NOTABLE MOVES  

• U.S. CPI m/m inline at 0.3%. Core CPI m/m inline at 0.2%. Japanese Prelim GDP q/q inline at -0.3%. USDJPY down -0.22%, $113.56. The 2-yr yield lost two basis points to 2.86%, and the 10-yr yield lost three basis points to 3.12%.
• Italy stuck to its 2019 budget with a 2.4% deficit target and a growth forecast of 1.5%. The EU Commission is expected to give an update on Italy next Wednesday, Nov 21st. German Prelim GDP q/q at -0.2% vs expected -0.1%. Euro up 0.19%, $1.1312.
• In Brexit news, UK Prime Minister Theresa May announced that her cabinet has approved the draft withdrawal agreement, but that draft is still subject to British Parliament and EU approval. The 585-page draft withdrawal agreement has now been published, alongside a shorter statement setting out what the UK and EU’s future relations will look like. U.K. CPI y/y at 2.4% vs expected 2.5%. PPI Input m/m at 0.8% vs expected 0.6%. Sterling up 0.08%, $1.2984.
• Chinese Fixed Asset Investment ytd/y at 5.7% vs expected 5.5%. Industrial Production y/y at 5.9% vs expected 5.8%. Aussie Wage Price Index q/q inline at 0.6%. Aussie up 0.21%, $0.7233.
• Aussie Wage Price Index q/q inline at 0.6%. Aussie popped in early Asian session on the back of strong numbers. Employment Change at 32.8K vs expected 19.9K. Unemployment Rate at 5.0% vs expected 5.1%. Aussie up 0.21%, $0.7233.
• S&P 500 down -0.76%, 2,701.58. Nasdaq down -0.89%, 6,769.87. Nikkei up 0.16%, 21,846.48.
• Stocks rallied at the open after the October CPI reading showed consumer prices rose 0.3% as expected last month, but soon fell back amid continued Apple (AAPL 186.80, -5.43) weakness and following a regulatory reminder from Congresswoman Maxine Waters. Waters, who is set to take over the House Financial Services Committee this January, vowed that the days of weakening regulations will be coming to an end. Waters’ comments should not be seen as a surprise though, as it was understood this would likely be the case following the midterm election results. Apple dropped -2.8%, extending its monthly losses to -14.7%, after being downgraded to ‘Neutral’ from ‘Buy’ at Guggenheim on Thursday.
• Chip stocks, however, extended Tuesday’s rebound, pushing the Philadelphia Semiconductor Index higher by 0.4%. In earnings, Macy’s (M 33.22, -2.57) fell -7.2% despite beating profit estimates and raising its earnings guidance for its fiscal 2019 year. Cannabis stocks Canopy Growth (CGC 34.30, -4.18, -10.9%) and Tilray (TLRY 102.34, -9.21, -8.3%) also dropped after reporting. Canopy missed revenue estimates, while Tilray beat earnings estimates but its revenue was at the low end of its upside pre-announcement.

BLOCKCHAIN & CRYPTOCURRENCY NEWS  

NOTABLE MOVES  

• U.S. Unemployment Claims in line at 214K. In its statement, the FOMC said it expects further gradual rate hikes that are consistent with sustained economic growth, strong labor market conditions, and inflation near its symmetric 2% target over the medium term. The Fed’s statement didn’t derail expectations for another rate hike in December, which would be the fourth hike in 2018. Consequently, the yield on the Fed-sensitive 2-yr Treasury note jumped four basis points to 2.97%, its highest level since June 2008. Also, the benchmark 10-yr yield added two basis points to 3.23%. USDJPY up 0.38%, $113.96.
• German Trade Balance at 17.6B vs expected 18.2B. Euro down -0.51%, $1.1368. The EU convenes on November 23rd to discuss Britain’s exit from the European Union and according to a times political report, an agreement could be made as early as next week. Sterling down -0.46%, $1.3066.
• S&P 500 down -0.25%, 2,806.83. Nasdaq down -0.62%, 7,158.59. Nikkei up 1.82%, 22,486.92.
• The market retreated on Thursday, on the heels of FOMC’s decision as the expectations for yet another hike in December remains intact. The benchmark index traded slightly below its flat line leading up to the Committee’s statement release, and sharply dropped to session lows before recouping some losses. In the latest batch of Q3 earnings reports, lower guidance overshadowed better-than-expected profits for many names. For instance, Perrigo (PRGO 62.88, -12.26, -16.3%), Qualcomm (QCOM 58.05, -5.16, -8.2%), Wynn Resorts (WYNN 99.02, -14.97, -13.1%), Square (SQ 75.23, -7.46, -9.0%), and D.R. Horton (DHI 34.22, -3.37, -9.0%) all beat earnings estimates but barred significant losses after lowering profit or revenue guidance below consensus.

BLOCKCHAIN & CRYPTOCURRENCY NEWS  

Japan’s Shinsei Bank, Nippon Wealth Form Business Alliance with Blockchain Startup ConsenSys
Japan’s Shinsei Bank has signed a Memorandum of Understanding (MoU) with blockchain startup ConsenSys to widen its exploration of the technology’s applications for finance. The MoU entails a business alliance between Shinsei Bank, Hong Kong-based restricted license bank Nippon Wealth, Singaporean private equity fund Tribay Capital, and ConsenSys. The alliance between the four entities will focus on exploring the use of ConsenSys’ decentralized applications (DApps) to develop new financial products and services, with Nippon Wealth spearheading a study of blockchain infrastructure and protocols for the banking sector. The alliance means that Tribay Capital will become a new shareholder of Nippon, with Shinsei Bank nonetheless remaining its majority shareholder, retaining 50 percent of shareholder rights.

BBVA Puts $150 Million Syndicated Loan on Ethereum Blockchain
Spanish banking giant BBVA has completed a pilot that put a syndicated loan for $150 million on the blockchain.Tthe bank arranged the loan for Red Electrica, Spain’s national electrical grid operator with co-lenders Japan’s Mitsubishi UFJ Financial Group and France’s BNP Paribas. In a traditional syndicated loan process, banks rely on faxes to share complex information, which not only delays the process, but is also expensive. Blockchain is seen as a means to help banks exchange information at near real-time, reducing the loan process from a couple of weeks to a day or two. Cutting out manual processes also slashes operational costs. The BBVA planes to conduct more blockchain pilots for syndicated loans in the future. The bank has explored blockchain tech in the past, as well.

Huobi Opens Office in Russia, Plans Startup Accelerator and Mining Hotels
Huobi Global Senior Director Edward Chen and Andrei Grachev, head of the Russian office, announced the launch date during the Blockchain Life conference in Saint Petersburg this week. The branch will provide 24-hour online support and maintain a call center with Russian-speaking account managers. Huobi, which is currently the third-largest cryptocurrency exchange by daily trading volume, plans to establish an accelerator for blockchain projects. Huobi’s office will also launch an educational program that will focus on cryptocurrency and distributed ledger technologies. The exchange will cooperate with leading Russian universities and other organizations on the initiative. Students will be trained in the specifics of digital asset management and taught about the automated and algorithmic trading services offered by Huobi. The Singapore-based company also intends to participate in the development of so-called mining hotels in Russia. The news about the Russian office comes after Huobi’s recent announcement of plans to expand its operations into new cryptocurrency markets around the world, including Africa, South Asia and the Middle East.

• U.S. Total outstanding consumer credit increased by $11.0 billion in September after increasing an upwardly revised $22.8 billion (from $20.1 billion) in August. The report reflects a deceleration in credit expansion that could contribute to concerns about the U.S. economy hitting/nearing peak growth. U.S. Treasuries finished roughly flat with the 10-yr yield unchanged at 3.21%. Japanese Average Cash Earnings y/y at 1.1% vs expected 1.2%. The G7 currencies had a subdued showing in light of the midterm elections. USDJPY up 0.11%, $113.57.
• German Industrial Production m/m at 0.2% vs expected 0.0%. Euro up 0.05%, $1.1433. Brexit-related headlines kept coming, but the Irish border issue remains unsolved.  Sterling up 0.22%, $1.3127.
• Canadian Ivey PMI at 61.8 vs expected 50.9. WTI crude lost 0.9% to settle at $61.65/bbl, extending its recent decline to nearly 20.0% from its four-year high last month. The Energy Information Administration reported a weekly crude inventory build of 5.8 million barrels last week, marking the seventh consecutive week of stockpile builds. USDCAD down -0.05%, $1.3117.
• RBNZ kept the official cash rate at 1.75% (expected). The central bank expects to keep it at this level into 2020. “No. We are not taking a rate cut off the table,” Orr cited. “I think it would be pointless to do that, to remove an option. What we are saying is we are very data dependent, data-driven around how our projections unfold. The risks to the downside remain,” he said. Despite Orr’s comments, the market is now sees a 54% chance of a rate hike in March 2020 versus 28% prior to today’s statement. N.Z Inflation Expectations q/q at 2.0%. The FX market did not react much to RBNZ as Kiwi was already up 0.62% on the day, at 0.6780 (mainly due to yesterday’s strong employment numbers)
• S&P 500 up 2.12%, 2,813.89. Nasdaq up 3.07%, 7,203.13. Nikkei down -0.28%, 22,085.80.
• Wednesday’s stock market advance follows the conclusion of U.S. congressional midterm elections that produced a split Congress. The prevailing assumption in the market was that a newly divided Congress would preserve market-friendly policies, namely the tax cut and deregulation efforts. Trump also mentioned on Wednesday bipartisan efforts to work with the Democrats in the House on infrastructure, trade, and lowering drug costs. Health care companies rose with the belief that a split Congress would also make it unlikely that it will fully repeal the Affordable Care Act. On a related note, heavily-weighted health care component Humana (HUM 353.98, +22.17) jumped 6.7% after it reported above-consensus earnings and raised its guidance. Apple (AAPL 209.95, +6.18, +3.0%), Microsoft (MSFT 111.96, +4.24, +3.9%), Visa (V 144.78, +3.99, +2.8%), and MasterCard (MA 208.24, +9.09, +4.6%) all provided the sector a much-needed lift.
• Within the consumer discretionary group, Amazon (AMZN 1755.49, +112.68) carried the sector with an impressive gain of 6.9%. Amazon announced Wednesday it has launched Amazon Music for Mexico. Additionally, Amazon announced Alexa’s launch for Mexico. Beginning in mid-November when Echo devices ship, customers will be introduced to new voice features in Spanish with Alexa.
• Of note, pot stocks surged after Attorney General Jeff Sessions resigned his post effective immediately per Trump’s request.  Sessions was an influential critic of legalizing marijuana and served as roadblock to advance the national conversation. Well-known cannabis companies Tilray (TLRY 139.60, +32.74) and Canopy Growth (CGC 46.07, +3.48) rose 30.6% and 8.2%, respectively. Cannabis stocks were already on the rise after several more states voted to legalize recreational or medical marijuana. Michigan became the 10th state to legalize its recreational use, and Utah and Missouri passed initiatives to join 31 other states that already legalize its medical use.

Notable Moves

• U.S. JOLTS Job Openings at 7.01M vs expected 7.09M. Japanese Household Spending y/y at -1.6% vs expected 1.6%. U.S. Treasury yields inched higher with the 2-yr yield adding two basis points to 2.92% and the 10-yr yield increasing one basis point to 3.21%. In midterm elections, results will not be made clear until the early hours (EST), most polls show the Democrats regaining control of the House, while Republicans are expected to retain majority control of the Senate. USDJPY up 0.13%, $113.34.
• German Final Services PMI at 54.7 vs expected 53.6. E.U. Final Services PMI at 53.7 vs expected 53.3. Euro up 0.30%, $1.1441. In Brexit, the Times reported that the Union is preparing to offer an “independent mechanism” which allows Britain to end a temporary customs arrangement with the bloc. While not a final solution, it will be enough to break the stalemate in negotiations, and grant a deal split by March next year. Sterling up 0.55%, $1.3114.
• RBA shrugs off falling house prices, weak inflation to keep rates on hold at 1.5% (expected). On the flip side of weak inflation and falling house prices, the jobs market remains strong with the unemployment rate falling to 5%, the lowest level since early 2012, and the economy is growing in line with the RBA’s forecasts. The RBA retained an upbeat stance in its post decision statement noting: “Forecasts for economic growth in 2018 and 2019 have been revised up a little.” Aussie up 0.44%, $0.7243.
• N.Z. Employment Change q/q at 1.1% vs expected 0.5%. Unemployment Rate at 3.9% vs expected 4.5%. The fall was completely unexpected by economists, who had generally been forecasting a figure of about 4.5% and inevitably there will be questions as to whether this is a ‘rogue’ result, though Stats NZ has immediately defended the veracity of the data, saying they are “confident” of the result and by stating that large changes in the rate – both up and down – have occurred before, while labour market figures tend to lag other economic indicators. The number was particularly impressive because the participation rate rose 0.2% QoQ to 71.1 percent in the September quarter. Kiwi up 1.17%, $0.6740..
• S&P 500 up 0.63%, 2,755.45. Nasdaq up 0.75%, 6,988.85. Nikkei up 1.14%, 22,147.75.
• In earnings, results were mostly positive with CVS (CVS 77.90, +4.21) climbing 5.7% after it reported above-consensus profits. Eli Lilly (LLY 105.90, -4.24) also beat earnings estimates but lost -3.9%, while Booking Holdings (BKNG 1949.46, +78.34) gained 4.2% despite missing earnings estimates. Booking’s results were above its prior guidance, though. Health care company Mylan N.V. (MYL 36.43, +5.06) after it surged 16.1% after it reported better-than-expected earnings.
• WTI crude dropped -1.5% to settle at $62.19/bbl after Trump granted temporary waivers on Monday to eight countries that import oil from Iran. The decision fueled an already weakening oil market that has seen crude prices decline nearly -20.0% from its recent four-year high in October. Despite the drop in crude, the oil-sensitive energy sector ticked higher by 0.3%, although it was down as much as -0.8% intraday.

BLOCKCHAIN & CRYPTOCURRENCY NEWS

After ‘Negligible’ Mining-Related Sales, AMD Launches 8 New ‘Blockchain Compute Solutions’

AMD, a California-based semiconductor manufacturer, has partnered with seven major tech companies to produce eight new cryptocurrency mining rigs. the firm has partnered with Sapphire, ASROCK, ASUS, MSI, Biostar, TUL and Rajintek to issue eight different rigs boasting “Ultimate stability,” “24/7 performance” and “Enterprise-level quality.” The price for the equipment has not yet been specified at press time. According to AMD’s notice, partnership will bring new blockchain compute solutions to the market, designed to meet the various aspirations of “innovative blockchain platforms.” The move comes just a week after AMD released its third quarter 2018 financial report, where the company stated that the “blockchain-related GPU sales in the third quarter were negligible.

Deloitte Partners With Startup for Gov’t-Level Blockchain Identity Management

“Big Four” accounting firm Deloitte has partnered with identity management company Attest Inc. to develop a blockchain-based digital identity system. The collaboration will purportedly develop a digital identity offering for government-compliant identifiers that can be used by Deloitte’s clients based on Attest’s existing products. The first product, Attest Wallet, is a cryptographically secured identity storage like a cryptocurrency wallet and it will reportedly enable users to store digital versions of government and business IDs in one place and control access to stored information. The second solution is called Attest Enterprise and comprises two application programming interfaces (APIs), which allow users to verify their identity, authorize third parties and provide consent to others to manage their data on their behalf.

Thai Revenue Department to Track Tax Payments Using Blockchain

The Thai Revenue Department has revealed its plans to track tax payments using blockchain and maсhine learning and the blockchain will be used to verify the validity of taxes paid and to speed up the tax refund process. Machine learning, in its turn, will help reveal tax fraud and create more transparency. Ekniti Nitithanprapas, the Revenue Department’s director-general who has also been International Economic Advisor of Fiscal Policy Office for the country’s Ministry of Finance since 2015, did not reveal when exactly the Department’s experiment with blockchain was going to start or which particular solutions it would use. Allegedly, blockchain feasibility studies would refer to processing digital IDs, IP registration management, and security, along with smart contracts.

NOTABLE MOVES  

• U.S. Average Hourly Earnings m/m inline at 0.2%. Non-Farm Employment Change at 250K vs expected 194K. Unemployment Rate inline at 3.7%.The strong jobs report validated labor market trends that will keep the Fed on a tightening path. The CME FedWatch Tool indicated a 80.7% chance of another Fed rate hike in December, up from a 74.5% chance the previous day.  The Fed-sensitive 2-yr yield and benchmark 10-yr yield spiked seven basis points each to 2.91% and 3.21%. USDJPY up 0.43%, $113.20.
• German Final Manufacturing PMI at 52.2 vs expected 52.3. E.U. Final Manufacturing PMI at 52.0 vs expected 52.1. Euro down -0.19%, $1.1387. U.K. Construction PMI at 53.2 vs expected 52.0. Sterling down -0.29%, $1.2973.
• Canadian Employment Change at 11.2K vs expected 12.7K. Unemployment Rate at 5.8% vs expected 5.9%. Trade Balance at -0.4B vs expected 0.2B. WTI crude extended its recent downward trend, losing 0.9% to $63.20/bbl and reaching its lowest level since April.USDCAD up 0.17%, $1.3109.
• Aussie Retail Sales m/m at 0.2% vs expected 0.3%. Aussie down -0.10%, $0.7199.
• S&P 500 down -0.63%, 2,723.06. Nasdaq down -1.47%, 6,965.29. Nikkei up 2.56%, 22,243.66.
• Stocks fell on Friday following conflicting U.S.-China trade reports and softer-than-expected sales guidance from Apple (AAPL 207.48, -14.74, -6.6%). Futures rallied overnight on a Bloomberg report indicating Trump asked his cabinet to draft a trade deal, but stocks eventually fell into negative territory after White House officials denied the report. Director of the United States National Economic Council Larry Kudlow confirmed in a CNBC interview that the cabinet was not asked by Trump to draw up a trade plan for China. Later, as stocks traded at session lows, Trump reiterated his belief to reporters that the U.S. will reach a trade deal with China. This led stocks to cut their losses in late afternoon trading.
• In earnings, Apple raised some red flags after forecasting weaker-than-expected sales for the holiday quarter and announcing it will no longer provide unit-sales data for the iPhone, iPad, and Mac moving forward. The company did beat both top and bottom line estimates, EPS of $2.91 vs. $2.78 expected and revenues of $62.9 billion vs $61.46 billion expected. Exxon Mobil (XOM 81.95, +1.28, +1.6%) and Chevron (CVX 114.73, +3.56, +3.2%) rose after both reported above-consensus earnings.

BLOCKCHAIN & CRYPTOCURRENCY NEWS  

Lawyer Invests $300 Million to Build Crypto City in the Nevada Desert
On Thursday, consumer protection lawyer Jeffrey Berns revealed plans to build a crypto city in the desert, claiming to have invested $300 million. He is the owner and CEO of Blockchains LLC, a company that bought more than 67,000 acres of land in northern Nevada for $170 million earlier this year. The comlex is meant to be a model for running a smart city with a decentralized blockchain infrastructure powering all interactions. The planned city will include residential units for thousands of people to live in, alongside shops for commerce. The area will also host an esports arena and a studio for creating music, movies and games. The company has also signed a Memorandum of Understanding with Nevada’s electricity public utility, NV Energy, agreeing to work together on energy projects powered by blockchain technology.

Israeli Projects Raised Over $600 Million via ICOs as of Q3 2018
According to report by cryptocurrency analytics firm One Alpha released Nov. 2., Israel-based projects have raised over $600 million through Initial Coin Offerings (ICOs) as of the third quarter (Q3) of 2018. Per the research, 140 blockchain-focused companies in Israel have attracted $1.3 billion in investment, wherein more than 60 percent of companies and 88 percent of funds are ICO-related. From Q1– Q3 2018, Israeli startups raised $606 million through ICOs, wherein the largest number of ICOs took place during Q2, and Q1 was the most profitable, with $315 million raised through crypto-asset offerings. The largest ICOs in 2018 include EOS ($4.2 billion), Telegram ($1.7 billion), TaTaTu ($575 million), Dragon ($420 million), and tZero ($328 million). Per the report, ICOs constitute less than 10 percent of the global venture capital funding volume.

Lack of Diversity in Ethereum Smart Contracts Pose Risks to Whole Ecosystem
A lack of diversity of Ethereum (ETH) smart contracts poses a threat to Ethereum blockchain ecosystem, according to research by a group of analysts from Northeastern University and the University of Maryland released on Oct. 31. The paper, entitled “Analyzing Ethereum’s Contract Topology,” claims that most Ethereum smart contracts are “direct- or near-copies of other contracts,” which represents a potential risk if a copied smart contract contains a vulnerable or a buggy code. To date, Ethereum smart contracts are “three times more likely to be created by other contracts” than by users. Considering the low diversity of smart contracts on Ethereum as a potential risk to its whole blockchain ecosystem, the researchers mentioned that Ethereum has become a subject of “high-profile bugs” several times, resulting in over $170 million worth of cryptocurrency being frozen. Multiple implementations of “core contract functionality” on Ethereum would eventually provide “greater defense-in-depth to Ethereum.”

NOTABLE MOVES  

• U.S. ISM Manufacturing PMI at 57.7 vs expected 59.0, the pullback is most likely a natural slowing of activity following what has been an impressive acceleration in manufacturing activity on a national level. That point notwithstanding, the deceleration in what has been one of the hottest sectors will feed into the peak-growth narrative that has been prominent of late. U.S. Treasuries ticked higher on Thursday, pushing the 2-yr yield down four basis points to 2.84% and the 10-yr yield down two basis points to 3.14%. USDJPY down -0.19%, $112.72.
• There were no prints from the E.U., with French and Italian banks closed for holiday. Euro popped 0.80%, $1.1403. Bank of England unanimously voted to leave rates unchanged at 0.75% as expected on Thursday. Additionally, the central bank lowered its growth forecasts for 2018 and 2019 by 0.1% in each year to 1.3% and 1.7%, respectively. The bank that it would need to step up the pace of interest rate rises in the years ahead if Theresa May was able to negotiate a smooth Brexit deal. Announcing the verdict of the bank’s latest Monetary Policy Committee meeting, the BoE said rate rises would still be “gradual”, but indicated that it would need to raise rates to 1.5% over the next three years to keep inflation under control. Three months ago, it suggested only one quarter-point increase was necessary over the same period to stop the economy from overheating. Mark Carney said the bank’s central forecast was that the economy would run hotter, pushing inflation higher and “as a consequence, a margin of excess demand emerges”. U.K. Manufacturing PMI at 51.1 vs expected 53.0. Sterling rallied 1.86%, $1.3003.
• Dollar was broadly weak on Thursday, USDCAD down -0.49%, $1.3091. Aussie Trade Balance at 3.02B vs expected 1.71B. Aussie rallied 1.85%, $0.7205.
• S&P 500 up 1.06%, 2,740.37. Nasdaq up 1.47%, 7,069.17. Nikkei down -1.06%, 21,687.65.
• Favorable trade-related tweet by Trump lifted stocks from their early downtrend. The benchmark index briefly turned negative in the early going before comfortably trading in positive territory for most of the session. Trump tweeted that he had a “long and very good conversation” with President Xi, adding that discussions have been moving along nicely with meetings being scheduled at the upcoming G-20 summit in Argentina. According to a Reuters report, President Xi confirmed he spoke with Trump over the phone, expressing his willingness to meet with Trump at the G-20 summit, hopeful for a stable relationship with the U.S.
• Music streaming platform Spotify (SPOT 141.16, -8.53) lost -5.7% after it reported a Q3 operating loss above guidance. The company also slightly lowered its fourth quarter monthly active user (MAU) and premium subscriber guidance, which did not bode well for a stock trading in a very competitive space.

BLOCKCHAIN & CRYPTOCURRENCY NEWS  

NASDAQ Eyes Crypto Market Manipulation Use Case for Market Surveillance Tool
The world’s second-largest stock exchange NASDAQ says its market surveillance technology can “stamp out manipulation” in cryptocurrency markets. Regulators, brokers and exchanges have surveillance teams that monitor activity constantly and advanced technologies to help capture and analyze abusive behaviors including pump-and-dump schemes, insider trading, wash trading as well as spoofing and layering. The move comes as Bitcoin’s new-found stability temporarily takes emphasis off the idea that its markets were subject to foul play. NASDAQ saw the first cryptocurrency client for its SMARTS Market Surveillance solution come in April in the form of Gemini, the cryptocurrency exchange operated by the Winklevoss twins.

Hong Kong Regulator Announces New Plans for Cryptocurrency Industry
The Hong Kong Securities and Futures Commission (SFC) issued two circulars on Thursday concerning cryptocurrency regulations. The first outlines a new approach which aims to bring virtual asset portfolio managers and distributors of virtual asset funds under its regulatory net, and the second document addresses intermediaries that distribute crypto funds. The SFC will impose licensing conditions on firms which manage or intend to manage portfolios investing in virtual assets and it will explore whether crypto exchanges “are suitable for regulation in the SFC regulatory sandbox.”

Anypay Provides Bitcoin Cash Invoices That Can Be Paid by Sending a Text Message
On Oct. 29, a Bitcoin Cash proponent used the Cointext wallet to purchase a croissant by text message at La Maison Navarre, a bakery in Portsmouth, New Hampshire. The shop uses the free Anypay point-of-sale application, which connects to the Cointext system to allow people to make purchases by SMS. The Anypay.global payment processor, a free point-of-sale application for retail merchants, has integrated Cointext payments within its invoice platform. If a user chooses to pay for a product with bitcoin cash, they will be introduced to Anypay’s invoice system, which displays a written BCH address, a QR code, and the ability to pay by text using an SMS-based code. The Cointext wallet is a light client for mobile phones that allows users to send BCH over standard text messaging services without an internet connection.

• U.S. Employment Cost Index q/q at 0.8% vs expected 0.7%. Chicago PMI at 58.4 vs expected 60.1. ADP Non-Farm Employment Change at 227K vs expected 188K. Bank of Japan kept monetary policy steady on Wednesday at -0.10% (inline) and slightly trimmed its inflation forecasts as global trade frictions clouded the outlook, reinforcing views the central bank is in no rush to trim its massive stimulus. While ruling out a rate hike, Kuroda said the BOJ could take further steps to ease the strain on markets. The BOJ announced changes in its bond-buying operations, they will reduce the frequency of its bond buying operations in November and aim to have government bonds traded in the secondary market longer than they currently are. USDJPY down -0.20%, $112.86.
• E.U. CPI Flash Estimate y/y inline at 2.2%. Core CPI Flash Estimate y/y inline at 1.1%. Euro down -0.26%, $1.1315. In Brexit, Sterling got bid after Dominic Raab suggested he expects a deal on the UK’s exit from the EU to be agreed within three weeks. The Brexit secretary told a committee of MPs he was happy to appear before them to give evidence “when a deal is finalised” and “currently expected 21 November to be suitable”. Sterling up 0.47%, $1.2767.
• Chinese Manufacturing PMI at 50.2 vs expected 50.6. Non-Manufacturing PMI at 53.9 vs expected 54.7.
• Canadian GDP m/m at 0.1% vs expected 0.0%. WTI crude extended its recent decline, losing -1.3% to $65.31/bbl, reaching its lowest level since August. The U.S. Energy Information Administration reported a weekly crude oil inventory build of 3.2 million barrels, marking the sixth straight week inventories have risen. USDCAD up 0.40%, $1.3159.
• Aussie CPI q/q at 0.4% vs expected 0.5%. Trimmed Mean CPI q/q inline at 0.4%. Aussie down -0.32%, $0.7083.
• S&P 500 up 1.09%, 2,711.74. Nasdaq up 2.31%, 6,967.10. Nikkei up 2.16%, 21,920.46.
• Technology stocks were in control from the get-go, following Facebook (FB 151.79, +5.57, +3.8%) releasing its third quarter earnings report the previous evening. Alphabet (GOOG 1076.77, +40.56, +3.9%) and Netflix (NFLX 301.78, +15.97, +5.6%) joined Facebook with noteworthy gains on Wednesday, underpinning the strength in the communication services sector (+2.1%). Likewise, Apple (AAPL 218.86, +5.56, +2.6%) and Amazon (AMZN 1598.01, +67.59, +4.4%), respectively, provided strong support for the outperforming information technology (+2.4%) and consumer discretionary (+1.6%) sectors.
• JPMorgan Chase (JPM 109.02, +2.29) and Bank of America (BAC 27.50, +0.71) provided strong support with respective gains of 2.2% and 2.7%. Financials benefited from a slight steepening of the yield curve, with the 2-yr yield increasing four basis points to 2.88% and the 10-yr yield rising five basis points to 3.16%.
• In other earnings, General Motors (GM 36.59, +3.05, +9.1%), eBay (EBAY 29.03, +1.61, +5.9%), T-Mobile US (TMUS 68.55, +4.63, +7.2%), and Automatic Data (ADP 144.08, +6.82, +5.0%) all sported healthy gains after reporting better-than-expected results. On the other hand, Kellogg (K 65.48, -6.38) lost -8.9% after missing bottom line estimates and lowering its adjusted earnings outlook.

Binance Freezes Funds With Suspected Money Laundering Links From Controversial Exchange WEX
Troubled cryptocurrency exchange WEX.nz has seen its funds frozen by fellow exchange Binance after users claimed the exchange was involved in money laundering. According to CEO Changpeng Zhao, laundered funds would “soon” use decentralized exchanges to avoid freezes traditional platforms are able to instigate. BTC-e remains subject to a giant $4 billion fraud investigation by Greece and U.S., with alleged founder Alexander Vinnik still in custody following his arrest in July 2017. WEX soon began exhibiting suspicious traits once it began operating, with prices of Bitcoin significantly larger on its order book than global norms. At press time, BTC/USD on WEX.nz was quoted at $8,547 – 35 percent higher than the CoinMarketCap average.

Venezuela Begins Public Sale of National Cryptocurrency Petro
On Monday, the Venezuelan government announced that the public can now purchase the country’s national cryptocurrency directly from the Superintendency of Cryptoassets and Related Activities (Sunacrip). Sunacrip is in charge of regulating all crypto-related activities in Venezuela. Buyers can visit the Sunacrip headquarters to purchase the petro with cash. Purchasing with cryptocurrencies can also be done on the petro’s official website. The public sale of the petro was scheduled for Nov. 5. However, Venezuela’s Superintendent of Cryptoassets Joselit Ramirez explained that the launch was moved forward due to the fluidity with which events developed and the support of President Nicolás Maduro. On Thursday, Venezuela’s vice president of the economy, Tareck El Aissami unveiled two more petro options which will be enabled on the Sunacrip website on Nov. 5: Petro Pago (pay) and Petro Ahorro (savings).

Kenya’s Bithub Africa Mines Bitcoin Using Solar Power
Founded in 2015, Bithub.Africa is a commercial blockchain accelerator that is driving the adoption of blockchain technology and solutions across Africa. The company also focuses on building systems that facilitate access to financial services and energy through public blockchain projects and open protocols such as Bitcoin. Bithub Africa has started using off-grid solar power to mine bitcoin and Ethereum and has laid out a series of interconnected cables and devices at its small mining facility in Nairobi. An inverter connects to a battery, which is patched through to a controller that is linked to a 200-watt solar panel. The PV module is fixed to the roof at an angle to maximize solar capture. Bithub Africa also extracts litecoin and ethereum classic using conventional sources of electricity, with only minimum air-conditioning needed to keep the mining rigs from overheating in addition to its solar-powered cryptocurrency mining operations.

NOTABLE MOVES  

• U.S. CB Consumer Confidence at 137.9 vs expected 136.3. 2-yr and 10-yr Treasury notes added two basis points each to 2.84% and 3.11% respectively. USDJPY up 0.61%, $113.06.
• German Prelim CPI m/m at 0.2% vs expected 0.1%. E.U. Prelim Flash GDP q/q at 0.2% vs expected 0.4%. Adding to Euro woes, Italian GDP in Q3 showed no growth, with Italian Deputy PM Salvini stating that the GDP slowdown is another reason to press ahead with the budget expansion. Euro down -0.25%, $1.1345.
• Broad Dollar strength, political woes in the Union, and the absence of progress in Brexit negotiations all weighed on Sterling, with no fresh catalyst behind Tuesday’s slump. Sterling dropped -0.68%, $1.2706.
• Aussie Building Approvals m/m at 3.3% vs expected 3.9%. Aussie up 0.68%, $0.7104.
• S&P 500 up 1.57%, 2,682.63. Nasdaq up 1.43%, 6,810.12. Nikkei up 1.45%, 21,457.29.
• Tuesday’s price action in the S&P 500 oscillated with the volatility in large-cap technology stocks before finally taking a decisive swing upwards in the last hour of trading. The tech-heavy Nasdaq Composite, which had been down approximately -0.7% intraday, closed at its session high with a 1.43% gain.
• Philadelphia Semiconductor Index climbed 4.2%. Notable chipmaker NVDIA (NVDA 203.00, +17.38) jumped 9.4% after J.P. Morgan analyst Harlan Sur upgraded the stock to overweight from neutral. He thinks that investors are underestimating secular gaming trends, as more than 30 new titles are set to be released in the next two quarters and as e-sports continue to gain in popularity.
• Amazon (AMZN 1530.42, -8.46, -0.6%) was the only FANG member to post a loss. In earnings, Dow components Pfizer (PFE 42.89, -0.34, -0.8%) and Coca-Cola (KO 47.63, +1.17, +2.5%) both reported better-than-expected profits. Pfizer, however, lowered its revenue guidance, while Coca-Cola reaffirmed its guidance. Additionally, former Dow component General Electric (GE 10.18, -0.98) fell -8.8% to its lowest level in nearly a decade after missing top and bottom line expectations and cutting its quarterly dividend from $0.12 per share to $0.01 per share. Under Armour (UAA 23.23, +5.04) soared 27.7% following a better-than-expected earnings report. Facebook shares whipsawed in after-hours trading, following a mixed third-quarter earnings report Tuesday. Earnings per share (EPS): $1.76 vs $1.47 estimated. Revenue: $13.73 billion vs. $13.78 billion estimated. Facebook’s shares were down as much as -6% and up as much as 5% after hours as investors dissected Zuckerberg’s comments on future spending and growth. They finally settled in positive range, up about 3%, after the company’s earnings call concluded.

EARNINGS NEWS  

BLOCKCHAIN & CRYPTOCURRENCY NEWS  

U.K.’s Financial Regulator Mulls Ban on Sale of Crypto Derivatives
The U.K.’s Financial Conduct Authority (FCA) has said it will consider whether to ban the sale of cryptocurrency-based derivatives. The watchdog is reported to have said it will now launch a consultation in the first quarter of 2019 into whether or not to place a ban on their sale in future. The regulator’s remarks came the same day as a new report published by the Cryptoassets Taskforce – which includes representatives from the FCA, the U.K. Treasury and the Bank of England – emphasized that leveraged crypto-based derivatives were even riskier than spot market trading as they can amplify and “cause losses that go beyond the initial investment,” as well as imposing additional fees. The FCA reportedly plans to launch a parallel consultation into whether to extend its regulatory jurisdiction to crypto assets themselves, as well as to infrastructure providers such as exchanges and wallet services.

Bitcoin ‘Patient Zero’ Says BTC’s Current Stage is Like ‘1992 for The Internet’
Bitcoin “Patient Zero” Wences Casares, the founder of Bitcoin (BTC) wallet startup Xapo, said that the seminal cryptocurrency may take years to prove successful. Casares forecasted that it will take at least seven years to determine whether BTC is successful, and if it does, BTC will become a non-political global standard of value and settlement. Notably, the Bitcoin advocate said that it will not replace fiat currencies as “it does not make sense.” He added that the idea that a blockchain can “change the idea of an asset, that already derives its value from a central authority […] its really nonsensical and does not make any sense.” Regarding blockchain, Casares stated in January that there would eventually come about a single “robust” blockchain to move value globally. Per Casares, the future of crypto lies in the cooperation around a singular, robust blockchain, and in his opinion BTC is the most likely to be the blockchain of choice.

Bitcoin Is ‘Anything but Useful’ Says Ex-Federal Reserve Chair Janet Yellen
Bitcoin is “anything but” a useful store of value, former U.S. Federal Reserve chair Janet Yellen stated in a speech during an interview at the 2018 Canada FinTech Forum in Montreal.  Yellen – who rose to fame in the cryptocurrency community last year as the target of the now infamous ‘Buy Bitcoin’ session,  called Bitcoin a “highly speculative asset” and “not a stable source of value.” She also noted that the Fed was not “seriously considering” the concept of a state-issued digital currency at the time of her engagement.