NOTABLE MOVES
As of Fri, Dec 21, 08:00 GMT (UTC +08:00)
USDJPY, -0.02%, $111.26
EURUSD, -0.66%, $1.1370
GBPUSD, -0.09%, $1.2645
USDCAD, +0.70%, $1.3603
AUDUSD, -0.91%, $0.7042
NZDUSD, -0.80%, $0.6721
S&P 500, -2.06%, 2,416.62
Nasdaq, -2.99%, 6,332.99
Nikkei Futures, -0.79%, 20,050.0
CURRENCY MARKET WRAP
U.S.
- Personal Spending m/m at 0.4% vs expected 0.3%.
- The key takeaway from the report is that it showed PCE inflation continues to run below the Federal Reserve’s longer-run target of 2.0%, which could raise the market’s angst level about the Fed being on course to make a policy mistake with further tightening action. The 2-yr yield dropped four basis points to 2.63%, and the 10-yr yield was unchanged at 2.79%.Core Durable Goods Orders m/m -0.3% vs expected 0.3%. Final GDP q/q 3.4% vs expected 3.5%. Core PCE Price Index m/m at 0.1% vs expected 0.2%.
U.K.
- Current Account -26.5B vs expected -21.7B. Final GDP q/q 0.6% vs expected 0.6%. Public Sector Net Borrowing 6.3B vs expected 7.0B. It was a hectic week in Brexit land.
- In a statement last week, PM Theresa May said the vote on her Brexit deal will take place in the week beginning 14 January (debate in the House of Commons will begin the week before that). May also said that negotiations with the EU continue despite the EU having said that no further negotiations are planned and that the EU27 will not reopen the Withdrawal Agreement. It seems like the EU leaders will not change position at least until the UK politicians find out what they want.
Canada
- Core Retail Sales m/m 0.0% vs expected 0.2%. GDP m/m 0.3% vs expected 0.2%. Retail Sales m/m 0.3% vs expected 0.4%
STOCK MARKET WRAP
- The S&P 500 fell -2.06% on Friday, as uncertainty surrounding a host of issues – including politics and trade, continued to provide a justification to reduce risk. The S&P 500 had climbed to session highs in morning action (+1.5%) amid some market-soothing commentary from New York Fed President John Williams. Specifically, Williams indicated that the Fed is listening to the market and that the path of balance sheet runoff in 2019 is not “inflexible.” Some discouraging headlines that compounded risk-reduction efforts included (1) the threat of a partial government shutdown due to disagreement over funding for a border wall, and (2) a late-day report that Director of the White House National Trade Council Peter Navarro told Nikkei that an agreement with China in 90 days will be difficult to attain.
- Dow component Nike (NKE 72.37, +4.84, +7.2%), for its part, was the best-performing stock in the S&P 500 after it released a strong earnings report and issued an encouraging FY19 currency neutral revenue growth outlook.
Israel’s Central Bank Issues Request for Information on DLT
The Bank of Israel has issued a formal request for information about Distributed Ledger Technology (DLT). Besides the country’s central bank, the team reportedly includes representatives from the country’s Securities Authority, the Ministries of Finance and Justice, the Tax Authority, the Israel Money Laundering and Terror Financing Prohibition Authority and various other local regulatory bodies. The document asks for information pertaining to barriers to the development of the local DLT industry. The text inquires explicitly about problems encountered by local DLT companies, fundraisers, investors and consumers dealing with virtual assets as examples and the request inquires about the risks inherent in the use of virtual assets and the opportunities of DLT in the finance industry. The request ask as well asks how DLT can help address issues regarding Anti-Money Laundering (AML) and terrorism financing. Interested parties are invited to submit relevant information until Dec. 31, 2018.
Launch of Bakkt Bitcoin Futures Market May Get Postponed Again
Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, is likely to delay the launch of Bakkt, its bitcoin futures trading and custody platform, a second time. Specifically, the CFTC must grant an exemption for Bakkt’s plan to custody bitcoin on behalf of its clients in its own “warehouse,” according to sources familiar with regulatory discussions of the plan. CFTC regulations normally require that customer funds be held by a bank, trust company or futures commission merchant (FCM). At this moment, the commissioners have to vote on whether to put out the proposal for public comment. After the 30-day comment period, the commissioners would likely take at least a couple days to read the comments, and then vote on the proposal itself. The earliest the commissioners are likely to vote on a public comment period and thereby start the 30-day clock is Wednesday, Dec. 26, the day after Christmas. This would be the second postponement. ICE had originally aimed to launch Bakkt in December, but last month it said that the “volume of interest” in the company and the “work required to get all the pieces in place” necessitated a delay.
Bitcoin Above $4,000 Again as Top Cryptocurrencies See Gains Across the Board
On Sunday, Dec. 23, all of the top 20 cryptocurrencies have seen moderate gains, with Bitcoin’s (BTC) price going above $4,000 again, according to CoinMarketCap data. At press time, Bitcoin is up nearly four percent on the day, trading at $4,050. And on the weekly chart, the current price is lower than the Friday’s high of almost $4,200; but the cryptocurrency is still trading significantly up from $3,294 the point at which it started this week. Ripple (XRP) has gained over five percent on the day, trading at $0.374 as of press time. On the weekly chart, the current price is significantly higher than $0.292, the price at which XRP started the week. However, the current price is slightly lower than the high of $0.389 reached on Wednesday. Ethereum (ETH) is trading at $128, having started the day at $111 and hitting an intra-day high of $133. On the weekly chart, the current price is notably higher than $87, which was the value of ETH on Monday. The total market capitalization of all cryptocurrencies has surged to over $135 billion at press time.