NOTABLE MOVES 

As of Fri, Feb 15, Singapore Time zone UTC+8

USDJPY, -0.41%, $110.54
EURUSD, +0.25%, $1.1295
GBPUSD, -0.37%, $1.2799
USDCAD, +0.30%, $1.3295
AUDUSD, +0.21%, $0.7104
NZDUSD, +0.51%, $0.6832

S&P500, -0.27%, 2,745.73
Nasdaq, +0.09%, 7,426.96
Nikkei Futures, -0.86%, 20,977.5

CURRENCY MARKET WRAP 

• U.S. Retail sales declined 1.2% (consensus +0.1%). That is the largest monthly decline since September 2009. The key takeaway from this disappointing report is that the weakness wasn’t isolated to gasoline station sales (-5.1%). It was pretty broad-based across discretionary spending categories like furniture and home furnishings (-1.3%), electronics and appliance stores (-0.1%), clothing and accessories (-0.7%), miscellaneous store retailers (-4.1%), nonstore retailers (-3.9%), and restaurants (-0.7%).
• U.S. Producer Price Index for final demand declined 0.1% in January (consensus +0.1%), pulled down by a 0.8% decline in the index for final demand goods. Excluding food and energy, the index for final demand increased 0.3% (consensus +0.2%). The key takeaway from the report is that it could portend margin pressures for producers if they don’t choose to pass along the higher costs to their customers.
• U.S. Treasuries saw increased buying interest following the release of the retail sales data, which drove yields lower across the curve. The 2-yr yield declined three basis points to 2.50%, and the 10-yr yield declined five basis points to 2.66%. The U.S. Dollar Index decreased -0.1% to 97.05. WTI crude increased 1.2% to $54.47/bb
• Chinese trade data showed a surplus of $39B vs. 33B eyed with exports dropping -2.4% while imports plunged -41.2% but analysts cautioned that trade flows could be distorted by the Lunar New Year. 

STOCK MARKET WRAP 

• S&P 500 declined as much as -0.8% on Thursday, as disappointing retail sales data for December played into the market’s concerns about a U.S. economic slowdown. The benchmark index, however, staged a late morning rebound back to its flat line, where it wavered for most of the afternoon. It almost finished flat, but a wave of selling activity in the final 20 minutes of trading left the S&P 500 down -0.27% to end the session.
• Trump was considering a 60-day extension for the March 1 trade deadline, according to Bloomberg, although follow-up reports indicated that both the U.S. and China remained far apart on structural reform demands. In addition, White House press secretary Sarah Sanders said that Trump is set on signing the spending bill and declaring a national emergency to build a border wall, which caused some minor gyrations in the market.
• The consumer staples sector (-1.2%) felt the brunt of the negative fallout in Dow component Coca-Cola (KO 45.59, -4.20, -8.4%) after it disappointed with its FY19 earnings guidance.  The financial sector (-1.2%) for its part underperformed as a flattening yield curve, and worries about net interest margin compression, weighed on the bank stocks. American Intl. Group (AIG 40.19, -3.99, -9.0%), which fell well short of consensus earnings estimates for the December quarter, was a notable drag on the sector as well. Dow component Cisco Systems (CSCO 48.40, +0.90, +1.9%) provided the information technology sector with added support as it gained ground after beating earnings estimates, guiding Q3 revenue above consensus, raising its quarterly dividend by 6.0%, and approving a $15 billion increase to its stock repurchase program.

BLOCKCHAIN & CRYPTOCURRENCY NEWS

Santander Enters $700 Million Deal to Use IBM’s Tech, Including Blockchain

One of Europe’s largest banks, Banco Santander, and tech giant IBM have announced an agreement to accelerate the bank’s development of technologies such as blockchain. The five-year global technology agreement is aimed at enhancing the financial institution’s services using emerging technologies — such as blockchain, artificial intelligence and big data — provided by IBM. The deal between IBM and Banco Santander is reportedly valued at approximately $700 million. The move aims to reduce the bank’s annual costs on IT spending and significantly enable Santander Group to evolve towards the open, flexible and modern IT environment it requires. According to David Soto, IBM General Manager for Santander Group, Santander Group is leveraging IBM technologies to support their security and regulatory work, and to rapidly develop new services that meet emerging customer demand by tapping into IBM’s unique technology and industry expertise.

South Korea’s Largest Telecom Company to Develop Local Crypto: Report

South Korea’s leading telecommunications company, KT Corporation, has been selected to develop a local cryptocurrency in the South Korean city of Gimpo. The crypto called “K token” will reportedly be introduced in April, after a pilot project is carried out next month. The city plans to issue 11 billion won (over $9.7 million) worth of the currency per year, which includes budgets for various social services and development projects. The blockchain-based currency will reportedly only be available for use at merchants in the Gimpo area. The system will permit payments by scanning QR codes, and merchants can request funds to be converted into fiat and transferred to their bank accounts without incurring fees. KT plans to expand the cryptocurrency to local governments that have agreed to try the scheme, based on the coin’s performance in Gimpo according to ZDNet.

JPMorgan Chase to Launch ‘JPM Coin,’ Using Crypto to Speed Settlements

United States banking giant JPMorgan Chase (JPM) is launching its own cryptocurrency in a U.S. banking first, CNBC reported on Feb. 14. In a move commentators may see as unlikely, the multinational lender will use its newly developed asset, dubbed “JPM Coin,” to increase settlement efficiency, initially within three of its operations. JPM Coin will initially focus on international settlements by major corporations, helping speed up transactions that currently take a day or longer using extant options such as SWIFT. Elsewhere, treasury services and securities transactions are also in line to benefit, Farooq saying the cryptocurrency could expand further if it proves successful. Only a small amount of the total funds involved in the three areas would involve JPM Coin at first. The banking giant became notorious among cryptocurrency participants in mid-2017, when its CEO Jamie Dimon openly called Bitcoin a “fraud,” comments he later personally refuted to Cointelegraph at the World Economic Forum last year.

NOTABLE MOVES 

As of Thu, Feb 14, 08:00 Singapore Time Zone UTC+8

USDJPY, +0.41%, $110.93
EURUSD, -0.58%, $1.1259
GBPUSD, -0.31%, $1.2852
USDCAD, +0.20%, $1.3263
AUDUSD, -0.11%, $0.7088
NZDUSD, +1.07%, $0.6807

S&P500, +0.30%, 2,753.03
Nasdaq, +0.08%, 7,420.38
Nikkei Futures, +1.16%, 21,122.5

CURRENCY MARKET WRAP 

• U.S. CPI m/m; 0.0% vs 0.1% Exp. Core CPI m/m 0.2% vs 0.2% Exp. The key takeaway from the report is that core CPI is stable above the Fed’s longer-run target. That could give it some leeway to remain patient for the time being, but at the same time, if the stock market keeps rallying and economic data improve, it could be a basis to consider raising rates again.
• U.S. Treasuries finished on a lower note, pushing yields higher across the curve. The 2-yr yield increased three basis points to 2.53%, and the 10-yr yield increased two basis points to 2.71%. The U.S. Dollar Index rose 0.5% to 97.17. WTI crude increased 1.3% to $53.80/bbl.
• Kiwi caught strong bids right after the RBNZ’s monetary policy announcement. Investors felt that the RBNZ was not dovish enough even though they pushed back their forecast for a rate increase to early 2021 and said they plan to keep interest rates at its current level through 2019 and 2020. Part of the reason is because the central bank sees growth picking up this year with employment near maximum sustainable level. While a rate cut may be needed if growth doesn’t accelerate, RBNZ Governor Orr did not feel that the chance of easing increased over the past 3 months. 

STOCK MARKET WRAP 

• The S&P 500 increased as much as 0.6% on Wednesday, as continued optimism that U.S.-China trade talks were progressing favorably underpinned another broad-based rally. The benchmark index, however, fell off morning highs and spent a good portion of the day trying to get back to its best levels.  It nearly did, but a wave of selling activity in the final 30 minutes knocked it back again.  The S&P 500 ended the session up 0.3%.
• Early optimism was buoyed by reports that China President Xi will meet with the U.S. delegation in Beijing to discuss trade issues on Friday. Some of the early buying interest faded, though, after news hit that Senator Marco Rubio (R-FL) plans to file a bill that would make expensing permanent and tax corporate buybacks the same way as dividends. If that bill ultimately came to pass, it could potentially lead to lower share buyback activity that leads to lower EPS growth.  It was an implication that served to take a little steam out of the market.
• Activision Blizzard (ATVI 44.57, +2.90) rose 7.0%, recouping a good chunk of its losses from last week despite mixed Q4 results and cautious guidance for FY19. On the downside, TripAdvisor (TRIP 56.94, -3.45) and Dish Network (DISH 28.86, -2.40) fell -5.7% and -7.7%, respectively, after the companies missed earnings expectations.
• Separately, Dow component Johnson & Johnson (JNJ 134.45, +0.29, +0.2%) announced plans to acquire robotics company Auris Health for approximately $3.4 billion.

BLOCKCHAIN & CRYPTOCURRENCY NEWS

Coinbase Wallet Users Can Back Up Encrypted Keys on Google Drive and iCloud
Users of Coinbase Wallet can now back up their private keys on Google Drive or iCloud, according to an official announcement on Feb. 12. In the statement, Coinbase states that allowing users to upload their keys to a cloud provides a safeguard against lost keys, will will help them avoid losing funds should the keys be misplaced. Coinbase notes that neither they nor the cloud services will have access to user funds, as recovery phrase key is unlocked by a password known only to the user. The backup is purportedly encrypted with AES-256-GCM encryption, which is only accessible through the Wallet mobile app. Coinbase notes that, in addition to Google Drive and iCloud, they will expand support to other clouds in the future. The feature is an opt-in service that does not replace or supersede the original recovery option.

South Korea’s Second Most Populous City Signs MoU With Blockchain Firm to Promote Fintech
The South Korean city of Busan has signed a Memorandum of Understanding (MoU) with blockchain company Hyundai Pay. According to the announcement, South Korea’s second most populous city after Seoul and Hyundai Pay, a company that developed a blockchain platform and a cryptocurrency wallet, will cooperate in order to promote the growth of startups and jobs in Busan. The MoU specifies plans to relocate the Hyundai Pay headquarters to Busan and to create needed fintech infrastructure. “We are planning to expedite blockchain-based platforms and services and develop Busan into a Mecca for blockchain and Fintech through intimate integration with financial institutions in the future.” an official of Busan City underlined.

World’s 5th Largest Bank Aims to Debut Blockchain Payment Network in 2020
Japan’s Mitsubishi UFJ Financial Group (MUFG) has officially announced it will launch a new blockchain-based payment system. The world’s fifth-largest bank is working on the project in partnership with United States content delivery network Akamai, with the aim to launch in H1 2020. MUFG and Akamai had first announced a partnership in May of last year, issuing an outline of what would become the Global Open Network and setting a launch date for the start of the 2018 fiscal year that has not been realized. The new payment network will be a diverse payment service equipped with an interface that can be used as a communications network, and including functions for the transfer and management of value through blockchain. MUFG has embarked on various blockchain endeavors in recent months, among which was an initiative to develop a remittance corridor with Brazil using Ripple (XRP).

NOTABLE MOVES 

As of Wed, Feb 13, 08:00 Singapore Time Zone UTC+8

USDJPY, +0.12%, $110.51
EURUSD, +0.50%, $1.1332
GBPUSD, +0.31%, $1.2890
USDCAD, -0.55%, $1.3231
AUDUSD, +0.59%, $0.7103
NZDUSD, +0.12%, $0.6740

S&P500, +1.29%, 2,744.73
Nasdaq, +1.46%, 7,414.62
Nikkei Futures, +2.89%, 21,008.0

CURRENCY MARKET WRAP 

• U.S. lawmakers reached a tentative agreement to prevent another government shutdown, though Trump expressed some reservations about the deal, which included funding that was short of the $5.7 billion requested by the White House, but believed that another shutdown was not likely. As for trade, Trump said there are no plans for a meeting with President Xi at the end of March, but confirmed that the deadline could be extended if real progress is evident.  
• U.S. Treasuries ended the day on a lower note, pushing yields higher across the curve. The 2-yr yield and the 10-yr yield increased two basis points each to 2.50% and 2.68%, respectively. The U.S. Dollar Index pulled back -0.4% to 96.72, recording its first loss of the month. WTI crude rose 1.4% to $53.12/bbl.
• The commodity bloc caught bids in response to positive trade developments.

STOCK MARKET WRAP 

• The S&P 500 gained 1.29% on Tuesday, as optimism that U.S. lawmakers reached a tentative agreement to prevent another government shutdown helped fuel broad-based buying interest. Investors also remained hopeful for progress on the ongoing U.S-China trade talks.
• Tuesday’s gains helped the S&P 500 close above its 200-day moving average (2743) for the first time since Dec. 3. 10 of the 11 S&P 500 sectors finished with gains with materials (+2.3%), consumer discretionary (+1.7%), industrials (+1.6%), and financials (+1.6%) leading the advance. Conversely, the real estate (-0.7%) sector was the lone group to finish with a loss.
• Facebook (FB 165.04, -0.75) was a notable laggard, losing -0.5% after California Governor Gavin Newsom proposed a “digital dividend” that would require technology companies to share profits with consumers in exchange for collecting information, according to Bloomberg.

BLOCKCHAIN AND CRYPTOCURRENCY UPDATES

Bithumb Partners With Blockchain VC Firm Nvelop to Launch Exchange in UAE: Report

South Korean cryptocurrency exchange Bithumb will open a new platform in the United Arab Emirates (UAE). The UAE-based platform will allegedly be developed in partnership with Abu Dhabi-based firm Nvelop and will function as a springboard for Bithumb to expand into other countries in the Middle East. The partnership with Nvelop will enable them to build a foothold in the Middle East as a global exchange. Nvelop is a joint project from Abu Dhabi-based E11 Investment Fund and Taiwanese venture capital outfit Trill Ventures Group. The joint venture was reportedly established to fund and develop blockchain initiatives in the Middle East and North Africa. Bithumb joins a steadily increasing trend of major crypto exchanges opting to pursue international expansion plans amid challenging market conditions.

SEC Commissioner Suggests Excessive Crypto Regulation Hurts Growth

A commissioner at the US Securities and Exchange Commission (SEC), Hester Peirce, has said that the official regulation of cryptocurrencies could actually stunt the technology’s development. Those comments come at a time when the SEC has been accused of acting contrarily and gives hope to those wanting governments to take a step back to prevent over-regulation. Peirce said that she would keep an eye on ensuring no laws harm crypto projects, citing stablecoin Basis, which is shutting down and returning its $133 million in capital to investors due to the difficulty of complying with securities regulations. Peirce’s comments come at a time when the SEC’s views on cryptocurrencies haven’t been wholly clear. Last year the SEC rightly took enforcement action against initial coin offerings and other crypto companies perpetrating fraud. But, as Peirce noted, this doesn’t mean regulators and government agencies should be automatically skeptical about everything to emanate from the cryptocurrency sector.

Binance’s Decentralized Exchange Is About to Launch for Public Testing

Binance, the world’s largest cryptocurrency exchange by adjusted trading volume, is about to release its decentralized exchange, Binance DEX, for public testing. The firm’s CEO Changpeng Zhao tweeted Tuesday that the firm is targeting a date of Feb. 20 for the public testnet release of Binance Chain – the native public blockchain being developed to support the DEX. According to Cao, the firm has already given early access to a few “selected partners,” including wallet developers and blockchain explorers, who will be integrating tools into the decentralized platform. Ledger’s hardware wallet, the Nano S, is already integrated while the Nano X and wallets from Trezor and KeepKey will come on board in the future. Binance DEX will be available on all platforms, including Windows, Linux, Mac OS, iOS and Android, as per the AMA. There will be a listing fee of about $100,000 for tokens listed on Binance DEX – a high entry hurdle that he said was set to reduce the number of “spam or scam projects.” Binance Chain was unveiled in March 2018, with the firm saying at the time that it is being built to offer “low latency, high throughput trading, as well as decentralized custody of funds.”

 NOTABLE MOVES  

As of Sat, Feb 9, 08:00 SGT Time

USDJPY,- 0.07%, $109.74
EURUSD, -0.09%, $1.1330
GBPUSD, -0.08%, $1.2945
USDCAD, -0.28%, $1.3271
AUDUSD, -0.15%, $0.7090
NZDUSD, -0.03%, $0.6746

S&P500, +0.07%, 2,707.88
Nasdaq, +0.12%, 6,913.13
Nikkei Futures, -2.08%, 20,290.0

CURRENCY MARKET WRAP  

• U.S. Treasuries edged higher, pushing yields lower across the curve. The 2-yr yield decreased one basis point to 2.46%, and the 10-yr yield decreased two basis points to 2.63%. The U.S. Dollar Index gained 0.1% to 96.63. WTI crude increased 0.1% to $52.76/bbl.
• The Canadian labor print came in strong.  Economists were only looking for an addition of 6.5K jobs but instead more than 66.8K jobs were created in the month of January. Private sector hiring was exceptionally strong which will soften the blow of weaker global growth. This report also reinforces the Bank of Canada’s view that the economy is on solid footing but as Governor Poloz said, there’s nowhere to hide from Brexit or trade fights so there’s no reason to raise rates.

STOCK MARKET WRAP 

• The S&P 500 declined as much as -0.9% on Friday as follow-through selling and an effort to de-risk sent the broader market lower. However, steady buying interest throughout the afternoon, and a last-minute swarm of buyers, lifted the S&P 500 to a gain of 0.07%. Most sectors were down in the early going amid a continuation from Thursday’s narrative, which emphasized concerns about growth, trade matters, and disappointing earnings guidance. There was also a prevailing sense that the market was due for some consolidation, considering the extent of its rally and no news catalyst to support a continued advance. Some buying interest may have been generated by a Reuters report, which quoted San Francisco Fed President Mary Daly as saying the central bank is debating whether quantitative easing should be reserved for emergencies or used more readily.
• Amazon (AMZN 1588.22, -26.15) made headlines, losing -1.6% amid news that CEO Jeff Bezos accused National Enquirer’s publisher of blackmail. Its underperformance was a huge drag on the consumer discretionary space, which featured some notable post-earnings movers. In earnings news, toy maker Mattel (MAT 15.23, +2.87) surged 23.2% after it beat top and bottom-line estimates and provided a positive financial outlook for 2019. Goodyear Tire (GT 18.69, -1.86), however, fell -9.1%% after the company missed top and bottom-line estimates.

BLOCKCHAIN & CRYPTOCURRENCY UPDATES

Credit Suisse Completes Joint Mutual Fund Transactions Using Blockchain
Global investment bank Credit Suisse and Portuguese Banco Best have completed end-to-end fund transactions on blockchain. The financial institutions have reportedly processed every part of the fund trade process by implementing a blockchain-based decentralized platform, FundsDLT. Designed to improve the efficiency of fund transaction processing with the use of blockchain and smart contracts, FundsDLT would purportedly reduce the time between request and the settlement from delivery of the order to trade processing. Within the initiative, Lisbon-based Banco Best — specializing in banking, asset management and trading — was responsible for the Application Programming Interface (API) integration, and also developed a dedicated application to collect client experiences.

Italian Parliament Approves Bill Defining Distributed Ledger Tech, Blockchain Terms
The Italian House of Representatives has approved a bill defining distributed ledger technologies (DLT) such as blockchain. With 275 votes in favor, 206 against and 27 abstentions, the bill dubbed “Semplificazioni” has moved forward. The Agenzia per l’Italia Digitale will now define the technical criteria that smart contracts will have to comply with in order to have legal validity. Maria Laura Mantovani, a member of the Italian Parliament in the Movimento 5 Stelle party, said that a favorable use case for blockchain is its application in online voting. However, Mantovani noted that there are not projects in place to implement such systems.

Ethereum Denies It Is Mulling $15 Mln Investment to Develop Verifiable Delay Functions
The Ethereum Foundation has refuted alleged plans to spend a prospective $15 million on the development of Verifiable Delay Functions (VDFs) for use in its transition to a Proof-of-Stake (PoS) network. A report from crypto news outlet CoinDesk had purported that the Foundation was considering an investment of $15 million to develop the technology, given its prospective benefit for Ethereum’s future transition to a PoS-based system. VDFs are a type of technology that functions to protect any system that relies on the generation of (pseudo) random values from manipulation strategies or attack. Reportedly, the shift to PoS is expected to be completed with the final upgrade of the Ethereum network — known as Serenity, or Ethereum 2.0 — which will be the last in a series of four stages set out in the platform’s roadmap.

NOTABLE MOVES 

As of Fri, Feb 8, 08:00 Singapore Time zone UTC+8

USDJPY, -0.15%, $109.81
EURUSD, -0.19%, $1.1341
GBPUSD, +0.13%, $1.2951
USDCAD, +0.70%, $1.3307
AUDUSD, -0.05%, $0.7100
NZDUSD, -0.44%, $0.6745

S&P500, -0.94%, 2,706.05
Nasdaq, -1.32%, 6,904.98
Nikkei Futures, -1.91%, 20,472.0      

CURRENCY MARKET WRAP 

• Initial claims for the week ending February 2 decreased by 19,000 to 234,000 (consensus 220,000). Continuing claims for the week ending January 26 decreased by 42,000 to 1.736 million. The key takeaway is that the labor market is still looking pretty good, as initial claims remain low.
• NEC Director Larry Kudlow told Fox Business Thursday morning that there is still “a pretty sizable distance to go in U.S. trade talks.” A White House official then told CNBC that a meeting between Trump and China’s President Xi was “highly unlikely” to happen prior to the March 1 trade deadline. Trump later confirmed that a meeting is not likely before the deadline. 
• Growth concerns resurfaced following a batch of disappointing updates from overseas: (1) the Bank of England voted unanimously to leave its key rate unchanged at 0.75% (expected) and lowered its 2019 GDP growth outlook to 1.2% from 1.7%, (2) the EU Commission cut its 2019 euro area GDP growth forecast to 1.3% from 1.9%, (3) Germany reported a 0.4% month-over- month decline in industrial production in December (expected 0.8%) and (4) the Reserve Bank of India surprisingly cut its key lending rate 25 basis points to 6.25%.
• U.S. Treasury yields declined amid the economic growth concerns. The 2-yr yield decreased six basis points to 2.47%, and the 10-yr yield decreased five basis points to 2.65%. The U.S. Dollar Index increased 0.2% to 96.54. WTI crude lost -2.4% to $52.70/bbl

STOCK MARKET WRAP 

• The S&P 500 lost -0.94% on Thursday, as recurring concerns about a slowdown in global growth and the prospects of a U.S.-China trade deal weighed on investor sentiment. In addition, an underlying sense that the market was due for a pullback also fuelled broad-based profit taking. The S&P 500 energy (-2.1%), information technology (-1.4%), and materials (-1.4%) sectors led Thursday’s retreat. Conversely, the defensive-oriented, and higher-yielding, utilities (+1.3%) and real estate (+0.8%) sectors were the lone groups to finish with gains.
• In earnings news, Twitter (TWTR 30.80, -3.36, -9.8%), Fiat Chrysler (FCAU 15.23, -2.12, -12.2%), and Tapestry (TPR 33.48, -5.83, -14.8%) all posted steep losses after the companies disappointed investors with their results. On the other hand, Chipotle Mexican Grill (CMG 585.78, +59.72) jumped 11.4% after it impressed investors with a strong report and reassuring outlook.

BLOCKCHAIN AND CRYPTOCURRENCY NEWS

State-Issued Digital Currencies Can Squeeze Banks, Says South Korea Central Bank
South Korea’s central bank issued a warning over central bank digital currencies (CBDCs) a week after saying it would not introduce one itself. CBDCs, which are also known variously as state-backed or government-backed digital currencies, involve a blockchain-based version of a country’s fiat currency either replacing or circulating in tandem with paper notes and coins. A number of governments are currently examining the feasibility of using a CBDC, while South Korea formally decided against the measure in late January. The decision came as a result of a six-month consultation process from Bank of Korea (BoK). Now, the central bank has claimed in a report that a CBDC would result in mass withdrawals of funds from private institutions, squeezing liquidity and pushing up interest rates. Seoul has opted not to make significant changes to its stance on cryptocurrency as a whole in recent weeks. 

Two Investment Firms Launch ETF Tracking Cloud Computing and Blockchain Companies
United States-based Investment management firm AdvisorShares and investments advisory company Sabretooth Advisors will jointly launch an exchange-traded fund (ETF) that tracks tech companies, including those involved with blockchain and cloud computing. ETFs are marketable securities that track a basket of assets proportionately represented in the fund’s shares. ETFs are offered on all asset classes, including traditional investments and alternative assets like commodities or currencies, also enabling investors to short markets or to gain leverage. The idea of the new AdvisorShares Sabretooth ETF (ticker: BKCH) is that entities deploying cloud computing and involved with emerging technologies like blockchain could reach increased profitability and rises in share prices within a reasonable time. Many see the emergence of cryptocurrency and blockchain ETFs, among other derivatives, as a sign that those markets are maturing.

Major Swiss Stock Exchange SIX to Launch New Blockchain-Powered Digital Exchange
Switzerland’s principal stock exchange SIX Swiss Exchange will test blockchain integration for its forthcoming parallel digital trading platform SDX in the second half of this year. SIX Swiss Exchange sees roughly 5.19 billion Swiss Francs (CHF) (~$5.18 billion) in daily turnover, and has a market capitalization of over 1.67 trillion CHF ~($1.6 trillion). CEO Jos Dijsselhof said that the company had chosen the technology for the time efficiency and improved security it can offer across all stages of stock trading and settlement. Dijsselhof added that wholly digital, blockchain-powered stock trading will not only minimize risks, but widen the range of tradable titles, affirming his ambition that SIX would succeed in building “a whole new stock market on the blockchain with completely integrated trading, handling and custody of digital assets”.  SIX expects its blockchain-based SDX digital exchange to supersede its existing marketplace within a decade.

NOTABLE MOVES 

As of Thu, Feb 7, 08:00 Singapore Time zone UTC+8

USDJPY, +0.01%, $109.99
EURUSD, -0.41%, $1.1368
GBPUSD, -0.07%, $1.2934
USDCAD, +0.71%, $1.3219
AUDUSD, -1.71%, $0.7111
NZDUSD, -1.82%, $0.6769

S&P500, -0.22%, 2,731.61
Nasdaq, -0.37%, 6,997.62
Nikkei Futures, +0.20%, 20,872.0

CURRENCY MARKET WRAP 

• U.S. Treasuries ended the day near their unchanged marks. The 2-yr yield decreased one basis point to 2.53%, and the 10-yr yield remained unchanged at 2.70%. The U.S. Dollar Index increased 0.3% to 96.38. WTI crude rose 0.4% to $53.99/bbl.
• Aussie was the biggest loser, dropping -1.71%, this was the largest decline in more than a year. After a relatively benign monetary policy statement, RBA Governor Lowe surprised investors when he said the interest rate outlook is now more evenly balanced. He added that global risks and domestic housing market consumption requires the central bank to have the budget to respond to any downturn. In doing so, he has not only ruled out a 2019 rate hike but also fuelled modest expectations for easing. With retail sales falling, service and construction activity contracting, the RBA’s cautious outlook solidified the top in Aussie.
• Kiwi had been tracking Aussie, but was heavily offered in a matter of seconds following a significantly weaker than expected employment report. Economists had been looking for the unemployment rate to rise from 3.9% to 4.1% but instead it rose to 4.3% from an upwardly revised 4% (from 3.9%) reading. Employment increased less than expected and the participation rate declined in Q4. Average hourly earnings growth also slowed to 1% from 1.4%. Although dairy prices rebounded today, this report validates the central bank’s decision to keep interest rates on hold for the foreseeable future.

STOCK MARKET WRAP 

• The S&P 500 lost -0.22% on Wednesday in a lackluster trading session. The benchmark index traded with modest losses nearly the entire day with price action dictated by the underperformance of the entertainment software stocks, the outperformance of the semiconductor stocks, and an underlying sense that the market was due for a breather.
• Entertainment software stocks dragged on the communication services sector following earnings reports from Electronic Arts (EA 80.21, -12.31, -13.3%) and Take-Two Interactive (TTWO 92.53, -14.76, -13.8%). The two companies disappointed investors with quarterly guidance that was lower than expected, which reportedly fuelled competition concerns. Dow component Walt Disney (DIS 111.41, -1.25) for its part lost -1.1% despite beating earnings expectations.
• The heavily-weighted tech sector derived its relative strength from the outperformance of chip stocks. The Philadelphia Semiconductor Index rose 2.6%. It wasn’t the downside guidance for the March quarter from Microchip (MCHP 89.31, +6.07, +7.3%) and Skyworks Solutions (SWKS 84.69, +8.73, +11.5%) that pleased investors. Instead, it was Microchip’s contention that the March quarter should be a “bottom” for revenues that presumably fuelled broad-based buying interest.
• Separately, Snap (SNAP 8.59, +1.55) made headlines, surging 22.0% after the company provided a better-than-feared indication of its daily active users in its quarterly report. Specifically, the number of daily active users was sequentially flat at 186 million in the fourth quarter. Snap added that it doesn’t expect to see a sequential decline in the first quarter.

BLOCKCHAIN & CRYPTOCURRENCY NEWS 

US Crypto Exchange Coinbase Adds Bitcoin Support to Coinbase Wallet App
As explained by the crypto exchange, Coinbase Wallet is slightly different from the main app, Coinbase (or Coinbase.com). With the latter, the cryptocurrencies purchased by customer and the private keys are stored by Coinbase. With Coinbase Wallet, users stores their own crypto protected by their unique private keys. The new update for Coinbase Wallet will be rolled out for iOS and Android next week. Bitcoin support will be activated by default, as soon as users choose to receive the coin to the wallet. The users’ private keys will be encrypted on the phone using Secure Enclave technology. The announcement states that Coinbase Wallet supports both SegWit and Legacy addresses and is considering adding add Bitcoin Cash (BCH), Litecoin (LTC), and other major cryptocurrencies.

Wall Street Blockchain Alliance Joins Enterprise Blockchain Consortium R3
The Wall Street Blockchain Alliance (WSBA) has joined blockchain consortium R3 to develop applications and solutions on their Corda platform. According to a statement made by the CEO of R3, David E. Rutter, the WSBA and R3 will collaborate in order to “advocate a strategic approach to collaborating with regulatory bodies so that financial markets, and beyond can gain the full benefits of blockchain’s capabilities.” R3, an enterprise blockchain software firm with over 300 partners, has developed Corda, an open-source blockchain platform for both the private and public sectors across multiple industries.

US Crypto Exchange Coinbase Launches Paypal Withdrawals Support for EU Users
Major United States crypto exchange and wallet provider Coinbase is launching support for European Union residents to make fiat currency withdrawals to online payment system PayPal. Coinbase had first rolled out PayPal withdrawal support for U.S. users last month. The European extension of the service will reportedly apply to both E.U. residents and those living in European Free Trade Association countries — Iceland, Liechtenstein, Norway and Switzerland. Coinbase is currently looking to diversify its crypto support, as well as fiat gateways — in December, the exchange revealed it was exploring expanding its listed assets to over 30 cryptocurrencies in as many jurisdictions as regulatory authorities allow.

 NOTABLE MOVES  

As of Sat, Feb 2, 08:00 Singapore Time zone UTC+8

USDJPY, +0.57%, $109.50
EURUSD, +0,09%, $1.1457
GBPUSD, -0.09%, $1.3090
USDCAD, -0.24%, $1.3092
AUDUSD, -0.28%, $0.7253
NZDUSD, -0.29%, $0.6898

S&P500, +0.09%, 2,706.53
Nasdaq, -0.25%, 7,263.87
Nikkei Futures, -0.14%, 20,720.0

CURRENCY MARKET WRAP  

• January nonfarm payrolls increased by 304,000 (consensus 165,000), and the January ISM Manufacturing Index improved to 56.6% (consensus 54.1%) from 54.3% in December. The key takeaway from the January report is that, even with revisions that reduced total job gains in November and December by 70,000, job gains have averaged a solid 241,000 per month over the last three months, offering some data-based justification to think this economic expansion has more room to run with consumer spending providing support. The key takeaway from the ISM report is that the January increase was driven by solid growth in New Orders and Production, which suggests the U.S. manufacturing sector is holding up well despite concerns about the pace of global growth. Average Hourly Earnings m/m decreased to 0.1% (consensus 0.3%). Even though the labor market is on fire, wage growth is slowing and there’s a good chance of downward revisions next month. 
• The strong jobs data sparked selling interest in the bond market, driving yields higher. The 2-yr yield rose four basis points to 2.50%, and the 10-yr yield rose six basis points to 2.69%.

STOCK MARKET WRAP 

• Wall Street finished mixed on Friday, as investors digested better-than-expected economic data while shares of Amazon (AMZN 1626.23, -92.50, -5.4%) fell on disappointing guidance. Amazon reported fourth-quarter earnings of $6.04 a share on revenue of $72.4 billion. Analysts expected earnings of $5.65 a share on revenue of $71.88 billion, according to FactSet. It was the second consecutive holiday quarter that Amazon beat estimates, after not having done so since 2009. Amazon Web Services, though, continued to be Amazon’s profit and growth engine. The cloud-computing arm reported sales growth of 45%, to $7.43 billion from $5.11 billion, and operating income that increased 61%, to $2.18 billion from $1.35 billion.
• The S&P 500 added 0.09%, increasing its weekly gain to 1.6%. The S&P 500 energy (+1.8%), information technology (+0.6%), and financial (+0.5%) sectors outperformed the broader market. Conversely, the consumer discretionary (-1.8%) and real estate (-0.7%) sectors underperformed. The energy sector’s outsized gain was the result of higher oil prices ($55.28/bbl, +$1.51, +2.8%) and a positive reaction to earnings beats from Dow components Exxon Mobil (XOM 75.92, +2.64, +3.6%) and Chevron (CVX 118.37, +3.72, +3.2%). Fellow Dow component Merck (MRK 76.45, +2.02) rose 2.7% after it also beat earnings expectations.

BLOCKCHAIN & CRYPTOCURRENCY NEWS

US Securities Regulator Solicits Blockchain Analytics Companies for Data Review
The United States Securities and Exchange Commission (SEC) is seeking sources for blockchain data and its analysis, a statement issued by the agency revealed on Jan. 31. According to the statement, the SEC is trying to find businesses able to provide blockchain data to support its risk monitoring and compliance enforcement activity, as well as inform the commission about digital assets. Last month, the agency announced that cryptocurrencies are one of the its top examination priorities for the current year.

Unconfirmed: CoinLab Increases Mt. Gox Claim from $75 Million to $16 Billion
Bitcoin business incubator CoinLab has reportedly filed a 1.7 trillion JPY ($16 billion) claim against the now-defunct cryptocurrency exchange Mt. Gox, according to an alleged photo of the filing document posted on Reddit on Feb. 1. As Cointelegraph reported in its Mt. Gox recap in March last year, in 2013, CoinLab, a former business partner of the exchange, sued the company for $75 million, claiming breach of contract. The contract stipulated that CoinLab would take over the American customers of Mt. Gox, but it never happened.

Bitcoin Futures Expired Last Week, Did It Affect $10 Billion Plunge of Crypto Markets?
On Jan. 29, the valuation of the crypto market plunged by more than $10 billion within a 48-hour period, from $121 billion to $111 billion. Major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) recorded losses in the range of 5 to 10 percent against the United States dollar, demonstrating poor momentum. Throughout the past several months, the cryptocurrency market has demonstrated volatility in a low price range, unable to break out of key resistance levels.

NOTABLE MOVES 

As of Fri, Feb 1, 08:00 Singapore Time zone UTC+8

USDJPY, -0.18%, $108.83
EURUSD, -0.27%, $1.1447
GBPUSD, -0.05%, $1.3110
USDCAD, -0.15%, $1.3129
AUDUSD, +0.33%, $0.7271
NZDUSD, +0.30%, $0.6915

S&P500, +0.86%, 2,704.12
Nasdaq, +1.37%, 7,281.74
Nikkei Futures, +0.76%, 20,767.0    

CURRENCY MARKET WRAP 

• The Employment Cost Index showed compensation costs for civilian workers increased 0.7% (consensus +0.8%), seasonally adjusted, in the fourth quarter, down from 0.8% in the third quarter. Wages and salaries, which comprise about 70% of compensation costs, increased 0.6%, while benefit costs jumped 0.7%. The key takeaway from the report is that it showed an acceleration in the growth of wages and salaries for civilian workers, which increased 3.1% for the 12 months ending in December 2018, versus 2.5% for the 12-month period ending in December 2017.
• The Treasury market seems to be pricing in a softer economic outlook, which has been reflected in the sharp drop in yields following Wednesday’s FOMC decision and Fed Chair Powell’s press conference. After which, both the 2-yr yield and the 10-yr yield decreased four basis points Wednesday, the 2-yr yield fell seven basis points to 2.46% today while the 10-yr yield fell six basis points to 2.64%. The U.S. Dollar Index increased 0.2% to 95.57.
• The Euro did poke through the key 1.1500 level, but the rally stalled and reversed after horrid German Retail Sales data which saw a decline of -2.1% YoY vs a consensus expectation of 1.5% YoY gain. This was the sharpest monthly drop since 2007 and a clear warning that the German consumer is tightening the purse strings even as the overall labor markets are at multi-year lows in unemployment. 

STOCK MARKET WRAP 

• The S&P 500 gained 0.86% on Thursday, as another batch of better-than-feared earnings added to the optimism surrounding U.S.-China trade relations and a dovish-minded Fed. The Dow Jones Industrial Average, however, lost -0.1% due in large part to negative price action in Microsoft (MSFT 104.43, -1.95, -1.8%), Visa (V 135.01, -2.59, -1.9%), and DowDuPont (DWDP 53.81, -5.47, -9.2%) following their earnings reports. The S&P 500 communication services sector was easily the best-performing group on Thursday, rising 3.7% on the strength of Facebook (FB 166.69, +16.27, +10.8%) and Charter Communications (CHTR 331.05, +41.14, +14.2%). The utilities (+2.1%) and consumer staples (+1.8%) sectors also outperformed the broader market.
• General Electric (GE 10.16, +1.06) was another headline stock, climbing 11.7%, after the company beat revenue expectations and pleased investors with a $4.9 billion free cash flow figure and a lower-than-expected $1.5 billion settlement with the Department of Justice.

BLOCKCHAIN & CRYPTOCURRENCY NEWS 

South Korean Fintech Firm Launches ‘First’ Won-Backed Stablecoin

South Korea-based fintech firm BxB Inc. has launched the first supposed stablecoin backed by the Korean won. There was an initial beta soft launch of the coin on Airswap, a decentralized exchange platform, before the tokens were released on the global and Korean exchange. The coin, KRWb, is reportedly the first stablecoin produced in South Korea to be backed by the national currency, the won. The coin is purportedly supported with the won at a 1:1 ratio. BxB Inc purportedly managed the mining and burning of KWRb in order to better assure liquidity via an Ethereum-based smart contract process using a multi-signature checkpoint and a third party auditor. The initial deposit of 400 million won ($360,000) was collateralized to the equivalent value of KRWb tokens. The funds were generated by BxB Inc, as well as investment from Singapore-based BxB Capital PTE Ltd. KRW will reportedly be available globally to any user to an ERC-20 compatible service. Users do not need access to the won in order to transact with the KRWb. BxB Inc. is reported to be in ongoing discussions with South Korean and global exchanges, including plans to announce additional listings during Q1 2019. The KRWb is live on three exchanges.

Danish Government’s Energinet Signals Iota Deal to Improve Energy Sector Offerings

Danish state-owned energy company Energinet has expanded its partnership with distributed ledger network Iota to investigate use of its technology in new areas. Energinet, which is an independent enterprise under Denmark’s Climate and Energy Ministry, wants to examine how it could leverage Iota’s Tangle technology in the energy and Internet of Things (IoT) markets. The two entities have worked together on a data marketplace initiative since late 2017, a larger project involving other companies. Iota’s product offering is specifically geared to IoT, and Energinet looks to create new solutions based on IoT for emerging phenomena, such as green energy and electric vehicles. This collaboration will include services applicable to Energy and adjacent areas such as smart cities, smart buildings and mobility. This week, Japanese IT giant Fujitsu announced it had completed a trial of blockchain technology with a Japanese energy supplier aimed at improving shared electricity structures.

Ethereum-Based ‘Wrapped’ Token Backed by Bitcoin Launches

Wrapped Bitcoin (WBTC), an Ethereum (ETH)-based token backed by Bitcoin (BTC), has launched today, Jan. 31, according to a press release on the network’s website. The currency is a joint initiative by blockchain security firm BitGo, Kyber Network liquidity protocol and others. BitGo announced the development of the coin backed 1:1 with Bitcoin in October 2018. A statement by the firm then said that Wrapped Bitcoin will provide users with a “wide variety of new decentralized use cases including on decentralized exchanges (DEXs), as collateral for stablecoins or lending, for payments and flexible smart contracts within the Ethereum ecosystem.” WBTC is an ERC-20 token, which are tokens designed and used solely on the Ethereum platform that make the streamline the creation of new tokens. ERC-20 tokens provide a sort of template by which developers can build a new token, sparing them from coding a new crypto from the ground up. Wrapped Bitcoin will purportedly allow for new applications and use cases for Bitcoin on the Ethereum network. All WBTC smart contracts have been audited by third-party firms and the proof of reserve is showing an exact 1:1 ratio of minted WBTC to BTC is observable on-chain.

NOTABLE MOVES 

As of Thu, Jan 31, 08:00 Singapore Time zone UTC+8

USDJPY, -0.40%, $108.96
EURUSD, +0.50%, $1.1489
GBPUSD, +0.40%, $1.3122
USDCAD, -0.93%, $1.3144
AUDUSD, +1.36%, $0.7254
NZDUSD, +0.89%, $0.6895

S&P500, +1.55%, 2,681.05
Nasdaq, +2.20%, 7,183.08
Nikkei Futures, +1.13%, 20,862.5    

CURRENCY MARKET WRAP 

• The ADP National Employment Report showed an increase of 213,000 in January (consensus 180,000), and the December reading was revised to 263,000 (from 271,000).
• The FOMC voted unanimously to keep the fed funds rate unchanged at a target range of 2.25% to 2.50%, as expected. The S&P 500 more than doubled its gains from 0.8% to 1.7% in the time between the FOMC releasing its policy directive at 2:00 p.m. ET and Fed Chair Powell’s follow-up press conference at 2:30 p.m. ET to explain the FOMC’s thinking. The underlying message from that decision, and Powell’s press conference, is that the market need not fear the Fed (for the time being), as the Fed is content to be patient with its policy approach and is open to curtailing its balance sheet normalization effort if necessary. The Fed’s dovishness sent U.S. Treasuries in the belly of the curve to session highs. Longer-dated Treasuries were less affected. The 2-yr yield, which was up as much as two basis points, decreased four basis points to 2.53%. The 10-yr yield, which was up as much as two basis points, decreased two basis points to 2.70%. The U.S. Dollar Index also fell on the news, losing -0.4% to 95.43.
• Meanwhile trade talks aren’t going anywhere. Trump is under pressure to make a deal but with the Huawei charges, it is not clear how serious he really is. US and China plan to hold one to two more rounds of talks before the March 1 deadline.
• Aussie was bid on the back of better than expected inflation data. Although consumer price growth slowed year over year, the decline was less than expected thanks to a 0.5% increase in quarterly growth (Australia CPI q/q  0.5% vs expected 0.4%). The Reserve Bank said the next move in rates will be higher and this latest report supports their positive bias.

STOCK MARKET WRAP 

• The S&P 500 began the day comfortably higher as Apple’s (AAPL 165.25, +10.57, +6.8%) better-than-feared earnings and Boeing’s (BA 387.72, +22.81, +6.3%) impressive report fuelled broad-based buying interest. The benchmark index then added as much as 1.9% after the Federal Reserve provided some market-friendly commentary before finishing up 1.55%.
• Specifically, Apple reported in-line Q1 results and guided Q2 revenue that was towards the low end of expectations, yet that was apparently enough to placate investors who found some comfort in the solid growth reported for the company’s services business. Boeing for its part exceeded Q4 revenue and earnings estimates by a wide margin and issued upbeat FY19 guidance.
• Advanced Micro Devices (AMD 23.09, +3.84) joined Apple with a better-than-feared report, which catapulted the stock 20.0%, and provided strong support for the Philadelphia Semiconductor Index (+2.9%) and the heavily-weighted information technology sector.
• Alibaba (166.82, +6.34%) reported EPS of $1.77 compared to $1.67 expected, and revenue of $17 billion vs $17.7 billion expected for its fiscal third quarter ended Dec. 31. Revenue from its cloud-computing business increased 84% from the year-ago period to $962 million. Revenue from its core e-commerce operation rose 40% to $14.95 billion. Alibaba said it ended the quarter with 699 million mobile monthly active users, up 33 million from the previous quarter.
• Facebook (167.74, +11.52%) posted a solid earnings and revenue beat for the fourth quarter, and investors applauded, sending shares up as much as 11% in after-hours trading. The social network giant reported EPS of $2.38 compared to $2.18 expected, while revenue of $16.9 billion beat estimates for $16.4 billion. Daily active users rose 9% to 1.52 billion, in-line with consensus. After several quarters of declining or flat user growth in Canada and the U.S., Facebook said it added 1 million daily members in those territories.

BLOCKCHAIN & CRYPTOCURRENCY UPDATES 

Japanese IT Giant Fujitsu Completes Test of Blockchain Electricity Sharing Project

Japanese IT firm Fujitsu has successfully trialed a blockchain-based solution to address inefficiencies in electricity surplus management. Fujitsu, which partnered with local power distribution company ENERES, used blockchain to increase the success rates of power sharing, which is administered through a process known as Demand Response (DR). An agreement between utilities companies and consumers, DR aims to anticipate periods of peak demand by ensuring surplus power is available to those who need it. Fujitsu has now devised a system in which electricity consumers can efficiently exchange among themselves the electricity surpluses they have produced through their own electricity generation or power savings. The move is not the first venture into blockchain for Fujitsu, which launched a blockchain-based loyalty scheme for the retail sector in June last year, followed by plans for settlement infrastructure for nine Japanese banks in October.

SWIFT CEO Reveals Plans to Integrate Blockchain Consortium R3 Tech

Major global banking payments network SWIFT has revealed it plans to integrate technology from enterprise blockchain software firm R3. Speaking at the Paris Fintech Forum on Jan. 30, CEO Gottfried Leibbrandt said SWIFT would be formally announcing its plans for a Proof-of-Concept (PoC) with R3. Leibbrandt was reportedly participating in the panel alongside Brad Garlinghouse, CEO of Ripple — which has long touted itself as a blockchain competitor to SWIFT’s global interbank network, with Garlinghouse just recently commenting that “what we are doing on a day-to-day basis is in fact taking over SWIFT.” SWIFT last year took part in several blockchain pilots, but has not to date substantially rehauled its legacy wire transfer architecture.

US Blockchain Firm Introduces Wallet for Digital Assets and Securities

San Francisco-based blockchain firm TokenSoft has rolled out a beta version of its wallet for digital assets and digital securities. The new product called Knox Wallet provides cold storage and a self-custody platform for managing multiple assets, including both cryptocurrencies such as Bitcoin (ETH) and Ethereum (ETH), as well as tokenized assets such as real estate, equity, or debt. The wallet is now undergoing a testing phase, while the general availability launch is set for the first quarter of 2019. Back in December, TokenSoft invested in a broker-dealer that is compliant with the United States Securities and Exchange Commission (SEC). The investment purportedly enabled TokenSoft to offer issuers the option to host a token sale themselves or work with a broker-dealer to carry out the sale on their behalf.