NOTABLE MOVES 

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

USDJPY, -0.15%, $109.81
EURUSD, -0.19%, $1.1341
GBPUSD, +0.13%, $1.2951
USDCAD, +0.70%, $1.3307
AUDUSD, -0.05%, $0.7100
NZDUSD, -0.44%, $0.6745

S&P500, -0.94%, 2,706.05
Nasdaq, -1.32%, 6,904.98
Nikkei Futures, -1.91%, 20,472.0      

CURRENCY MARKET WRAP 

  • Initial claims for the week ending February 2 decreased by 19,000 to 234,000 (consensus 220,000). Continuing claims for the week ending January 26 decreased by 42,000 to 1.736 million. The key takeaway is that the labor market is still looking pretty good, as initial claims remain low.
  • NEC Director Larry Kudlow told Fox Business Thursday morning that there is still “a pretty sizable distance to go in U.S. trade talks.” A White House official then told CNBC that a meeting between Trump and China’s President Xi was “highly unlikely” to happen prior to the March 1 trade deadline. Trump later confirmed that a meeting is not likely before the deadline. 
  • Growth concerns resurfaced following a batch of disappointing updates from overseas: (1) the Bank of England voted unanimously to leave its key rate unchanged at 0.75% (expected) and lowered its 2019 GDP growth outlook to 1.2% from 1.7%, (2) the EU Commission cut its 2019 euro area GDP growth forecast to 1.3% from 1.9%, (3) Germany reported a 0.4% month-over- month decline in industrial production in December (expected 0.8%) and (4) the Reserve Bank of India surprisingly cut its key lending rate 25 basis points to 6.25%.
  • U.S. Treasury yields declined amid the economic growth concerns. The 2-yr yield decreased six basis points to 2.47%, and the 10-yr yield decreased five basis points to 2.65%. The U.S. Dollar Index increased 0.2% to 96.54. WTI crude lost -2.4% to $52.70/bbl

STOCK MARKET WRAP 

  • The S&P 500 lost -0.94% on Thursday, as recurring concerns about a slowdown in global growth and the prospects of a U.S.-China trade deal weighed on investor sentiment. In addition, an underlying sense that the market was due for a pullback also fuelled broad-based profit taking. The S&P 500 energy (-2.1%), information technology (-1.4%), and materials (-1.4%) sectors led Thursday’s retreat. Conversely, the defensive-oriented, and higher-yielding, utilities (+1.3%) and real estate (+0.8%) sectors were the lone groups to finish with gains.
  • In earnings news, Twitter (TWTR 30.80, -3.36, -9.8%), Fiat Chrysler (FCAU 15.23, -2.12, -12.2%), and Tapestry (TPR 33.48, -5.83, -14.8%) all posted steep losses after the companies disappointed investors with their results. On the other hand, Chipotle Mexican Grill (CMG 585.78, +59.72) jumped 11.4% after it impressed investors with a strong report and reassuring outlook.

BLOCKCHAIN AND CRYPTOCURRENCY NEWS

State-Issued Digital Currencies Can Squeeze Banks, Says South Korea Central Bank
South Korea’s central bank issued a warning over central bank digital currencies (CBDCs) a week after saying it would not introduce one itself. CBDCs, which are also known variously as state-backed or government-backed digital currencies, involve a blockchain-based version of a country’s fiat currency either replacing or circulating in tandem with paper notes and coins. A number of governments are currently examining the feasibility of using a CBDC, while South Korea formally decided against the measure in late January. The decision came as a result of a six-month consultation process from Bank of Korea (BoK). Now, the central bank has claimed in a report that a CBDC would result in mass withdrawals of funds from private institutions, squeezing liquidity and pushing up interest rates. Seoul has opted not to make significant changes to its stance on cryptocurrency as a whole in recent weeks. 

Two Investment Firms Launch ETF Tracking Cloud Computing and Blockchain Companies
United States-based Investment management firm AdvisorShares and investments advisory company Sabretooth Advisors will jointly launch an exchange-traded fund (ETF) that tracks tech companies, including those involved with blockchain and cloud computing. ETFs are marketable securities that track a basket of assets proportionately represented in the fund’s shares. ETFs are offered on all asset classes, including traditional investments and alternative assets like commodities or currencies, also enabling investors to short markets or to gain leverage. The idea of the new AdvisorShares Sabretooth ETF (ticker: BKCH) is that entities deploying cloud computing and involved with emerging technologies like blockchain could reach increased profitability and rises in share prices within a reasonable time. Many see the emergence of cryptocurrency and blockchain ETFs, among other derivatives, as a sign that those markets are maturing.


Major Swiss Stock Exchange SIX to Launch New Blockchain-Powered Digital Exchange
Switzerland’s principal stock exchange SIX Swiss Exchange will test blockchain integration for its forthcoming parallel digital trading platform SDX in the second half of this year. SIX Swiss Exchange sees roughly 5.19 billion Swiss Francs (CHF) (~$5.18 billion) in daily turnover, and has a market capitalization of over 1.67 trillion CHF ~($1.6 trillion). CEO Jos Dijsselhof said that the company had chosen the technology for the time efficiency and improved security it can offer across all stages of stock trading and settlement. Dijsselhof added that wholly digital, blockchain-powered stock trading will not only minimize risks, but widen the range of tradable titles, affirming his ambition that SIX would succeed in building “a whole new stock market on the blockchain with completely integrated trading, handling and custody of digital assets”.  SIX expects its blockchain-based SDX digital exchange to supersede its existing marketplace within a decade.

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