USDJPY, -0.01%, $113.47.
EURUSD, -0.67%, $1.1317 .
GBPUSD, -0.33%, $1.2752.
USDCAD, +0.10, $1.3296
NZDUSD, +0.35%, $0.6882.
S&P500, +0.82%, 2,760.17
Nasdaq, +0.79%, 7,330.54
Nikkei, +0.40%, 22,351.06
CURRENCY MARKET WRAP
- U.S. Chicago PMI at 66.4 vs expected 58.6. U.S. Treasury yield curve saw some flattening with the 2-yr yield adding one basis point to 2.81%, and the 10-yr yield losing three basis points to 3.01%. Also, the U.S. Dollar Index rose 0.4% to 97.20.
- E.U. CPI Flash Estimate y/y at 2.0% vs expected 2.1%. Core CPI Flash Estimate y/y at 1.0% vs expected 1.1%. The Euro continues to be undermined by persistent political turmoil in Europe, as Italy can’t come with a budget that satisfies the EU.
- On Brexit, Britons kept discussing whether or not to approve the deal and possible alternatives to it, while EU authorities repeat that the deal signed November is the only possible deal. Chances that the UK Parliament will vote May’s plan are low, and to add fuel to the fire, Sam Gyimah, the UK Minister of Science and Universities, resigned in opposition to the agreement.
- The pace of economic growth in Canada slowed in the third quarter as business investment spending moved lower and the growth in household spending slowed. Canadian GDP m/m at -0.1% vs expected 0.1%.
STOCK MARKET WRAP
- The S&P 500 finished strong with a gain of 0.82% on Friday to conclude one of its best weeks of the year. Chip stocks outperformed, evidenced by the Philadelphia Semiconductor Index rising 1.5%, to help lift the heavily-weighted information technology sector. NVIDIA (NVDA 163.43, +6.07, +3.9%) led chip stocks higher, though Apple (AAPL 178.58, -0.97, -0.5%) was unable to gain traction, eventually losing its status as the S&P 500’s largest company by market cap to Microsoft (MSFT 110.89, +0.70, +0.6%).
- In other corporate news, General Electric (GE 7.50, -0.44) and Marriott (MAR 115.03, -6.81) lost -5.5% and -5.6%, respectively, amid some negative occurrences. A WSJ report indicated that General Electric ignored insurance risks, according to some former employees. Deutsche Bank also lowered its GE price target to $7. Separately, Marriott announced a data breach involving its guest reservation database for its Starwood-branded hotels. Investors turned their attention to the highly-anticipated G-20 Leaders Summit in Argentina, where Trump and China President Xi are expected to take the main stage at a dinner meeting on Saturday.
- Over the weekend, China and the US agreed to a ceasefire in their trade war on Saturday after high-stakes talks in Argentina between Trump and President Xi Jinping, including no escalated tariffs on Jan. 1. Trump will leave tariffs on $200 billion worth of Chinese imports at 10 percent at the beginning of the new year, agreeing to not raise them to 25 percent “at this time”, the White House said in a statement. “China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries,” it said.
BLOCKCHAIN & CRYPTOCURRENCY NEWS
Japan’s financial regulator is set to introduce new Initial Coin Offering (ICO) regulations to protect investors from fraud. Business operators conducting ICOs will be required to register with Japan’s Financial Services Agency (FSA). The agency is reportedly planning to submit bills revising financial instruments, exchanges and payment services laws to the ordinary parliamentary session that starts in January. This action has been undertaken “in view of a number of possibly fraudulent ICO cases abroad” as a way “to limit individuals’ investment in ICOs for better protecting them.” the FSA Study Group on Virtual Currency Exchange industry conducted its tenth meeting to discuss ICOs. The tokens emitted during ICOs where classified into three categories: virtual currencies without issuer, virtual currencies with issuer and tokens with issuers that are also obliged to distribute revenues.
The G20 countries have called for the taxation of cryptocurrency, as well as its regulation to combat money laundering. The final text of a document jointly delivered by G20 leaders calls for “a taxation system for cross-border electronic payment services.” The article then specifies that under current laws, foreign companies that do “not have a factory or other base in Japan” cannot be taxed by the local government. The publication then cites that the G20 leaders seek to “build a taxation system for cross-border electronic services.” A final version of regulations, after considering proposals from each member state, is reportedly expected to be in place by 2020. The CEO of the company behind the cryptocurrency investment app Circle had called for “normalization at the G20 level” of the crypto industry.
Huawei Cloud, the cloud services arm of Huawei Global, has announced the launch of its Blockchain Service (BCS). The service allows global entrepreneurs and developers to create, deploy and manage blockchain applications on Huawei Cloud, at a blistering pace and cheaper cost. Per the announcement, the global launch of BCS will also lay the groundwork for a soon to be released distributed global blockchain platform. BCS is a cloud service that leverages on the blockchain and on some of the advantages inherent in the Huawei Cloud container and security technologies. The company claims that the BCS can be applied in most industries, including the Internet of Things (IoT), data applications and finance. BCS will be able to cover a wide array of scenarios, including but not limited to identity verification, food source tracing, remote healthcare, data transactions etc. Several applications of blockchain technology are being investigated and explored by various enterprises across various industries, but Huawei is taking it a step further by deploying the distributed ledger technology on a cloud service. Deployment is a time-consuming process, and it is essential that developers have a proper understanding of the terminologies and concepts under blockchain technology.