As of Fri, Feb 1, 08:00 Singapore Time zone UTC+8
USDJPY, -0.18%, $108.83
EURUSD, -0.27%, $1.1447
GBPUSD, -0.05%, $1.3110
USDCAD, -0.15%, $1.3129
AUDUSD, +0.33%, $0.7271
NZDUSD, +0.30%, $0.6915
S&P500, +0.86%, 2,704.12
Nasdaq, +1.37%, 7,281.74
Nikkei Futures, +0.76%, 20,767.0
CURRENCY MARKET WRAP
- The Employment Cost Index showed compensation costs for civilian workers increased 0.7% (consensus +0.8%), seasonally adjusted, in the fourth quarter, down from 0.8% in the third quarter. Wages and salaries, which comprise about 70% of compensation costs, increased 0.6%, while benefit costs jumped 0.7%. The key takeaway from the report is that it showed an acceleration in the growth of wages and salaries for civilian workers, which increased 3.1% for the 12 months ending in December 2018, versus 2.5% for the 12-month period ending in December 2017.
- The Treasury market seems to be pricing in a softer economic outlook, which has been reflected in the sharp drop in yields following Wednesday’s FOMC decision and Fed Chair Powell’s press conference. After which, both the 2-yr yield and the 10-yr yield decreased four basis points Wednesday, the 2-yr yield fell seven basis points to 2.46% today while the 10-yr yield fell six basis points to 2.64%. The U.S. Dollar Index increased 0.2% to 95.57.
- The Euro did poke through the key 1.1500 level, but the rally stalled and reversed after horrid German Retail Sales data which saw a decline of -2.1% YoY vs a consensus expectation of 1.5% YoY gain. This was the sharpest monthly drop since 2007 and a clear warning that the German consumer is tightening the purse strings even as the overall labor markets are at multi-year lows in unemployment.
STOCK MARKET WRAP
- The S&P 500 gained 0.86% on Thursday, as another batch of better-than-feared earnings added to the optimism surrounding U.S.-China trade relations and a dovish-minded Fed. The Dow Jones Industrial Average, however, lost -0.1% due in large part to negative price action in Microsoft (MSFT 104.43, -1.95, -1.8%), Visa (V 135.01, -2.59, -1.9%), and DowDuPont (DWDP 53.81, -5.47, -9.2%) following their earnings reports. The S&P 500 communication services sector was easily the best-performing group on Thursday, rising 3.7% on the strength of Facebook (FB 166.69, +16.27, +10.8%) and Charter Communications (CHTR 331.05, +41.14, +14.2%). The utilities (+2.1%) and consumer staples (+1.8%) sectors also outperformed the broader market.
- General Electric (GE 10.16, +1.06) was another headline stock, climbing 11.7%, after the company beat revenue expectations and pleased investors with a $4.9 billion free cash flow figure and a lower-than-expected $1.5 billion settlement with the Department of Justice.
BLOCKCHAIN & CRYPTOCURRENCY NEWS
South Korea-based fintech firm BxB Inc. has launched the first supposed stablecoin backed by the Korean won. There was an initial beta soft launch of the coin on Airswap, a decentralized exchange platform, before the tokens were released on the global and Korean exchange. The coin, KRWb, is reportedly the first stablecoin produced in South Korea to be backed by the national currency, the won. The coin is purportedly supported with the won at a 1:1 ratio. BxB Inc purportedly managed the mining and burning of KWRb in order to better assure liquidity via an Ethereum-based smart contract process using a multi-signature checkpoint and a third party auditor. The initial deposit of 400 million won ($360,000) was collateralized to the equivalent value of KRWb tokens. The funds were generated by BxB Inc, as well as investment from Singapore-based BxB Capital PTE Ltd. KRW will reportedly be available globally to any user to an ERC-20 compatible service. Users do not need access to the won in order to transact with the KRWb. BxB Inc. is reported to be in ongoing discussions with South Korean and global exchanges, including plans to announce additional listings during Q1 2019. The KRWb is live on three exchanges.
Danish state-owned energy company Energinet has expanded its partnership with distributed ledger network Iota to investigate use of its technology in new areas. Energinet, which is an independent enterprise under Denmark’s Climate and Energy Ministry, wants to examine how it could leverage Iota’s Tangle technology in the energy and Internet of Things (IoT) markets. The two entities have worked together on a data marketplace initiative since late 2017, a larger project involving other companies. Iota’s product offering is specifically geared to IoT, and Energinet looks to create new solutions based on IoT for emerging phenomena, such as green energy and electric vehicles. This collaboration will include services applicable to Energy and adjacent areas such as smart cities, smart buildings and mobility. This week, Japanese IT giant Fujitsu announced it had completed a trial of blockchain technology with a Japanese energy supplier aimed at improving shared electricity structures.
Wrapped Bitcoin (WBTC), an Ethereum (ETH)-based token backed by Bitcoin (BTC), has launched today, Jan. 31, according to a press release on the network’s website. The currency is a joint initiative by blockchain security firm BitGo, Kyber Network liquidity protocol and others. BitGo announced the development of the coin backed 1:1 with Bitcoin in October 2018. A statement by the firm then said that Wrapped Bitcoin will provide users with a “wide variety of new decentralized use cases including on decentralized exchanges (DEXs), as collateral for stablecoins or lending, for payments and flexible smart contracts within the Ethereum ecosystem.” WBTC is an ERC-20 token, which are tokens designed and used solely on the Ethereum platform that make the streamline the creation of new tokens. ERC-20 tokens provide a sort of template by which developers can build a new token, sparing them from coding a new crypto from the ground up. Wrapped Bitcoin will purportedly allow for new applications and use cases for Bitcoin on the Ethereum network. All WBTC smart contracts have been audited by third-party firms and the proof of reserve is showing an exact 1:1 ratio of minted WBTC to BTC is observable on-chain.