2 min Market Summary: 4 Jan 2019

NOTABLE MOVES 

 

As of Fri, Jan 04, 08:00 Singapore Time zone UTC+8

USDJPY, +0.39%, $107.86
EURUSD, +0.70%, $1.1394
GBPUSD, +0.91%, $1.2630
USDCAD, -1.13%, $1.3478
AUDUSD, +1.33%, $0.7010
NZDUSD, +0.90%, $0.6690

S&P500, -2.48%, 2,447.89
Nasdaq, -3.04%, 6,463.50
Nikkei Futures, +0.09%, 19,382.0

CURRENCY MARKET WRAP 

  • U.S. ISM Manufacturing PMI 54.1 vs expected 57.7. The key takeaway from the report is that the December decrease was fuelled by a sharp pullback in the New Orders component, which is the same element that lifted the November ISM Manufacturing Index into the neighbourhood of its high from 2018.
  • Fears over growth and corporate earnings had investors flocking to risk-free U.S. Treasuries. Consequently, the 2-yr yield and 10-yr yield fell 11 basis points each, to 2.38% and 2.55%, respectively. The rally in Treasuries took place amid building expectations for a rate cut by the end of the year. The fed funds futures market now sees a 46.1% implied likelihood of a rate cut in December, up sharply from yesterday’s implied probability of just 9.6%. The U.S. Dollar Index lost -0.6% to 96.23.

 STOCK MARKET WRAP 

  • The S&P 500 dropped -2.48% on Thursday, as a revenue warning from Apple (AAPL 142.19, -15.73, -10.0%) and weak manufacturing data stoked worries about a slowdown in global economic growth. Apple rattled the market when it lowered its revenue guidance for the first time since 2002. CEO Tim Cook attributed the lower outlook to weaker demand in China, where the economy has been decelerating notably. Selling accelerated after the ISM Manufacturing Index for December came in below consensus at 54.1, falling from 59.3 in November. While growth concerns are not new, Thursday’s setbacks exacerbated fears that economic growth might be slowing more quickly than anticipated, which would present a headwind to corporate earnings.
  • Delta Air Lines (DAL 45.61, -4.48), for its part, fell -8.9% after its pre-announced fourth quarter results included softer than expected unit revenue.
BLOCKCHAIN & CRYPTOCURRENCY NEWS 
 
Chilean Treasury Launches Blockchain Platform to Process Public Payments
The Chilean General Treasury of the Republic (TGR),  a dependent institution under the Ministry of Finance has launched a blockchain platform to process payments. The platform stores transactions that are processed by Chilean public institutions such tax payments or patent fees on blockchain. Before recording the transaction, all nodes participating in the process are obliged to approve it. Allegedly, a common database used both by government, institutions and banks will help to eliminate data discrepancies, reduce time spent on payments, as well as cut operational costs, while providing the necessary level of security for personal data. The Chilean government is exploring blockchain in several areas, including the energy and finance sectors. In April, Chile’s national energy regulation organization announced the launch of a project based on the Ethereum (ETH) blockchain to record data from the nation’s energy sector.
 
Nasdaq-Powered Exchange to Launch EU-Regulated Tokenized Stock Trading
Estonian digital trading platform DX Exchange will begin offering tokenized stocks on the Ethereum blockchain next week. DX, which will reportedly be the first exchange to offer such trading in a fully regulated environment in the European Union, will use Nasdaq’s Financial Information exchange (FIX) protocol to deliver the product. According to the company’s press release, cryptocurrency users will be able to purchase tokens that will be backed by stocks in various major companies, including Google, Facebook and Amazon. The shares will be purchased on users’ behalf by MPS MarketPlace Securities Ltd., with which DX has an exclusive partnership agreement. DX first appeared as a concept in May last year, with the latest move making it a regulated trading environment for cryptocurrency, fiat currency and digital stocks. Nasdaq has already dedicated itself to a future involving cryptocurrency and blockchain technology, with its own Bitcoin futures contracts rumored to launch in the first half of 2019.
 
Thai National Tech Development Center to Introduce Blockchain in Voting
The National Electronics and Computer Technology Center (NECTEC) of Thailand has developed blockchain technology for e-voting. NECTEC is a statutory government organization that operates under the purview of the National Science and Technology Development Agency and the Ministry of Science and Technology. The organization chiefly promotes the development of computing, electronics, IT and telecommunications. The technology reportedly can be deployed in tandem with traditional voting as Thais become more technologically literate. According to NECTEC, once 5G is eventually adopted, all votes will be connected with the new technology.  In order for the system to function, it requires a controller, voters and candidates. Prior to the election, the controller can verify voter identity and candidate qualifications. Voters will purportedly be able to vote by email and must be verified by mobile camera. Other countries have also been considering using blockchain technology to secure and conduct election processes. Following the 2018 federal mid-term elections in the United States, the Secretary of State of West Virginia reported a successful trial of mobile blockchain voting for West Virginians in the armed services stationed overseas.

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