NOTABLE MOVES
As of Thu, Jan 17, 08:00 Singapore Time zone UTC+8
USDJPY, +0.35%, $109.04
EURUSD, -0.16%, $1.1399
GBPUSD, +0.21%, $1.2887
USDCAD, -0.06%, $1.3257
AUDUSD, -0.42%, $0.7171
NZDUSD, -0.64%, $0.6773
S&P500, +0.22%, 2,616.10.
Nasdaq, +0.15%, 7,034.69.
Nikkei Futures, +0.01%, 20,512.5
CURRENCY MARKET WRAP
- Import prices declined 1.0% month-over-month (expected -1.3%) and were down 0.6% year-over-year. Excluding fuel, they were unchanged in December and up just 0.5% year-over-year. Export prices declined 0.6% and were up 1.1% year-over-year. Excluding agricultural products, they were down 1.1% in December and up 1.0% year-over-year. The key takeaway from the report is that it didn’t ring any inflation alarm bells that would compel the Fed to be less patient with its monetary policy approach.
- The Federal Reserve’s January Beige Book noted that eight out of twelve districts reported modest to moderate growth, but contacts had become less optimistic about their expectations due to increased volatility in financial markets, rising short-term rates, falling energy prices, and trade/political uncertainty.
- U.S. Treasuries ended on Wednesday on a lower note, pushing the 2-yr yield and 10-yr yield up two basis points each to 2.54% and 2.73%, respectively. The U.S. Dollar Index was flat at 96.08. WTI crude reversed course to finish higher by 0.8% at $52.33/bbl.
- Prime Minister May’s Brexit deal suffered a big defeat yesterday in Parliament. She lost by 230 votes, which was her worst case scenario. Instead of falling, Sterling surged on the decision and is trading above 1.28. As BoE Governor Carney pointed out, the rebound in the currency reflects expectations that Article 50 will be extended and the prospect of no deal diminished. No one wants a disorderly no deal Brexit and the next step for May will be to lay out Plan B by January 21st. U.K. CPI y/y 2.1% as expected 2.1%. PPI Input m/m -1.0% vs expected -1.5%.
STOCK MARKET WRAP
- The S&P 500 gained 0.22% on Wednesday, as strong earnings from Bank of America (BAC 28.45, +1.90, +7.2%) and Goldman Sachs (GS 197.08, +17.17, +9.5%) helped keep the rally going. The benchmark index was up as much as 0.6%, but succumbed to selling pressure into the close. The S&P 500 financial sector carried the load on Wednesday with a sizable gain of 2.2%. Conversely, the consumer staples (-0.5%) and communication services (-0.4%) sectors underperformed the broader market. Bank of America and Goldman Sachs climbed 7.2% and 9.5%, respectively, after both exceeded Wall Street’s expectations for revenue and earnings in the fourth quarter. United Continental (UAL 86.36, +5.16, +6.4%) also reported better-than-expected top and bottom lines. Its strong report, and a reassuring outlook, helped lift the Dow Jones Transportation Average (+0.5%) and airline stocks as a whole. The market has had its fair share of earnings warnings during this rally and Wednesday was no exception. Still, the stock market seemed unaffected by a fourth quarter earnings warning from Ford Motor (F 8.29, -0.55, -6.2%) and retailer Nordstrom (JWN 45.01, -2.25, -4.8%) saying its full-year earnings are expected to be at the low end of its previous outlook due to weaker-than-expected holiday sales. UK Prime Minister Theresa May survived a no-confidence vote a day after her Brexit plan was soundly defeated. Her ability to survive the no-confidence vote was widely expected and, like Tuesday, the outcome was a non-factor for U.S. markets.
Swiss Crypto Industry Leader Says Next Crypto Wave Will Be Stablecoins, Security Tokens
Bitcoin Association Switzerland board member Luzius Meisser says he believes the next wave of crypto innovation will focus on stablecoins and security tokens. In regard to the medium-term future of crypto, Meisser said he expects the initial coin offering (ICOs) sector to undergo a significant change, noting that until now ICO investors have had negligible rights, as they have essentially been little more than donors. With demands that their protections become more tangible, Meisser predicted that security tokens can be expected to account for the next, much more heavily regulated wave of the ICO market. Meisser’s exception was certain stablecoins, whose decentralized mechanisms ensure they are legally considered to be payment or utility tokens rather than securities. He isolated stablecoins more broadly, whether they are securities or otherwise, as an important future pillar of the blockchain industry. In other remarks, Meisser noted that Swiss banks remain very risk averse and thus try not to touch crypto, and outlined several mechanisms local enterprises and startups can use to circumvent banking difficulties in the country.
BitMEX Research: ICO Tokens Allocated by Teams to Themselves Lost 54% of $24 Bln Value
The value of tokens that over a hundred of initial coin offering (ICO) teams have allocated to themselves has decreased by 54 percent from the initial figure of $24 billion. BitMEX has conducted a research of the ICO market in collaboration with analytics firm TokenAnalyst, looking into treasury balances of more than a hundred projects on the Ethereum (ETH) network. The analysis reportedly made use of machine learning techniques and was based on the interpretation of smart contract data and transaction patterns on the Ethereum blockchain. The combined value of all the tokens that the analyzed projects have allocated to their own teams, has gone down from $24.2 billion at the time of each individual token’s issuance to about $5 billion as of today. The conclusion drawn by BitMEX and TokenAnalysits from their research is that the ICO market suffers from a lack of standards and transparency, especially in regards to allocating tokens to the founding teams. BitMEX noted that the analysis could be further complicated by the ability of ICO teams to mint, burn, buy, and sell their own tokens.
ConsenSys Joins News Industry Leaders to Invest in New WordPress Publishing Platform
Blockchain tech firm ConsenSys has joined news industry leaders to contribute to the creation of a new revenue-generating news platform by WordPress. ConsenSys has invested $350,000 in the new WordPress project called Newspack, an open-source publishing platform for news companies. Apart from investing in the new proof-of-concept (PoC) initiative by WordPress, which is the world’s most popular website management system, ConsenSys will also provide the new publishing platform with a blockchain-powered native plugin for Civil. Backed by ConsenSys, Civil will allow any interested newsroom to join its community-owned journalism network and archive their content on decentralized storage systems. Civil Media is a ConsenSys-backed firm that claims to deploy cryptocurrency to save journalism. In October 2018, the company raised $1.4 million in an initial coin offering (ICO) out of a targeted $8 million. However, the since the goal was not met, Civil refunded the money but announced plans to launch in February 2019 despite the failure to meet the target.