As of Thur, Dec 07, 08:00 GMT (UTC +08:00)
USDJPY, -0.42%, 112.72
EURUSD, +0.28%, 1.1376
USDCAD, +0.28%, 1.3392
NZDUSD, -0.23%, 0.6882
S&P500, -0.15%, 2,695.95
Nasdaq, +0.42%, 7,188.26
Nikkei Futures, -1.91%, 21,501.62
CURRENCY MARKET WRAP
- US ADP Employment Change Nov at 179K vs expected 225K. US Balance of Trade Oct at $-55.5B vs expected $-54.6B. US ISM Non-Manufacturing Employment Nov at 58.4 vs expected 59.7. US Factory Orders MoM OCT at -2.1% vs expected 0.2%. The data is a worrisome addition to recent hints that the US economy might be slowing and come after major job-cutting announcements from companies like General Motors and Ford. Adding to the volatility is renewed focus on the US yield curve inversion amid US 10Y Treasury yields falling towards 2.88%. This slew of data comes ahead of the government’s official employment report, due out Friday, and which economists project will show a gain of 185,000 non-farm jobs.
- OPEC ended talks with an agreement that production cuts are needed but did not set a level for the cuts. Russia had flexed its muscles by so far refusing to commit to the big output curb that Saudi Arabia is demanding. It is the latest example of how OPEC is under pressure from forces that are re-drawing the global oil map, leaving it increasingly dependent on the support of non-member Russia. Oil prices tumbled Thursday after Saudi Oil Minister Khalid al-Falih, while leaving the OPEC meeting, said he was “not confident” OPEC and its allies will reach an agreement on reducing oil production. Meanwhile, political pressure from US President Donald Trump has also added to the negative picture. Earlier, he tweeted: “Hopefully, OPEC will be keeping oil flows as is, not restricted. The world does not want to see, or need, higher oil prices.” The added pressure should be seen in light of worsening US-Saudi diplomatic relations following the killing of journalist Khashoggi in October. OPEC is expected to discuss production levels with its allies, led by Russia, on Friday.
- Theresa May is being urged by senior Tories to postpone next week’s crunch vote on her Brexit deal to allow time to plead for a better agreement in Brussels, as Downing Street scrambled to head off a big Eurosceptic rebellion. Many MPs have expressed concerns about the backstop mechanism, which is designed to stop the return of a physical border on the island of Ireland. It would mean Northern Ireland staying aligned to some EU rules, which many MPs say is unacceptable. The UK would also not be able to leave the backstop without EU agreement.
STOCK MARKET WRAP
- US markets stabilised on Thursday after steep falls earlier in the day spurred by fears about US-China trade tensions and global growth. The latest souring in risk sentiment relates to renewed trade uncertainty as the CFO of Chinese giant Huawei Technologies, Wanzhou Meng, has been arrested by Canadian authorities on extradition claims from the US. The arrest rekindles questions on the outlook for a US-China trade deal. U.S. equities closed up from the lows of the day after a late rally in large technology stocks helped to propel the Nasdaq 100 higher in what was the biggest reversal for the index since April. Helping to ease anxiety on the stock market were comments from two regional Federal Reserve presidents urging policy caution from the U.S. central bank amid mounting economic uncertainties and recent volatility in financial markets.
- In earnings news, Broadcom Inc (AVGO) on Thursday reported quarterly revenue and profit above analysts’ estimates, driven by strong demand for its enterprise storage and networking products from data centres, sending its shares up 5 percent in extended trading. Canadian athletic apparel maker Lululemon Athletica (LULU) reported a third-quarter profit above analysts’ estimates, driven by a rise in its established store sales and higher online traffic.
SEC Again Delays Decision on VanEck-SolidX Bitcoin ETF
The U.S. Securities and Exchange Commission (SEC) extended a rule change proposal allowing the nation’s first bitcoin exchange-traded fund (ETF), pushing the decision deadline to next year. In a notice posted online, the securities regulator said it was extending the review period for the ETF to Feb. 27, 2019. The proposal was first submitted by money manager VanEck and blockchain startup SolidX, who partnered with the Cboe exchange earlier this year. The decision comes after months of uncertainty as a number of previous ETF proposals were rejected by the SEC, most notably in August when the regulator simultaneously rejected nine proposals submitted by ProShares, GraniteShares and Direxion. The rejections were suspended the next day when the SEC announced it would review all of the proposals. The SEC similarly reopened a comment period for this proposal, designating October 17 as the deadline for any statements and October 31 as the deadline for any rebuttals.
Major Singapore-based cryptocurrency exchange Huobi has gained a so-called Distributed Ledger Technology (DLT) license in Gibraltar and will use its new status to launch an international platform geared to both retail and institutional traders. it will compete with fellow exchanges including Binance, Bittrex and Coinbase in serving traders in as many jurisdictions as possible as regulatory frameworks continue to evolve and it hopes to debut its service in the first half of 2019. Huobi is currently the world’s third largest exchange by daily trade volume, seeing about $466 million in trades over the past 24 hours. The blockchain platform from Gibraltar’s stock exchange also gained regulatory approval this month, while state-sponsored initiatives are also hoping to address the demand for blockchain-related skills.
Digital asset manager Bitwise has launched two new beta funds for Bitcoin (BTC) and Ethereum (ETH). The launch of the new products aims to provide a “low-cost” and “liquid” means of capturing returns on both high-profile assets, which are currently trading 81 and 92 percent respectively below their all-time highs. According to a press release, the funds will not charge premiums, exit fees, impose lockups, nor charge extra expenses “outside the stated management fee.” Investors’ holdings will be kept in cold storage wallets held by an unnamed “institutional third-party custodian,” and Bitwise says it will provide clients with K-1 tax documents each year. Bitwise has also filed with the U.S. Securities and Exchange Commission (SEC) to launch a regulated multi-cryptocurrency exchange-traded fund (ETF), which has been designed to include ten cryptocurrencies. If approved, the ETF would track the Bitwise HOLD 10 Private Index Fund that was founded last November.