NOTABLE MOVES 

As of Thu, Dec 13, 08:00 GMT (UTC +08:00)

USDJPY, +0.26%, $113.57.
EURUSD, -0.04%, $1.1363.
GBPUSD, +0.18%, $1.2654.

S&P500, -0.02%, 2,650.54
Nasdaq, -0.39%, 7,070.33
Nikkei Futures, -0.22%, 21,612.5

CURRENCY MARKET WRAP 

• U.S. Unemployment Claims at 206K vs expected 226K. Import Prices m/m at -1.6% vs expected -1.0%, the takeaway from the report is that inflation trends could be in a topping phase, which is constructive in terms of market’s belief that the Fed is keen to take a more conservative path with future rate hikes.
• ECB Main Refinancing Rate inline at 0.00%. On Thursday, Mario Draghi joined most of the world’s other big central bankers in halting crisis-era stimulus programmes, announcing that the ECB would call time on its own €2.6tn bond-buying scheme. Though the ECB remains poised to react again quickly if growth goes into a sustained period of weakness and wage and consumer price inflation start to head downwards again. The central bank  gave itself the flexibility by announcing it would reinvest fully bonds that come due to maintain the stock.
• In Brexit, May continues to face a monumental task of trying to pass her deal through Parliament, but with the vote now delayed until mid-January she has time to wring further concessions from EU. The whole Brexit deal now rests on the Irish backstop issue which essentially comes down to whether Northern Ireland will fall under EU rules in perpetuity or whether UK will be able to assert control over the territory sometime in the future. For the time being markets continue to bet that cooler heads will prevail and that the UK will remain within the customs union in 2019, but the chaos and turmoil of British politics have undermined investor confidence and traders remain wary.

STOCK MARKET WRAP 

• U.S. major indices finished mixed on Thursday, as ongoing uncertainty surrounding global issues kept many buyers on the sidelines.
• Procter & Gamble (PG 96.49, +2.46, +2.6%) was a standout in the consumer staples sector, and Dow, after being upgraded to ‘Buy’ from ‘Neutral’ at Bank of America/Merrill Lynch. Retail stocks were one of the hardest hit groups on Thursday, which helped drive the weakness in the consumer discretionary (-0.4%) sector. The SPDR S&P Retail ETF (XRT 42.52, -1.17) lost -2.7%. On a related note, Tailored Brands (TLRD 14.13, -6.01) and Oxford Industries (OXM 67.24, -7.57) dropped -29.8% and -10.1%, respectively, after some disappointing guidance/outlook.

 

PwC Partners With BitFury to Create Blockchain Accelerator in Russia
PricewaterhouseCoopers (PwC) has partnered with mining and blockchain software company Bitfury Group to create a blockchain accelerator for businesses in Russia. The consulting firm hasalready used Exonum — Bitfury’s open source framework for building blockchain applications for educational courses and seminars. The main goal of the new accelerator is to meet the “current needs” of the consulting giant’s enterprise clients in Russia. The company also believes that blockchain can “drastically” change the modern economy and cut personnel and infrastructure costs with the automation of business processes. With a revenue totalling over $41 billion for the 2018 fiscal year, PwC is currently the second largest among the Big Four professional services firms.

 

Hyperledger Onboards 12 New Members Including Alibaba Cloud, Deutsche Telekom and Citi
Hyperledger has onboarded 12 new members, including such major firms as Alibaba Cloud, Citi, and Deutsche Telekom. Launched in 2016, Hyperledger is an open source project created by the Linux Foundation and created to support the development of blockchain-based distributed ledgers. The latest general members that joined the initiative include Alibaba Cloud, a subsidiary of the e-commerce giant; financial services firm Citigroup, Deutsche Telekom, one of the largest telecoms providers in Europe; and European blockchain trading platform we.trade, among others. This month, the Hyperledger Technical Steering Committee approved the Ursa project, a modular cryptography software library. Ursa is meant to avoid wasted work on duplicate projects, enhancing security by simplifying analysis and making it “less likely for less experienced people to create their own less secure implementations.”

Opera Releases ‘Web 3-Ready’ Android Browser With Ethereum, DApp Support
Opera has launched its “Web 3-ready” browser for Android, with crypto wallet integration, support for Ethereum (ETH) and interactions with decentralized applications (DApps). Hamel explained Opera’s choice to support Ethereum and the Ethereum Web3 API as being based on the perception that the protocol “has the largest community of developers building Dapps” and significant “momentum behind it.” “Web 3.0” is a term that was initially coined to refer to the ambition for the development of a semantic internet, and is used to refer to the evolution of a more intelligent, open and distributed internet, which could involve the use of blockchain, decentralized computing and cryptocurrencies. Opera first announced it would be integrating a built-in crypto wallet for its desktop browser in early August, after launching a mobile crypto wallet as part of its beta Opera for Android in July. In September, the firm released an interoperable “Labs” beta version for Android with integrated wallet, Web 3.0 and DApp functionality.

 

As of Wed, Dec 12, 08:00 GMT (UTC +08:00)

USDJPY, -0.10%, $113.28.
EURUSD, +0.50%, $1.1373.
GBPUSD, +1.11%, $1.2624.
USDCAD, -0.30%, $1.3350.

S&P500, +0.54%, 2,651.07
Nasdaq, +0.95%, 7,098.31
Nikkei Futures, +2.64%, 21,687.5

CURRENCY MARKET WRAP 

• U.S. CPI m/m inline at 0.0%. Core CPI m/m inline at 0.2%. Japanese PPI y/y at 2.3% vs expected 2.4%. Consumer inflation trends are not running away from the Fed’s longer-run target, which should feed into the market’s growing belief that the Fed has some data-based scope to take it easy after a December rate hike.
• Italian PM Conte presented EU’s Juncker a revised 2019 budget plan with a target deficit of 2.04%. The Italian government and the commission have been at loggerheads over Rome’s spending plans, leading to the EU threatening to fine the country for “a particularly serious case of non-compliance” with EU fiscal rules.
• In Brexit, Prime Minister Theresa May won a “no confidence” vote from her own Conservative Party with respect to her leadership. The vote came amid the heightened uncertainty surrounding the UK’s Brexit plan. In a statement made shortly after the vote, May acknowledged that although she won, a significant number of her party colleagues had cast ballots against her leadership.

STOCK MARKET WRAP 

• The S&P 500 rose 0.54% on Wednesday, although it gave up a good chunk of its gains in the afternoon after trading as high as 1.9% intraday. Optimism that trade relations between the U.S. and China were progressing fuelled the rally effort, but selling would accelerate into the close, leaving the benchmark index at its session low. Trump initiated the optimism when he told Reuters he would get involved in the Department of Justice case against Huawei CFO Meng Wanzhou if it would serve national security interests and help advance trade negotiations with China. U.S. Secretary of Commerce Wilbur Ross later softened the President’s language, though, clarifying he hasn’t actually decided if he would intervene. Also, news thatChina is reportedly looking to tweak its “Made in China 2025” policy to allow more access and fairer competition for foreign companies helped lift sentiment.
• Notable laggards included Dow components Exxon Mobil (XOM 76.02, -0.66, -0.9%) and Verizon(VZ 57.25, -1.60, -2.7%). Exxon fell as oil prices rolled over, and Verizon was downgraded to ‘Equal-Weight’ from ‘Overweight’ at Morgan Stanley. Under Armour (UAA 19.81, -2.31, -10.4%) also stood out as the worst-performing stock in the S&P 500 after the company provided a disappointing revenue growth outlook for its core North American market between 2020 and 2022 at its Investor Day.

 

Developers Test Cross-Blockchain Protocol for One-Way ERC20-Bitcoin LN Atomic Swaps

An R&D lab at crypto startup TenX has tested the use of its cross-blockchain interoperability protocol to transfer ERC20 tokens for Bitcoin (BTC) using the Lightning Network (LN). The technical challenge was to exchange ERC-20 tokens which run on the Ethereum (ETH) platform but are not strictly “native” since they rely on invoking a smart contract to transfer ownership for Bitcoin’s smallest transactable unit, known as “Satoshi,” using the second-layer scalability LN protocol. The ERC20 transfer function uses msg.sender for authentication. However, calling transfer from a contract deployment sets msg.sender to the address of the yet to be deployed contract which doesn’t have tokens. CoBlox states it is still “looking at ways” to resolve the limited directionality issue, and has therefore not included the results of its proof-of-concept (PoC) for ERC20 tokens as part of the open-source release of its COMIT network.

China: Shenzhen Special Economic Zone to Use Blockchain for Electronic Tax Invoices

Shenzhen, a major city in the Guangdong Province and the first economic special zone in China, will allegedly use blockchain technology for electronic tax invoices. According to the director of the Information Center of Shenzhen Taxation Bureau, a blockchain electronic invoice is different from a traditional electronic invoice, as it has “the advantages of ‘distributed’ storage, traceability and non-tamperability.” The application of the blockchain electronic invoice to the WeChat payment platform is a substantial exploration made by the Shenzhen Tax Department based on the actual needs of the taxpayers to further optimize the business environment. WeChat, the 1 billion user social media platform operated by Tencent, has opened its payment platform for the blockchain invoice function.

Canadian City of Calgary Launches Local Digital Currency for Intracity Transactions

Calgary, a city in the Canadian province of Alberta, has launched its own digital currency. The Calgary Dollar will allow holders to pay for services and goods at local shops. the Calgary dollar was initially launched in 1996, with citizens and businesses offering goods and services in exchange for the local currency alongside the Canadian dollar. This new move in 2018 allows citizens to download an app and store the digital currency on their devices. The officials expect that the Calgary dollar could support small businesses and nonprofits by keeping funds within the city. Calgary dollars work through a smartphone app that lists shops and restaurants that participate in the program. One way to obtain the currency is by posting ads for goods and services that users want to sell in the app or on project’s website for Calgary dollars, receiving a small amount of the digital currency in exchange for posting the ad. Calgary is reportedly the first city in Canada to launch its own coin.

 

NOTABLE MOVES 

As of Tue, Dec 11, 08:00 GMT (UTC +08:00)

USDJPY, +0.04%, $113.38.
EURUSD, -0.30%, $1.1322.
GBPUSD, -0.55%, $1.2492.
USDCAD, -0.12%, $1.3379.
AUDUSD, +0.32%, $0.7213.

S&P500, -0.04%, 2,636.78
Nasdaq, +0.16%, 7,031.83
Nikkei Futures, +0.75%, 21,297.5

CURRENCY MARKET WRAP 

• U.S. PPI m/m at 0.1% vs expected 0.0%. Core PPI m/m at 0.3% vs expected 0.1%. The key takeaway from the report is that it didn’t inflame inflation concerns to an alarming degree, like the October report did, so market participants have not been bothered by the idea that it will drive the Fed to be overly aggressive with future rate hikes.
• German ZEW Economic Sentiment at -17.5 vs expected -25.0. In the Union, Italy’s Finance Minister Tria said that the government isn’t planning major changes to the budget, ahead of a meeting between EU’s Juncker and Italy’s PM Conte later today. Also, French President Macron is facing a non-confidence vote from left-wing opposition after riots took over Paris.
• In London trading, Sterling was boosted by some comments from Irish Deputy Prime Minister Simon Coveney, who said that there is potential for a new statement from the EU on the Irish backstop, although clarifying it’s not going to change. Later in the day, news that Germany’s Merkel rejected UK’s May attempt to renegotiate the Brexit deal and renewed speculation that MPs have sent 48 letters for a non-confidence vote on PM May, took Sterling down on the day. Data held little interest for the market as all eyes remain on the Brexit negotiations. U.K. Average Earnings Index 3m/y at 3.3% vs expected 3.0%. Unemployment Rate inline at 4.1%.
• Aussie HPI q/q inline at -1.5%. News that US and Chinese negotiators had some productive discussions on trade, kicked things off in Asia with AUDUSD popping above the 0.7200 figure on hopes that some sort of deal could be worked out over the next several months.

STOCK MARKET WRAP 

• Stocks jumped in early morning trading amid news that high-ranking officials from the U.S. and China resumed trade discussions over the phone. The progress stirred up some optimism that the controversial arrest of Huawei Technologies CFO, Meng Wanzhou, would not impede trade negotiations as was previously feared. The S&P 500 finished flat on Tuesday, squandering two intraday rally efforts, as headline volatility surrounding politics and trade contributed to another day of whipsaw trading action. The benchmark S&P 500 index traded as high as 1.4% shortly after the start of trading, but surrendered the entirety of that gain and was down as much as -0.6% in the afternoon.  It mounted a late recovery charge, trading up as much as 0.8%, but then rolled over in the last 30 minutes. The Wall Street Journal reported that China verbally agreed to reduce U.S. import auto tariffs to 15% from 40%, which followed a Bloomberg article from the morning that said China had submitted a proposal to reduce the tariffs. General Motors (GM 34.69, +0.27, +0.8%) and Ford Motor (F 8.54, +0.02, +0.2%) reacted favorably to the news.

NOTABLE MOVES 

As of Mon, Dec 10, 08:00 GMT (UTC +08:00)

USDJPY, +0.60%, $113.19.
EURUSD, -0.39%, $1.1356.
GBPUSD, -1.25%, $1.2560.
USDCAD, +0.52, $1.3398.
NZDUSD, +0.44%, $0.6874.

S&P500, +0.18%, 2,637.72
Nasdaq, +0.74%, 7,020.52
Nikkei Futures, -2.12%, 21,219.50  

CURRENCY MARKET WRAP 

• U.S. JOLTS Job Openings at 7.08M vs expected 7.22M. The 2-yr yield added two basis points to 2.72%, and the 10-yr yield added one basis point to 2.86%. The U.S. Dollar Index climbed 0.7% to 97.20, benefiting largely at the expense of Sterling, which dropped -1.25% against the Dollar as news of the delayed vote on the UK-EU Brexit plan stirred angst about the future of leadership in the UK and the specter of a messy “no deal” Brexit.
• In Europe, the continuing protests in France are beginning to worry investors, as the continent’s second-largest economy is in danger of seeing a sharp slowdown in activity as a result of the unrest over the past few weeks. What started out as a protest against carbon taxes has morphed into a general protest movement that threatens the political status of Emmanuel Macron. Macron tried to reassert control over a nation wrecked by increasingly violent protests with offers of tax relief for struggling workers and pensioners, and an exceptional admission on Monday that “I might have hurt people with my words.” Even as Macron broke his silence on the protests in a brief televised address, yellow-vested demonstrators vowed to keep up the pressure on a man they see as arrogant, out-of-touch and “president of the rich.” IMF head Christine Lagarde noted over the weekend that she was certain that the protests would have an economic impact.
• U.K. GDP m/m inline at 0.10%. Manufacturing Production m/m at -0.9% vs expected 0.0%. In Brexit, it wasn’t surprising news since it had been speculated before the open that PM May was likely going to announce today a delay in the vote. It was also reported that the vote would have likely been defeated had it been held on Tuesday. Nevertheless, the announcement crystallized the uncertainty surrounding the Brexit matter, which left it akin to pouring fuel on a fire of uncertainty among a host of other issues that have been weighing on investor sentiment and stock prices.

STOCK MARKET WRAP 

• The S&P 500 gained 0.18% on Monday in what was yet another volatile day of trading on Wall Street. The benchmark index overcame a loss of -1.9% intraday despite the uncertainty surrounding trade, growth prospects, the path of interest rates, and geopolitics. The major indices fell to session lows shortly after UK Prime Minster Theresa May announced she will be delaying the vote in Parliament originally scheduled for Tuesday on the UK-EU Brexit plan.Monday’s decline also extended the financial sector’s position as the worst-performing group this month with a loss of -8.4%.
• Notable laggards included Wells Fargo (WFC 48.80, -1.46, -2.9%) and Bank of America (BAC 24.76, -0.67, -2.6%). Within the S&P 500, the information technology (+1.4%) and communication services (+0.7%) outperformed to help lift the broader market from its early struggles. Semiconductor stocks helped lead the tech sector rebound effort.  The Philadelphia Semiconductor Index climbed 1.4% with Broadcom (AVGO 239.25, +10.69, +4.5%) extending its post-earnings gains from Friday.  Facebook (FB 141.85, +4.43, +3.2%), meanwhile, carried the communication services sector following an announcement after Friday’s close that it will be boosting its share buyback authorization by $9 billion.

NOTABLE MOVES 

As of Wed, Dec 06, 08:00 GMT (UTC +08:00)

USDJPY, +0.20%, 113.01
EURUSD, +0.04%, 1.1349
GBPUSD, +0.04%,1.2725
USDCAD, +0.77%, 1.3363
NZDUSD, -0.53%, 0.6892

S&P500 CLOSED
Nasdaq CLOSED
Nikkei Futures, -0.53%, 21,919.33

CURRENCY MARKET WRAP 

• US business optimism has fallen in recent weeks amid uncertainty over tariff disputes, rising interest rates and continued labor shortages, the Federal Reserve said Wednesday. The Federal Reserve’s latest Beige Book showed most districts’ economies expanded, though at least four signalled growth cooled. The impact of President Donald Trump’s punitive import tariffs has become more widespread, with cost increases felt by manufacturers, retailers and restaurants, restraining demand. Even so, most regions of the US showed modest or moderate growth, and there were continued reports of companies increasing wages and benefits to attract and retain qualified workers, the report said.
• The US 10-year bond yield fell to its lowest point since mid-September. A string of comments from the Chinese authorities, however, lifted market sentiment in the early morning Asian trading session. The comments indicated that the trade meeting at the G20 meeting was ‘very successful’, that China will implement specific items agreed upon as soon as possible and that the US and China will proactively push forward negotiations within the 90-day time frame. The Chinese currency strengthened the most since 2005 after the weekend’s trade discussion, but weakened somewhat overnight.
• GBP Markit/CIPS UK Services PMI NOV AT 50.4 vs expected 52.2. This was the worst reading in 15 months with business optimism weakest since June 2016. “A sharp deterioration in service sector growth leaves the economy flatlining in November as Brexit concerns intensified… suggest that the pace of economic growth has stalled…November saw the worst performance since February 2013… The surveys are so far consistent with 0.1% GDP growth in the fourth quarter, thanks to the expansion seen back in October, but growth momentum has since been lost and risks are clearly tilted to the downside”, noted by economist at IHS Markit, which compiles the survey.
• Early yesterday, the European Court of Justice ruled that the UK can unilaterally revoke the Article 50 notification (which started the Brexit clock), as long as it has parliamentary backing (given the notification itself required approval in the House of Commons). In the House of Commons, PM Theresa May lost three votes. With more power given to the House of Commons, it will be closely watched if May’s deal falls through on Tuesday, which seems very likely at this point. Theresa May is planning a final attempt to win over Tory opponents of her Brexit deal by raising the prospect of Parliament being able to veto her controversial Irish backstop plan before it comes into operation.
• The Bank of Canada (BoC) held its benchmark interest rate steady at +1.75% as it warned that low prices for oil from the western province of Alberta could affect the pace of future rate increases. Though it was expected for the central bank to leave interest rates unchanged, what caught everyone off guard was their comment that there may be more room for non-inflationary growth. Back in October when they raised interest rates, the monetary policy statement was adjusted to suggest more aggressive tightening in 2019 but they took on a more cautious tone today in recognition of slower growth momentum in Q4. The decline in oil prices is becoming a bigger problem for the central bank because it not only impacts trade but also inflation and overall growth. The BoC admitted today that the energy sector may be materially weaker than they had previously thought. Governor Stephen Poloz will deliver a speech in Toronto Thursday (08:35 EST), which will likely provide more clues on the central bank’s outlook.

STOCK MARKET WRAP 

• US markets were closed to mark former President George H.W. Bush’s death, but the effect of Wall Street’s turmoil in the previous session, when New York-listed shares tumbled more than 3 per cent, was felt in Asia and Europe.

NOTABLE MOVES 

USDJPY, -0.04%, 113.44
EURUSD, -0.04%, 1.1366
GBPUSD, +0.13%, 1.2781
USDCAD, -1.01%, 1.318
NZDUSD, +0.86%, 0.6922

S&P500, +1.10%, 2790.37
Nasdaq, +1.52%, 7440.92
Nikkei, +1.00%, 22574.76

CURRENCY MARKET WRAP 

• USD ISM Manufacturing PMI at 59.3 vs expected 57.5. A section of the U.S. Treasuries yield curve just inverted for the first time in more than a decade. The spread between 3- and 5-year yields fell to negative 0.6 basis points Monday, dropping below zero for the first time since 2007. The move is seen to be the first signal that the market is putting the Federal Reserve on notice that the end of its tightening cycle is approaching.
• Markets in Asia were buoyed by the trade agreement between the US and China at last weekend’s G20 meeting. Currencies and equities gapped higher as investors who feared the worst found the outcome satisfactory. However, aside from the initial move at the open, there was no continuation or additional gains during the North American session for stocks, the U.S. dollar or high beta currencies, as investors were not impressed by the “deal.” CNY Caixin Manufacturing PMI at 50.2 vs expected 50.1.
• The U.S. national day of mourning for President George H.W. Bush on Wednesday will delay the release of several economic data. ADP said it will delay by one day its snapshot on how many new jobs were created in November. The Institute for Supply Management and IHS Markit will do the same for their surveys of U.S. service-oriented companies. The federal government, for its part, will also push back its latest update on third-quarter productivity. Fed Chair Powell’s congressional testimony to Congress will be rescheduled. This was a highly anticipated meeting because investors are eager to see if Powell clarifies his comments about interest rates last week.
• Euro ended the day higher versus the US dollar after some headlines suggested that Italy could scale back their deficit plans.
• On Brexit, early buying dissipated in cable with the pair dropping towards 1.2750 after trading as high as 1.2825. UK PMI Manufacturing reported stronger than expected data at 53.1 vs expected 51.6 but traders ignored the news as Brexit woes continued to dog the pair on reports that as many as one-third of PM May’s party may vote against her deal on December 11.
• The G20 meeting also provided relief for the oil price, as Russia and Saudi Arabia agreed to extend into 2019 their deal to manage the oil market, known as OPEC+, although Moscow and Riyadh have yet to confirm any fresh output cuts. The announcement opens the door for a deal at the OPEC meeting on Thursday, 6 December. The Kiwi and CAD also traded higher with the loonie rising on the back of the 4.4% recovery in oil prices.
• In other news, an angry President Trump on Monday called for his ex-personal lawyer Michael Cohen to receive a stiff prison sentence for his admitted crimes, as he accused Cohen of making up “stories to get a GREAT & ALREADY reduced deal for himself.” Trump in a Twitter tirade also accused special counsel Robert Mueller of seeking “lies” from witnesses about Trump — and praised his longtime associate Roger Stone as having the “guts” to withstand pressure from Mueller’s prosecutors to “make up stories” about the president. Trump’s latest rants came three days after lawyers for Cohen asked a judge in a court filing to give him no prison time when he is sentenced Dec. 12 in U.S. District Court in Manhattan for charges brought by Mueller and other federal prosecutors.

STOCK MARKET WRAP 

• Stocks rallied after the U.S. and China declared a truce in their trade war. Stocks in Asia saw healthy gains, notably Chinese equities. The benchmark S&P 500 Index jumped more than 1%, building on gains posted during the biggest weekly increase in almost seven years, after leaders of the two countries agreed to hold off on new tariffs and intensify trade talks. The United States expects China to take immediate action to cut tariffs on U.S. car imports and end intellectual property theft and forced technology transfers as the two countries move toward a broader trade deal, a White House official said on Monday.
• Amazon briefly became the most valuable company on Wall Street in intraday trade on Monday, days after Microsoft dethroned long-time leader Apple, ending the iPhone maker’s five-year run at the top. However, Amazon’s lead lasted only a few seconds. At the close, Apple was back on top with a 3.49 percent increase in its stock that put its total value at $877 billion. It was followed by Amazon, up 4.86 percent with a market capitalization of $866.6 billion, and then Microsoft, up 1.08 percent and a stock market value of $860.4 billion. The tight race between the trio of high-powered technology stocks coincided with a broad stock market rally after the United States and China agreed on a temporary truce in their ongoing trade dispute.