2 Min Market Summary: 19 Feb 2019

• U.S. Banks were closed in celebration of Washington’s birthday. There were no notable prints out of the E.U. and U.K. as well.
• Trade talks between the US and China continue this week. Though signals continue to be positive, the parties are still far apart on key questions.
• In RBA minutes this morning, the bank cited that the “outlook for consumption continued to be one of the key uncertainties for the forecasts for the domestic economy”. The RBA joined other major central banks such as the Fed and the ECB in recently signalling growing caution around the world growth outlook.
• Still, the RBA is not rushing toward cutting interest rates, saying unemployment remains on a downward trajectory, while there are some signs of heat in the wages. Unemployment currently sits at its lowest levels in seven years. “Given that further progress in reducing unemployment and lifting inflation was a reasonable expectation, members agreed that there was not a strong case for a near-term adjustment in monetary policy,” the minutes said.
• Financial markets have priced in a strong probability that interest rates will be cut before the end of the year as the RBA eventually reacts to slowing GDP growth, subdued inflation and rising unemployment.
• The job market will be a major determinant of the RBA’s actions, with any hint of rising unemployment likely to fan talk of imminent interest rate cuts.

• U.S. Markets were closed.

BLOCKCHAIN & CRYPTOCURRENCY UPDATES 

Argo Blockchain Plans to Terminate Mining Contracts, Cut Costs by 35 Percent

United Kingdom-based cryptocurrency mining provider Argo Blockchain announced it was refocusing its business as part of a major cost-cutting exercise. Argo, which is headquartered in London with facilities in Quebec, said it would terminate its Mining-as-a-Service (MaaS) operations by April, focusing solely on direct mining. MaaS operators facilitate cryptocurrency mining on borrowed hardware remotely. Explaining its decision, Argo said the ongoing suppression of Bitcoin (BTC) prices and associated reduced profitability of mining had caused it to slim down its expenses sheet. Along with abandoning MaaS, Argo plans to reduce costs by over a third in order to meet its profitability target. CEO and co-founder Mike Edwards summarized: “While it is disappointing to make this shift after delivering better-than-expected growth during our first six months as a consumer business, we need to be prudent and act decisively in order to ride out the downturn and be in a strong position when industry fundamentals improve.”

Major Canadian Exchange Coinsquare Acquires Zero-Fee Payment Network StellarX

Major Canadian crypto exchange Coinsquare has acquired StellarX, a Stellar (XLM)-based zero-fee decentralized payment network. According to the announcement, Bermuda-based StellarX will be a fully owned subsidiary of Coinsquare and will seek regulatory approval to operate and expand its service under Coinsquare’s compliance. The new acquisition has followed Coinsquare’s recent purchase of private Stellar wallet BlockEQ in December 2018. The firm is reportedly set to be rebranded to become the anchor wallet for the StellarX platform. Originally announced in July 2018, StellarX rolled out its full operation on Sept. 28, 2018. The company positions itself as fiat onramp, as it allows users to deposit fiat money directly from their bank accounts, as well as lists digital tokens for a number of fiat currencies including the euro, Chinese yuan, Hong Kong dollar, the British pound and others.

Liechtenstein’s Postal Service to Offer Crypto Exchange Services at Physical Locations

Liechtensteinische Post AG, the country’s official postal service, plans to offer cryptocurrency exchange services at their physical locations. The postal service will allow customers to exchange their fiat to Bitcoin (BTC) in one of its offices in Vaduz, the country’s capital, starting on Feb. 15. After purchasing BTC, the customers will get a physical wallet generating public and private keys. Later, the service will likely be extended to other post offices all over the country, the announcement notes. Moreover, the postal service wants to add support for other coins, including Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH) and Ripple (XRP). To introduce the service, Liechtenstein’s post has partnered with Värdex Suisse AG — a Swiss-based financially regulated blockchain and payment service provider. Switzerland and Liechtenstein are among the countries with the highest level of crypto adoption in the world. Liechtenstein introduced its crypto legislation in early 2018 when prime minister Adrian Hasler announced that the country will regulate blockchain business models and underlying blockchain systems.