationally with success. Don't miss our enlivening chat with one of fintech's sharpest minds.

The expectation of easier monetary policy in the United States has led investors away from the Greenback and has pushed the euro, pound, and yen to yearly highs. Speculators are now simultaneously bullish on all three currencies for the first time since early 2021.

Meanwhile, investors seem to have all but forgotten the volatility shock from three weeks ago. Global equity benchmarks are approaching their previous highs. Volatility indicators have almost completely retraced back to their level before August 5th and bond yields are trading higher than they were before the weak job report.

Cross-assets price in a low recession and high policy easing probability over the next six months. This goldilocks assumption of a soft landing accompanied by policy easing only seen during recessions is the largest risk to the consensus of rising equity markets and a lower US dollar for the second half of 2024.  

This week we're joined by Thomas Mueller and Fatemeh Nikayin, co-founders of Rivero, a SaaS platform focusing on modernizing the most challenging aspects of payment operations (PayOps), including fraud recovery, scheme compliance, and dispute management.

We discuss the significant growth that Rivero has experienced in the past year, their focus on providing solutions for card payment operations for issuing banks, the shift towards scam-type fraud and the notable increases in fraud in the non-card payment arena.

We also touch on the importance of consumer protection in new instant payment schemes like the European Payments Initiative (EPI).

Lastly, we push back on the notion of the AI "cure all" in financial services, emphasizing the importance of humans + machines in finance, and the need to leverage human intelligence for customer service, traceability and predictability.

Global markets have worked through their largest volatility shock so far this year with bravura as the dollar, equities and bond yields are trading like last Monday's historic sell-off never happened.

However, some things are unlikely to fully revert back as sentiment seems to have changed materially. Investors will remember the massive unwind of trades that had been popular all throughout 2024 for some time.

We see the legacy of the Monday shock from three different perspectives. (1) The Japanese yen has left the downside one way street, that saw USD/JPY appreciate by 23% since 2023. (2) The volatility scare has made investors more comfortable pricing in aggressive rate cuts from the Federal Reserve. (3) Equities will have a more difficult time finding all-time highs over the next few months as the path to a soft landing remains narrow and filled with uncertainty.

The second half of the year is likely to display less clear and straight forward trends than the first one. 

Paymentology CEO Jeff Parker discusses the transformative role of embedded finance in the payment card industry. Discover how customers' engagement with brands is shifting their focus away from traditional finance service providers.

Parker explores key innovations like digitalization, mobile wallets, and contactless payments, and explains how payment cards are central to enhancing customer experiences, loyalty, and engagement. He also addresses recent changes in fintech valuations and Paymentology's commitment to expanding financial access and community support.

Central banks are at a crucial turning point going from a global tightening to a easing cycle while trying to engineer a soft landing. Policy makers continue to be unusually data dependent and there is a significant uncertainty band around our inflation and labor market forecast. So the incoming data matters, even in summer.

And if you then add the US election on top of that, you get volatility. August will likely be as volatile as July. While we only have two major central bank decisions coming up, the macro data will be important to gauge what central banks will do in September.

August's markets will probably be decided in just eight trading days between the 13th and 22nd, when all the data for the United Kingdom will come out, plus the big macro patch from China, European PMIs and wage data plus inflation in the US.

On the political front, the democratic convention that will most likely make Kamala Harris the official candidate and the Jackson Hole Symposium organized by the Fed are taking place in this period as well. All of these events promise to keep investors on their toes.  

In this week's episode, Nicole Casperson, founder of Fintech is Femme, and Julie Armstrong, V.P. and Global Head of Verticalized Industry & Partnerships at Convera, share their journeys as women shaping the fintech landscape from the perspectives of Gen Z and Gen X, respectively. Both discuss the incredible resilience and audacity required to navigate and transform an industry that often underestimates women.

We discuss Nicole's transition from journalism to championing women in fintech through her platform, driven by a desire to amplify underrepresented voices and foster a community where women can thrive despite systemic challenges.

Julie shares her personal evolution from a single-parent household to a leading voice in international finance, emphasizing the importance of mentorship and community.

Their stories highlight not only the barriers they've overcome but also the profound impact of community and connectivity in fostering innovation and driving change within fintech.

Their conversation is a testament to the power of lifting each other up and rewriting the narrative around women's roles in technology and finance. Don't miss it!

The US dollar is coming off its worst two-week streak this year as slower US growth and inflation lead investors to bet on more aggressive policy easing from the Federal Reserve. However, the losses have been somewhat limited this week as politics remains front and center in the US and China.

FX markets have been caught in this tug of war between macro and politics and between the Fed and Trump. Investors are digesting the implications of a potential Trump 2.0 presidency and trade escalations between China and the West.

The Fed, ECB and BoE are expected to ease monetary policy over the coming quarters despite some reflationary tendencies boiling in global supply chains. All of this complicates the outlook for the second half of the year. 

This week, we discuss the challenges of growing a fintech company internationally with Hong Fang, President of OKX crypto exchange, and Nicola Ebmeyer, Co-founder and CEO of Gain.Pro.

We cover the recent developments and challenges in the crypto industry, the state of the private markets, language and cultural considerations in international expansion, regulatory requirements, how to sustain a growth and innovation mindset during market downturns, and the future trends in global fintech.