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).