NOTABLE MOVES
As of Tue, Jan 15, 08:00 Singapore Time zone UTC+8
USDJPY, -0.20%, $108.24
EURUSD, +0.11%, $1.1473
GBPUSD, +0.21%, $1.2875
USDCAD, -0.04%, $1.3275
AUDUSD, -0.02%, $0.7200
NZDUSD, -0.10%, $0.6826
S&P500, -0.53%, 2,582.61.
Nasdaq, -0.94%, 6,905.92
Nikkei Futures, +0.20%, 20,187.0
CURRENCY MARKET WRAP
- U.S. Treasuries finished mixed with the 2-yr yield decreasing three basis points to 2.52% and the 10-yr yield adding one basis point to 2.71% in a curve-steepening trade. The U.S. Dollar Index lost -0.1% to 95.59. WTI crude lost -2.1% to $50.58/bbl.
- For the next 48 hours, there’s nothing more important than the Brexit vote. Members of Parliament will begin voting on PM May’s withdrawal agreement at 7pm London time on Tuesday. There is no specific time for the vote to end, but it should happen in the late North American or early Asian session. At this point, May is expected to lose by a margin big enough to force her to seek an Article 50 extension.
STOCK MARKET WRAP
- The broader market opened on a lower note, as disappointing trade data out of China stirred ongoing concerns over global economic growth. Specifically, China’s exports unexpectedly declined 4.4% year-over-year in December and its imports declined 7.6%. The S&P 500 lost -0.53% on Monday, pulling back from a three-week winning streak. The benchmark index never traded in positive territory but it did cut its intraday losses in half. The S&P 500 utilities (-2.3%), health care (-1.2%), and information technology (-0.9%) sectors weighed on the broader market. Conversely, the financials (+0.7%) sector helped offset losses and it was the only sector to finish in positive territory.
- In addition, the amount of attention surrounding the partial U.S. government shutdown, which is currently the longest in U.S. history with no clear end in sight, also weighed on investor sentiment. The S&P 500 managed to bounce off its early lows as Citigroup (C 58.93, +2.24, +4.0%) overcame early weakness that was initially attributed to some disappointment over a fourth quarter revenue shortfall that overshadowed better-than-expected earnings results driven in part by expense savings and a lower tax rate. Citigroup was down more than -1.0% in pre-market hours but quickly reversed course shortly after the start of the trading session. Its quick turnaround, which several pundits attributed to a discounted valuation, helped lift other bank stocks and the financial space.
BLOCKCHAIN & CRYPTOCURRENCY NEWS
Major Spanish Energy Company to Use Blockchain in Renewable Energy Tracking
Spain’s major energy company, Iberdrola, has started using blockchain to track renewable energy. The first trial was conducted in cooperation with Kutxabank, a local bank based in the Basque Autonomous Community that owns a substantial part of Iberdrola’s equity, and its subsidiary Cajasur. The company used Energy Web Foundation — an open source blockchain platform designed to fit the regulatory, operational and market needs of the energy sector— in their pilot. They found that blockchain enabled the company to establish a hierarchy of the producers and to automate the process of energy distribution. The test was a success, and Iberdrola believes that blockchain will contribute to the process of issuing guarantee of origin — a certificate that informs a customer about the source of the energy consumed. Moreover, decentralized solutions can help the industry to increase transparency and cut operational costs by eliminating middlemen.
Spain’s major energy company, Iberdrola, has started using blockchain to track renewable energy. The first trial was conducted in cooperation with Kutxabank, a local bank based in the Basque Autonomous Community that owns a substantial part of Iberdrola’s equity, and its subsidiary Cajasur. The company used Energy Web Foundation — an open source blockchain platform designed to fit the regulatory, operational and market needs of the energy sector— in their pilot. They found that blockchain enabled the company to establish a hierarchy of the producers and to automate the process of energy distribution. The test was a success, and Iberdrola believes that blockchain will contribute to the process of issuing guarantee of origin — a certificate that informs a customer about the source of the energy consumed. Moreover, decentralized solutions can help the industry to increase transparency and cut operational costs by eliminating middlemen.
Bulgarian Revenue Agency Announces Inspection of Cryptocurrency-Selling Companies
The Bulgarian National Revenue Agency (NRA) has announced the launch of inspections of cryptocurrency-selling companies. The Bulgarian RSA reportedly conducted a survey of the companies that own online platforms for the sale and purchase of cryptocurrencies like cryptocurrency exchanges and already assigned control actions (which presumably means checks) to nine companies. After the completion of the checks, the tax authority will reportedly use the information obtained from the platform to determine whether the users have declared their income from the use of cryptocurrency exchanges. In Bulgaria, the income from the sale of virtual currencies is declared in annual tax returns, treated as profit from the sale of a financial asset, and taxed at 10 percent. Companies profiting from the sale of crypto-assets are subject to taxation under the Corporate Income Tax Act.
The Bulgarian National Revenue Agency (NRA) has announced the launch of inspections of cryptocurrency-selling companies. The Bulgarian RSA reportedly conducted a survey of the companies that own online platforms for the sale and purchase of cryptocurrencies like cryptocurrency exchanges and already assigned control actions (which presumably means checks) to nine companies. After the completion of the checks, the tax authority will reportedly use the information obtained from the platform to determine whether the users have declared their income from the use of cryptocurrency exchanges. In Bulgaria, the income from the sale of virtual currencies is declared in annual tax returns, treated as profit from the sale of a financial asset, and taxed at 10 percent. Companies profiting from the sale of crypto-assets are subject to taxation under the Corporate Income Tax Act.
Malaysian Cryptocurrency Regulation to Classify Digital Assets, Tokens as Securities
The Malaysian finance minister, Lim Guan Eng, reportedly said today that the Capital Markets and Services Order 2019 would become effective on Jan. 15. The new regulation classifies digital currencies, tokens and crypto-assets as securities, placing them under the Securities Commission’s authority. Starting from Tuesday, any person operating unauthorized initial coin offerings (ICOs) or digital asset exchanges in Malaysia will be reportedly facing a 10-year jail sentence and a 10 million ($2.4 million) ringgit fine. Eng noted that the ministry believes digital assets offer both an alternative fundraising method and a new asset class for investors. The Malaysian government was still undecided whether to legalize cryptocurrencies just two days ago. Still, it has reportedly been clear since November of last year that Malaysia will enact regulations for cryptocurrency and ICOs in Q1 2019.
The Malaysian finance minister, Lim Guan Eng, reportedly said today that the Capital Markets and Services Order 2019 would become effective on Jan. 15. The new regulation classifies digital currencies, tokens and crypto-assets as securities, placing them under the Securities Commission’s authority. Starting from Tuesday, any person operating unauthorized initial coin offerings (ICOs) or digital asset exchanges in Malaysia will be reportedly facing a 10-year jail sentence and a 10 million ($2.4 million) ringgit fine. Eng noted that the ministry believes digital assets offer both an alternative fundraising method and a new asset class for investors. The Malaysian government was still undecided whether to legalize cryptocurrencies just two days ago. Still, it has reportedly been clear since November of last year that Malaysia will enact regulations for cryptocurrency and ICOs in Q1 2019.