NOTABLE MOVES
- U.S PPI m/m at 0.6% vs expected 0.2%. Core PPI m/m at 0.5% vs expected 0.2%. The report fuelled concerns about pass-through inflation to the consumer, which have been a concern by numerous companies during the third quarter earnings-reporting when they mentioned about higher input costs and increasing prices. A pullback in the stock market following the midterm elections spike stoked risk-off sentiment on Friday. 2-yr yield lost four basis points to 2.93%, and the 10-yr yield lost five basis points to 3.19%. USDJPY down -0.20%, $113.83.
- Political woes kept weighing on European currencies, with no-deal Brexit weighing on Sterling, and tensions between Italy and the EU Commission on the Euro. Italy’s Finance Minister Giovanni Tria reiterated that the country will maintain the planned 2019 budget, despite the EU threat of sanctions, as the coalition government wants to boost the local economy. Euro down -0.24%, $1.1336. U.K. GDP m/m at 0.0% vs expected 0.1%. Also weighing on Sterling was the resignation of Jo Johnson, the Transport minister and brother of Boris Johnson. U.K. Manufacturing Production m/m at 0.2% vs expected 0.1%. U.K. Prelim GDP q/q inline at 0.6%. Sterling down -0.65%, $1.2976.
- WTI crude fell -0.9% to settle at $60.16/bbl. Friday’s loss has extended its decline to -21.8% from its Oct 3 four-year high. USDCAD up 0.45%, $1.3211.
- S&P 500 down -0.92%, 2,781.01. Nasdaq down -1.67%, 7,039.15. Nikkei down -1.05%, 22,250.25.
- Chip stocks dragged on the lagging tech sector, as key Apple supplier Skyworks Solutions (SWKS 766.66, -6.74) fell -8.1% after it issued below-consensus top and bottom line guidance for its fiscal first quarter. Its guidance has extended a trend within the semiconductor industry that has warned of slowing chip demand. The Philadelphia Semiconductor Index lost -1.9%. Walt Disney (DIS 118.00, +2.00, +1.7%) rose after an upbeat earnings report, while General Electric (GE 8.58, -0.52, -5.7%) took a hit after JPMorgan cut its price target on the stock to $6 from $10. In response, the former Dow component responded that it is a “fundamentally strong company with a sound liquidity position,” according to a CNBC report.
- In trade news, White House National Trade Council Director Peter Navarro made some combative comments against CEOs for pushing Trump to make a trade deal with China and stated a trade deal will be on the president’s terms. Separately, Trump has reportedly been telling associates that he wants to replace Commerce Secretary Wilbur Ross by the end of the year.
BLOCKCHAIN & CRYPTOCURRENCY NEWS
Private blockchains, such as interbanking platforms set to share information on customers, could be suitable with new E.U. privacy rules. The General Data Protection Regulation (GDPR) act came into effect this May. According to the law, all data controllers have to respect citizens’ rights in terms of keeping and transferring their private information. In case a data controller fails to do so, the potential fines are set as €20 million (about $22 million) or four percent of global turnover/revenues, whichever is higher. Crypto-related technologies could fall under these rules and be treated as “controllers,” given that they publicly store private information about E.U. citizens in the chain and allow third parties to operate it. However, blockchain operators could be treated like “processors” instead, the same as the companies behind cloud technologies who act on behalf of users rather than control their data. This is mostly applicable for Blockchain-as-a-Service (BaaS) offerings, where a third party provides the supporting infrastructure for the network while users store their data and control it personally. The researchers urge the European Data Protection Board, an independent regulatory body behind GDPR, to issue clearer guidance on the application of data protection law to various common blockchain models.
Singapore Exchange Limited (SGX), along with the Monetary Authority of Singapore (MAS), have successfully tested the use of blockchain technology for tokenized assets settlement. The partners have developed a blockchain-driven solution for Delivery versus Payment (DvP) capabilities, a settlement procedure where the buyer’s payment for securities is due at the time of delivery. Reportedly, this could increase operational efficiency and reduce settlement risks. The technology could further help automate DvP settlement processes by using smart contracts. Tinku Gupta, Head of Technology at SGX, also revealed that the exchange has filed its first-ever patent.
Vietnam’s Ministry of Justice has submitted а report to the government in Hanoi that contains a review of the current legislation and an assessment of cryptocurrency-related business activities in the country. The authors of the document have also made a number of proposals about changes they consider necessary. Three alternative aproaches can be considered: the first approach, referred to as “floating,” involves the implementation of a relatively lax regulatory regime, the second called “prohibiting” is pretty much self-explanatory and the third option is to legalize digital asset transactions under certain conditions. Relevant ministries and departments will build an appropriate legal framework to govern digital assets and currencies after the executive power chooses the trend it wants to follow. However, Vietnamese authorities have not taken a final decision on cryptocurrencies yet. The country’s central bank has clearly stated that it does not recognize them as legal tender and has also supported a suspension of imports of mining equipment which the country’s Finance Ministry proposed.