As of Wed, Dec 12, 08:00 GMT (UTC +08:00)
USDJPY, -0.10%, $113.28.
EURUSD, +0.50%, $1.1373.
GBPUSD, +1.11%, $1.2624.
USDCAD, -0.30%, $1.3350.
S&P500, +0.54%, 2,651.07
Nasdaq, +0.95%, 7,098.31
Nikkei Futures, +2.64%, 21,687.5
CURRENCY MARKET WRAP
- U.S. CPI m/m inline at 0.0%. Core CPI m/m inline at 0.2%. Japanese PPI y/y at 2.3% vs expected 2.4%. Consumer inflation trends are not running away from the Fed’s longer-run target, which should feed into the market’s growing belief that the Fed has some data-based scope to take it easy after a December rate hike.
- Italian PM Conte presented EU’s Juncker a revised 2019 budget plan with a target deficit of 2.04%. The Italian government and the commission have been at loggerheads over Rome’s spending plans, leading to the EU threatening to fine the country for “a particularly serious case of non-compliance” with EU fiscal rules.
- In Brexit, Prime Minister Theresa May won a “no confidence” vote from her own Conservative Party with respect to her leadership. The vote came amid the heightened uncertainty surrounding the UK’s Brexit plan. In a statement made shortly after the vote, May acknowledged that although she won, a significant number of her party colleagues had cast ballots against her leadership.
STOCK MARKET WRAP
- The S&P 500 rose 0.54% on Wednesday, although it gave up a good chunk of its gains in the afternoon after trading as high as 1.9% intraday. Optimism that trade relations between the U.S. and China were progressing fuelled the rally effort, but selling would accelerate into the close, leaving the benchmark index at its session low. Trump initiated the optimism when he told Reuters he would get involved in the Department of Justice case against Huawei CFO Meng Wanzhou if it would serve national security interests and help advance trade negotiations with China. U.S. Secretary of Commerce Wilbur Ross later softened the President’s language, though, clarifying he hasn’t actually decided if he would intervene. Also, news thatChina is reportedly looking to tweak its “Made in China 2025” policy to allow more access and fairer competition for foreign companies helped lift sentiment.
- Notable laggards included Dow components Exxon Mobil (XOM 76.02, -0.66, -0.9%) and Verizon(VZ 57.25, -1.60, -2.7%). Exxon fell as oil prices rolled over, and Verizon was downgraded to ‘Equal-Weight’ from ‘Overweight’ at Morgan Stanley. Under Armour (UAA 19.81, -2.31, -10.4%) also stood out as the worst-performing stock in the S&P 500 after the company provided a disappointing revenue growth outlook for its core North American market between 2020 and 2022 at its Investor Day.
Developers Test Cross-Blockchain Protocol for One-Way ERC20-Bitcoin LN Atomic Swaps
An R&D lab at crypto startup TenX has tested the use of its cross-blockchain interoperability protocol to transfer ERC20 tokens for Bitcoin (BTC) using the Lightning Network (LN). The technical challenge was to exchange ERC-20 tokens which run on the Ethereum (ETH) platform but are not strictly “native” since they rely on invoking a smart contract to transfer ownership for Bitcoin’s smallest transactable unit, known as “Satoshi,” using the second-layer scalability LN protocol. The ERC20 transfer function uses msg.sender for authentication. However, calling transfer from a contract deployment sets msg.sender to the address of the yet to be deployed contract which doesn’t have tokens. CoBlox states it is still “looking at ways” to resolve the limited directionality issue, and has therefore not included the results of its proof-of-concept (PoC) for ERC20 tokens as part of the open-source release of its COMIT network.
China: Shenzhen Special Economic Zone to Use Blockchain for Electronic Tax Invoices
Shenzhen, a major city in the Guangdong Province and the first economic special zone in China, will allegedly use blockchain technology for electronic tax invoices. According to the director of the Information Center of Shenzhen Taxation Bureau, a blockchain electronic invoice is different from a traditional electronic invoice, as it has “the advantages of ‘distributed’ storage, traceability and non-tamperability.” The application of the blockchain electronic invoice to the WeChat payment platform is a substantial exploration made by the Shenzhen Tax Department based on the actual needs of the taxpayers to further optimize the business environment. WeChat, the 1 billion user social media platform operated by Tencent, has opened its payment platform for the blockchain invoice function.
Canadian City of Calgary Launches Local Digital Currency for Intracity Transactions
Calgary, a city in the Canadian province of Alberta, has launched its own digital currency. The Calgary Dollar will allow holders to pay for services and goods at local shops. the Calgary dollar was initially launched in 1996, with citizens and businesses offering goods and services in exchange for the local currency alongside the Canadian dollar. This new move in 2018 allows citizens to download an app and store the digital currency on their devices. The officials expect that the Calgary dollar could support small businesses and nonprofits by keeping funds within the city. Calgary dollars work through a smartphone app that lists shops and restaurants that participate in the program. One way to obtain the currency is by posting ads for goods and services that users want to sell in the app or on project’s website for Calgary dollars, receiving a small amount of the digital currency in exchange for posting the ad. Calgary is reportedly the first city in Canada to launch its own coin.