NOTABLE MOVES 

As of Thu, Feb 7, 08:00 Singapore Time zone UTC+8

USDJPY, +0.01%, $109.99
EURUSD, -0.41%, $1.1368
GBPUSD, -0.07%, $1.2934
USDCAD, +0.71%, $1.3219
AUDUSD, -1.71%, $0.7111
NZDUSD, -1.82%, $0.6769

S&P500, -0.22%, 2,731.61
Nasdaq, -0.37%, 6,997.62
Nikkei Futures, +0.20%, 20,872.0

CURRENCY MARKET WRAP 

  • U.S. Treasuries ended the day near their unchanged marks. The 2-yr yield decreased one basis point to 2.53%, and the 10-yr yield remained unchanged at 2.70%. The U.S. Dollar Index increased 0.3% to 96.38. WTI crude rose 0.4% to $53.99/bbl.
  • Aussie was the biggest loser, dropping -1.71%, this was the largest decline in more than a year. After a relatively benign monetary policy statement, RBA Governor Lowe surprised investors when he said the interest rate outlook is now more evenly balanced. He added that global risks and domestic housing market consumption requires the central bank to have the budget to respond to any downturn. In doing so, he has not only ruled out a 2019 rate hike but also fuelled modest expectations for easing. With retail sales falling, service and construction activity contracting, the RBA’s cautious outlook solidified the top in Aussie.
  • Kiwi had been tracking Aussie, but was heavily offered in a matter of seconds following a significantly weaker than expected employment report. Economists had been looking for the unemployment rate to rise from 3.9% to 4.1% but instead it rose to 4.3% from an upwardly revised 4% (from 3.9%) reading. Employment increased less than expected and the participation rate declined in Q4. Average hourly earnings growth also slowed to 1% from 1.4%. Although dairy prices rebounded today, this report validates the central bank’s decision to keep interest rates on hold for the foreseeable future.

STOCK MARKET WRAP 

  • The S&P 500 lost -0.22% on Wednesday in a lackluster trading session. The benchmark index traded with modest losses nearly the entire day with price action dictated by the underperformance of the entertainment software stocks, the outperformance of the semiconductor stocks, and an underlying sense that the market was due for a breather.
  • Entertainment software stocks dragged on the communication services sector following earnings reports from Electronic Arts (EA 80.21, -12.31, -13.3%) and Take-Two Interactive (TTWO 92.53, -14.76, -13.8%). The two companies disappointed investors with quarterly guidance that was lower than expected, which reportedly fuelled competition concerns. Dow component Walt Disney (DIS 111.41, -1.25) for its part lost -1.1% despite beating earnings expectations.
  • The heavily-weighted tech sector derived its relative strength from the outperformance of chip stocks. The Philadelphia Semiconductor Index rose 2.6%. It wasn’t the downside guidance for the March quarter from Microchip (MCHP 89.31, +6.07, +7.3%) and Skyworks Solutions (SWKS 84.69, +8.73, +11.5%) that pleased investors. Instead, it was Microchip’s contention that the March quarter should be a “bottom” for revenues that presumably fuelled broad-based buying interest.
  • Separately, Snap (SNAP 8.59, +1.55) made headlines, surging 22.0% after the company provided a better-than-feared indication of its daily active users in its quarterly report. Specifically, the number of daily active users was sequentially flat at 186 million in the fourth quarter. Snap added that it doesn’t expect to see a sequential decline in the first quarter.

BLOCKCHAIN & CRYPTOCURRENCY NEWS 

US Crypto Exchange Coinbase Adds Bitcoin Support to Coinbase Wallet App
As explained by the crypto exchange, Coinbase Wallet is slightly different from the main app, Coinbase (or Coinbase.com). With the latter, the cryptocurrencies purchased by customer and the private keys are stored by Coinbase. With Coinbase Wallet, users stores their own crypto protected by their unique private keys. The new update for Coinbase Wallet will be rolled out for iOS and Android next week. Bitcoin support will be activated by default, as soon as users choose to receive the coin to the wallet. The users’ private keys will be encrypted on the phone using Secure Enclave technology. The announcement states that Coinbase Wallet supports both SegWit and Legacy addresses and is considering adding add Bitcoin Cash (BCH), Litecoin (LTC), and other major cryptocurrencies.

Wall Street Blockchain Alliance Joins Enterprise Blockchain Consortium R3
The Wall Street Blockchain Alliance (WSBA) has joined blockchain consortium R3 to develop applications and solutions on their Corda platform. According to a statement made by the CEO of R3, David E. Rutter, the WSBA and R3 will collaborate in order to “advocate a strategic approach to collaborating with regulatory bodies so that financial markets, and beyond can gain the full benefits of blockchain’s capabilities.” R3, an enterprise blockchain software firm with over 300 partners, has developed Corda, an open-source blockchain platform for both the private and public sectors across multiple industries.

US Crypto Exchange Coinbase Launches Paypal Withdrawals Support for EU Users
Major United States crypto exchange and wallet provider Coinbase is launching support for European Union residents to make fiat currency withdrawals to online payment system PayPal. Coinbase had first rolled out PayPal withdrawal support for U.S. users last month. The European extension of the service will reportedly apply to both E.U. residents and those living in European Free Trade Association countries — Iceland, Liechtenstein, Norway and Switzerland. Coinbase is currently looking to diversify its crypto support, as well as fiat gateways — in December, the exchange revealed it was exploring expanding its listed assets to over 30 cryptocurrencies in as many jurisdictions as regulatory authorities allow.

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