NOTABLE MOVES  

As of Sat, Feb 23, Singapore Time zone UTC+8

USDJPY, +0.00%, $110.69
EURUSD, +0.07%, $1.1343
GBPUSD, +0.02%, $1.3054
USDCAD, -0.78%, $1.3129
AUDUSD, +0.49%, $0.7129
NZDUSD, +0.65%, $0.6845

S&P500, +0.64%, 2,792.67
Nasdaq, +0.79%, 7,090.63
Nikkei Futures, -0.19%, 21,400.0

CURRENCY MARKET WRAP  

• There were no prints out of the U.S. on Friday. Risk-Assets were positive as Trade talks yield progress. Investors received several updates from U.S-China trade talks in Washington: (1) The two sides made an agreement on currency, but no specifics were provided; (2) China reportedly committed to purchase $1.2 trillion in U.S. goods; and (3) Trump said he will work out the final points on trade with China’s President Xi most likely in March. Although he also downplayed expectations by saying that they “perhaps could work out the final deal and perhaps not,” they are closer to an agreement than before. Trump even talked about a short term memorandum of understanding (MOU).
• Remarks from Fed officials on Friday provided little surprises and were not market-moving. The Fed speakers maintained a dovish-minded stance on the central bank’s monetary policy and balance sheet normalization efforts.
• U.S. Treasuries closed on a higher note, pushing yields lower across the curve. The 2-yr yield decreased five basis points to 2.48%, and the 10-yr yield decreased three basis points to 2.66%. The U.S. Dollar Index declined -0.1% to 96.55. WTI crude rose 0.5% to $57.25/bbl.

STOCK MARKET WRAP 

• The S&P 500 gained 0.64% on Friday in a broad-based rally while U.S.-China trade talks showed signs of progress. Nine of the 11 S&P 500 sectors finished higher with information technology (+1.3%), communication services (+1.1%), and health care (+0.9%) leading the advance. Conversely, the financials (-0.2%) and consumer staples (-0.3%) sectors finished in the red.
• Kraft Heinz (KHC 34.95, -13.23) made headlines, plunging -27.5%, after the company missed earnings expectations, slashed its dividend, and announced that it has received a subpoena from the SEC, inquiring about the company’s accounting practices.

BLOCKCHAIN & CRYPTOCURRENCY NEWS

Crypto Hedge Fund Pantera Capital Seals $130 Million for Third Crypto Venture Fund

Crypto hedge fund Pantera Capital has already sealed $130 million out of a $175 million target for its third crypto venture fund. For Pantera’s debut fund in 2013, the firm had raised $13 million, rising to $25 million for its second. Reportedly, Pantera raised the game for its third offering, saying at the time that the $175 million target was “a function of how fast the space is moving, the talent coming in, the opportunities, and the sizing of rounds.” Pantera executives have previously disclosed that $100 million from 140 investors had already raised by mid-August 2018, according to a CNBC report at the time. The fund reportedly has a decade-long investment period, and offers investors equity in a blockchain company in return for their capital. Pantera has also been developing nontraditional venture funds for crypto investors, such as an investment strategy with input from machine learning and a hedge fund that focuses on initial coin offerings (ICO).

Korea Exchange Official: US Decision on Bitcoin ETF Will Set Tone for Local Crypto Market

An official at South Korea’s sole securities exchange operator, the Korea Exchange (KRX), says the bourse is closely eyeing developments from United States regulators in regard to Bitcoin (BTC) exchange-traded funds (ETFs). The official, reportedly speaking on condition of anonymity, was cited by local English-language daily The Korea Herald on Feb. 20. ETFs are securities that track a basket of assets proportionately represented in the fund’s shares. They are seen by some as a potential development that would herald the widespread adoption of crypto as a regulated and passive investment instrument. The U.S. Securities and Exchange Commission (SEC) has to date either rejected or postponed its decision on a wide range of proposed crypto-related ETFs. the KRX official reported that KRX is extensively discussing the provision of a solid Bitcoin index, which would be “required for the launch of such ETFs when commercialized and integrated into the market because it would eventually concern investor protection issues.”

Texas Cryptocurrency Businesses Agree to Halt Token Offerings After Cease and Desist

Texas’ state securities regulator announced it had reached an agreement with four cryptocurrency companies it accused of selling unregistered securities. The result of a nine-month process, Mintage Mining, BC Holdings and Investments, Social Membership Network Holding, Nui Social and manager Darren Olayan agreed to refrain from offering cryptocurrency tokens to investors. As respondents listed in the order, the entities will also pay an administrative fine of $25,000. The latest order confirms the findings, and requires no further activity to take place until suitable licensing and documentation are collected. The order was signed by all the named respondents. The move constitutes the most recent victory for the SSB in its ongoing clampdown on unregistered securities sales by the emerging cryptocurrency sector.

• The U.S. and China began working on six memorandums of understanding on structural issues that would outline the path to a trade deal, according to Reuters. Specific details on talks have been sparse, though, with China’s Ministry of Commerce spokesperson saying that there was nothing new to report. The market’s nonchalant disposition despite the reported progress possibly suggested the market’s patience for hopeful-sounding headlines may be wearing thin, especially when taking into account the number of rallies that took place amid upbeat headlines, but little concrete progress.
• U.S. Treasuries finished on a lower note, pushing yields higher across the curve. The 2-yr yield and the 10-yr yield increased three basis points each to 2.53% and 2.69%, respectively. The U.S. Dollar Index increased 0.2% to 96.62. WTI crude declined -0.3% to $57.00/bbl.
• The movers in the FX market yesterday was the sharp reversal (from .7169 – .7207) and big declines (high of .7207 to low of .7071) in the Aussie. At first, Aussie was positively surprised by the labor market data that showed solid hiring at the start of the year. More than 39K (consensus 15.2k) jobs were created in January with full time work rising by the strongest amount in nearly 2 years. The unemployment rate held at a 7 year low of 5% (consensus 5%). However shortly thereafter, Westpac said the Reserve Bank could cut interest rates twice this year. They felt that a lower growth profile and higher unemployment rate will require a response by the RBA in August and November. What really killed the rally in Aussie was China’s decision to ban imports of Australian coal into their northern port of Dalian. Not only is this a big hit (2% of all Australian coal imports are destined for Dalian) for the industry but China is also getting tough on Australia after they banned Huawei from their 5G network last year. 

• The S&P 500 lost -0.35% on Thursday, as disappointing economic data helped simmer the market’s lengthy rally.
• The S&P 500 energy (-1.6%), health care (-0.9%), and communication services (-0.6%) sectors underperformed the broader market. Conversely, the utilities (+0.8%) and consumer staples (+0.3%) sectors showed relative strength.The stock market began the day slightly lower as weaker-than-expected economic data tempered buying interest. U.S. business investment declined for the second consecutive month in December, and the eurozone manufacturing sector experienced its first contraction since 2013.
• Nike (NKE 83.95, -0.89, -1.1%) was under pressure following some on-the-court drama. College basketball sensation Zion Williamson sustained an injury when his Nike sneakers broke apart during a highly-anticipated game. Nike issued a statement that they were working to identify the issue.
• Tesla (TSLA 291.23, -11.33) for its part lost 3.7% after Consumer Reports dropped its Model 3 recommendation due to the car’s reliability issues. On a related note, Tesla has been under scrutiny for its untimely handling of returns and refunds.

BLOCKCHAIN & CRYPTOCURRENCY UPDATES

Japanese Banking Giant Mizuho to Launch Its Yen-Pegged Stablecoin in March

Japan’s banking giant Mizuho Financial Group will launch its bespoke stablecoin for payments and remittance services on March 1. In a partnership with around 60 counterpart financial institutions — which together reportedly host 56 million user accounts — Mizuho’s new “J-Coin” digital currency platform will reportedly directly link existing bank accounts with digital wallets. The currency will reportedly be managed by a dedicated mobile app, dubbed J-Coin Pay, using QR codes at checkout to complete retail payments. According to Nikkei, the currency will be a digital stablecoin fixed at a price of 1 yen (~$0.01) per unit, and transfers between bank accounts and J-Coin wallets are set to be zero-fee. According to Nikkei, prospective J-Coin wallet users will not be required to undergo credit checks and the service will be open to users below the age of 18. J-Coin wallets will also serve a more flexible range of payments and remittance services than traditional bank accounts. Mizuho Financial Group reported over $1.8 trillion in total assets as of Dec. 31, 2018.

Mark Zuckerberg Considers Blockchain Authorization of Data in Recent Interview

Facebook CEO and founder Mark Zuckerberg considered the ramifications of blockchain-based authorization of user data during an interview with Harvard Law professor Jonathan Zittrain. During a discussion covering such topics as the future of technology and society, Zuckerberg noted that he “think[s] about the work we [Facebook] are a decentralizing force in the world.” Zuckerberg mentioned that he was considering a potential blockchain use case by which users could have control over their data, adding “Basically, you take your information, you store it on some decentralized system and you have the choice to log into places without going through an intermediary.” He said that one example of how the company is moving toward a more decentralized structure is through offering encryption in its messaging services. Zuckerberg outlined the benefits of encryption like privacy and security.

ConsenSys Backs Ethereum-Based Unlisted Infrastructure Investment Startup Allinfra

Ethereum (ETH) blockchain-focused development company ConsenSys has invested in an infrastructure investment startup, Allinfra. Allinfra will rely in part on ConsenSys’ technological capabilities and expertise in the tokenized assets area. The exact amount of the investment has not been disclosed. Allinfra facilitates direct investments in unlisted infrastructure assets via the Ethereum blockchain, providing users with the ability to create, purchase and transfer economic or ownership interests in these assets. As per ConsenSys, the solution makes the sector available not only to large institutional investors, but to a broader audience of investors. “In the case of unlisted infrastructure, a traditionally restricted, and illiquid asset class, Allinfra will enable a wider audience to efficiently access and participate in the economic benefits of these assets”  said Joe Lubin, Ethereum co-creator and ConsenSys founder. Dave Sandor, Co-founder and CEO of Allinfra, revealed that within several months the company “will be in the market supporting a flagship infrastructure tokenization project.”

• The main takeaway from the FOMC Minutes was that the Fed is going to be patient in raising rates and is likely to stop reducing the assets on its balance sheet later this year. The surprise – or maybe the important revelation – for the market to consider was the implication that the Fed could turn away from a “patient” mindset with raising interest rates if market uncertainty abates.
• Separately, there was little news on the current U.S-China trade talks, but investors did get an update on trade negotiations with the EU. Trump expressed his displeasure with talks, telling reporters that if the U.S. cannot make a deal with EU, the White House will impose auto tariffs.
• U.S. Treasuries were little changed during Wednesday’s session. The 2-yr yield and the 10-yr yield finished flat at 2.50% and 2.65%, respectively. The U.S. Dollar Index was unchanged at 96.55. WTI crude rose 1.2% to $57.15/bbl.

• S&P 500 increased 0.18% on Wednesday, as the minutes from the Fed’s January meeting came in mostly in-line with expectations. Price action, overall, was kept in check with earnings reports driving the notable movers in the stock market.
• The S&P 500 materials (+1.7%), financials (+0.6%), and industrials (+0.5%) sectors outperformed the broader market. Conversely, the real estate (-0.7%), health care (-0.1%), consumer staples (-0.1%), and communication services (-0.1%) sectors finished in the red.
• The minutes, along with the EU trade update, contributed to some volatility that yielded modest losses for the major averages. Investors regrouped, however, lifting the averages back into the green to extend the stock market’s lengthy rally.Semiconductor stocks outperformed, driven in part by an upbeat earnings report from Analog Devices (ADI 106.82, +2.60, +2.5%). Their outperformance helped keep the Philadelphia Semiconductor Index (+0.9%) rally going and provided some support for the information technology sector (unch). On the other hand, CVS Health (CVS 64.22, -5.66, -8.1%) and Southwest Airlines (LUV 54.41, -3.26, -5.7%) disappointed investors with some downside guidance. Specifically, CVS guided earnings for Q1 and fiscal 2019 below estimates, and Southwest Airlines cut its first quarter unit revenue guidance to 3-4% growth, year-over-year, from 4-5% growth.
• The outsized loss from CVS weighed on the health care sector (-0.1%). Airline stocks also underperformed on concern other carriers could follow suit with unit revenue revisions of their own.

BLOCKCHAIN & CRYPTOCURRENCY NEWS

Spain’s Largest Telecom Company Seeks Entrepreneurs in Blockchain, AI

Spain’s largest multinational telecommunications company, Telefónica, has announced an initiative to support entrepreneurs in innovative technologies, such as blockchain and artificial intelligence (AI). The Madrid-based company, also one of the largest telephone operators and mobile network providers in the world has launched its first “Open Innovation” call of this year via its tech incubator subsidiary, Telefónica Open Future. The month-long initiative seeks to support startups and innovative projects ready to “revolutionize traditional ecosystems through new technologies,” such as blockchain, AI, virtual reality and big data. Telefónica Open Future is a global platform that aims to connect public and private institutions focused on innovation and entrepreneurship. The call for entrepreneurs will be open until March 20 and the selected startups will be promoted and supported by the Global Open Future network and Telefónica, underlines the press release.

US: Crypto Advocacy Group Encourages Financial Regulators to Foster Innovation

United States blockchain advocacy group the Chamber of Digital Commerce has encouraged two major financial regulators to foster blockchain innovation. The group has reportedly provided comments to the Commodity Futures Trading Commission (CFTC) and the Consumer Financial Protection Bureau (CFPB) in different proceedings this week. Generally, the Chamber has asked both agencies to permit the introduction of new financial products based on blockchain technologies and to collaborate on efficient approaches that would promote investment and industry growth. In a separate letter to the CFTC, the group expressed support for the Commission’s previously launched initiative, dubbed LabCFTC, which examines fintech innovations. Also, the Chamber endorsed the CFTC’s commitment to learn more about the Ethereum (ETH) network, as well as the possibility to elaborate a framework for the introduction of ETH derivatives.

Binance Launches Decentralized Crypto Exchange Testnet

Major cryptocurrency exchange Binance has launched the testnet of its new decentralized exchange, Binance DEX. Per Binance, the exchange, powered by Binance Chain — a new blockchain and peer-to-peer (p2p) distributed system is already available for customers. Users can create wallets and start exchanging tokens on the Binance DEX testnet. Binance DEX will reportedly support secure decentralized software and hardware wallets. Binance’s Trust Wallet will also be integrated with Binance DEX, along with the Ledger Nano S. According to the press release, more compatible wallets will purportedly be added soon. Binance Coin (BNB) — which is currently an ERC20 token — will be moved to the Binance Chain in order to become a native asset. BNB is currently up over 12 percent over the past 24 hours, trading at $10.80 and ranked 10th largest coin by market cap by press time.

• New York Fed President Williams (FOMC voter) said mixed economic data has been a strong argument for a pause for further rate hikes, although he added that he expects to be drawing down the balance sheet for some time. Cleveland Fed President Mester (non-FOMC voter) for her part reportedly said she favors slowing the Fed’s balance sheet normalization effort, but said the fed funds rate may need to move a bit higher than current levels if the economy evolves as she expects. The market took the good and ignored the bad, which is all it has done so far in 2019.
• U.S. and China resumed trade negotiations in Washington. Trump said he believes China is intent on working quickly toward a deal to avoid a tariff hike on March 2. Trump reiterated a possible extension to the trade deadline, telling reporters that the March 1 deadline was “not a magical date.”
• U.S. Treasuries saw continued buying interest, driving yields lower across the curve. The 2-yr yield and 10-yr yield decreased two basis points each to 2.50% and 2.65%, respectively. The U.S. Dollar Index declined -0.4% to 96.52 amid strength in the euro. WTI crude rose 1.6% to $56.45/bbl.
• The best performing currency today was Sterling, which jumped more than 1% ahead of today’s meeting between May and Juncker. Although the European Commission continues to say they will not accept a time limit to the backstop, investors remain hopeful that a deal will be reached or an extension will be requested before the March 29th deadline. Juncker expects the talks to be friendly but the EU has been firm on denying changes to the withdrawal agreement and its wishful thinking to assume he will budge today. The EU’s strategy from day 1 is to run down the clock and force the government to accept the current deal or hold a second referendum.

• The S&P 500 increased 0.15% on Tuesday, as strong earnings results from Wal-Mart (WMT 102.20, +2.21, +2.2%) helped ease some concerns about consumer spending. Investors also remained optimistic about U.S.-China trade talks and a market-friendly Fed.
• Nine of the 11 S&P 500 sectors finished higher with materials (+0.6%), utilities (+0.5%), consumer staples (+0.5%), and consumer discretionary (+0.5%) outperforming. Conversely, the health care (-0.3%) and industrial (-0.1%) sectors were the lone groups to finish in the red.
• Wal-Mart’s earnings report was definitely good news for investors. An earnings beat and healthy same-store sales growth from the Dow component helped spur gains in the consumer staples (+0.5%) and consumer discretionary (+0.5%) sectors. Its strong earnings report helped temper concerns about a slowdown in consumer spending that were fueled by the lousy Retail Sales report for December released last week. The SPDR S&P Retail ETF (XRT 45.58, +0.24) increased 0.5%.

BLOCKCHAIN & CRYPTOCURRENCY WRAP

Waste Management Firm Launches Blockchain Platform in UAE City

A blockchain-enabled waste permit portal will be launched in Sharjah, the United Arab Emirates (UAE). The blockchain-based waste permit portal will be jointly developed by environmental, recycling and waste management company Bee’ah and the Hamriyah Free Zone Authority (HFZA) — the city of Sharjah’s free trade zone. T he platform is the first in the city to employ blockchain technology to validate, process and store transactions. The platform will cut costs for customers applying for permits within HFZA as well as reduce permit-issuing time from several days to only a few hours. Khaled Al Huraimel, CEO of Bee’ah, said that he expects the technology “will not only facilitate seamless operations, but also increase trust between customers and operators.”

Japan: E-Commerce Giant Rakuten’s New Payment App Appears to Support Crypto

Japanese e-commerce firm Rakuten announced that a major update of its Rakuten Pay mobile app will be released on March 18, according to the firm’s 2018 earnings release. The app’s new structure appears to indicate that it will support cryptocurrency payments in addition to fiat. Rakuten — known informally as “Japan’s Amazon” includes the firm’s cryptocurrency exchange “Everybody’s Bitcoin” as part of a newly established payments subsidiary, Rakuten Payment. Though the app update does not explicitly note crypto support, the company’s specification that “all payment solutions” will be supported on the platform implies support for crypto payments as a part of its subsidiary, Rakuten Payment. Rakuten acquired Japanese crypto exchange Everybody’s Bitcoin in August 2018 in a $2.4 million deal. In its earnings release, Rakuten reported a net income for 2018 of about 141.9 billion yen (about $1.3 billion), a 28.4 percent year-over-year increase from 2017.

Japan’s Number Two Bank by Assets Completes R3 Blockchain-Based Trade Finance Trial

Japan’s second-largest bank by assets, Sumitomo Mitsui Banking Corporation (SMBC), has completed a proof-of-concept (PoC) using blockchain consortium R3’s Marco Polo trade finance platform. SMBC, which is the only Japanese bank participating in Marco Polo, said it had partnered with Japanese multinational Mitsui & Co. to enhance efficiency in trade processes. “[The] PoC was conducted between SMBC and Mitsui & Co. which aims to improve productivity in its trade operations, by testing modules such as Receivable Finance and Payment Commitment (Payment Undertaking).” Launched in 2017, Marco Polo is a joint venture between R3 and Irish tech firm TradeIX targeting trade finance utility using distributed ledger technology. Leveraging R3’s Corda technology, a total of 15 consortium member banks are currently participating in the Marco Polo consortium, including ING, NatWest and BNP Paribas.

• 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.

 NOTABLE MOVES

As of Sat, Feb 16, Singapore Time zone UTC+8

USDJPY, +0.01%, $110.50
EURUSD, -0.05%, $1.1295
GBPUSD, +0.65%, $1.2896
USDCAD, -0.41%, $1.3241
AUDUSD, +0.57%, $0.7146
NZDUSD, +0.42%, $0.6866

S&P500, +1.09%, 2,775.60
Nasdaq, +0.61%, 7,472.41
Nikkei Futures, -1.37%, 20,900.0    

CURRENCY MARKET WRAP  

• The University of Michigan’s preliminary index of consumer sentiment for February increased to 95.5 (consensus 93.3) from the final reading of 91.2 for January, as attitudes improved with the end of the partial government shutdown and the Fed hitting the pause button on its interest rate hikes.The key takeaway from the report is the indication that consumers’ long-term inflation expectations fell to the lowest level recorded in the past half century, which is a vantage point that is certain to register in the Fed’s willingness to be patient with its policy approach.
• A week-long round of trade negotiations in Beijing came to a conclusion on Friday, although structural issues – forced technology transfers, enforcement oversight, and China subsidizing domestic industries – were unresolved. Still, investors were pleased to hear that mid-level talks are expected to continue in Washington next week. Trump expressed optimism, saying talks are going extremely well, while he continued to weigh the possibility of extending the March 1 deadline. Trump signed a bipartisan funding resolution, which included funding that was well short of the $5.7 billion requested for border security. As many thought he might, Trump declared a national emergency, setting up a likely legal battle, to secure adequate funding from other departments to build a border wall.
• U.S. Treasuries edged lower, pushing yields slightly higher. The 2-yr yield increased two basis points to 2.52%, and the 10-yr yield increased one basis point to 2.67%. The U.S. Dollar Index decreased -0.1% to 96.90. WTI crude rose 2.0% to $55.56/bbl

STOCK MARKET WRAP 

• The S&P 500 gained 1.09% on Friday, as investors were relieved to hear that U.S.-China trade-talks produced some progress and that Congress passed a funding resolution to avoid another government shutdown. Friday’s advance increased the benchmark index’s weekly gain to 2.5%.
• All 11 S&P 500 sectors finished higher, led by gains in financials (+2.0%), energy (+1.6%), and health care (+1.5%). Conversely, the utilities (+0.3%) and communication services (+0.4%) sectors underperformed but still finished with modest gains.
• Shares of Newell Brands (NWL 17.16, -4.53, -20.9%) and Mattel (MAT 13.82, -3.09, -18.3%) were clobbered on Friday following disappointing guidance, both of which included weak fiscal 2019 guidance.

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.

Grayscale Q4 2018 Report: Institutional Investors Provide 66% of Capital Inflow

Digital asset management fund Grayscale Investments latest crypto investment report released on Feb. 14 reveals that capital inflow from institutional investors is on the rise. For Q4 2018, Grayscale reports that institutions accounted for the majority of investments — at 66 percent. As well, investors were almost exclusively based in the United States (99 percent), although full year statistics indicate a more distributed geography, with 33 percent offshore investors to 67 percent U.S.-based. Grayscale notes that the protracted bear market has drawn clients whose perspective is long term: the high percentage of retirement accounts (40 percent) points to a multi-year investment horizon. Moreover, while dollar investments in crypto declined in Q4, Grayscale contends that institutional investors’ percentage allocation of their portfolio into the crypto sector remained roughly consistent throughout 2018. Overall, the fund notes there has been a deceleration of new inflows into crypto products quarter-over-quarter in 2018: nonetheless, with Q4 investments at $30.1 million, Grayscale products hit a value of $359.5 million for the entire year — nearly twice the inflows of the previous four years (2014-17) combined.

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.