Deal or No Deal Brexit

Market Review 04-04

Market Review 04-04

Forex News

British Pound Firms After Lawmakers Vote to Block No-Deal Brexit

From: Bloomberg.com

  • ‘I would have expected a bit more,’ CIBC’s Bipan Rai says
  • ‘Anything that helps avoid hard Brexit is positive’: Westpac

Sterling firmed after U.K. lawmakers voted to block a so-called no-deal Brexit, although the currency held well within its trading range from the prior day.

The pound climbed as much as 0.2 percent to $1.3181 in Asia trading Thursday. The move came after a bill to prevent Britain from tumbling out of the European Union without an agreement passed the House of Commons by a solitary vote. It will now go to the House of Lords, which is widely expected to approve it.

The U.K. currency “got a lift though I would have expected a bit more,” said Bipan Rai, North American head of foreign-exchange strategy at Canadian Imperial Bank of Commerce. “There are still some hurdles to clear.” He sees the pound reaching $1.34 by the end of this quarter, given the declining odds of a no-deal scenario.

The situation nonetheless remains exceptionally fluid. While the most recent vote is a step toward a so-called softer Brexit, there are many hard negotiations still to come, and the risk of an election also looms.

“Anything that helps avoid hard Brexit is positive,” said Westpac currency strategist Sean Callow. But he also noted ongoing speculation about an early election, divisions within the ruling Conservative Party and the prospect of a joint Labour-Scottish National Party government “which sterling has lots of reasons not to like.”

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U.S. Dollar, Yuan Slip Despite Renewed Trade Optimism

From: Investing.com

The U.S. dollar and the Chinese yuan slipped on Thursday in Asia despite recent reports that suggested Beijing and Washington are closing in on a trade agreement.

The U.S. dollar index that tracks the greenback against a basket of other currencies slipped 0.1% to 96.620 by 12:01 AM ET (04:01 GMT).

The USD/CNY pair rose 0.1% to 6.7144.

The fall in the dollar and the yuan came despite progress in trade talks and the People’s Bank of China setting higher mid-point reference rates.

The Federal Reserve’s decision to abandon all rate hike projections for the rest of 2019 due to concerns on slowing domestic growth might be putting the dollar under pressure, analysts said.

“The end of the Fed’s tightening cycle now appears to be more clearly in sight, and indeed there is some risk it has already been reached. Overall, evolving Fed policy should become an increasing headwind for the U.S. dollar, and an increasing tailwind for the renminbi,” said Erik Nelson, currency strategist at Wells Fargo (NYSE:WFC), in a Reuters report.

Meanwhile, worse-than-expected job growth in the U.S. private sector reported on Wednesday supports the Fed’s view to extend a pause on rate hikes.

Private payrolls grew by 129,000 last month, a sharp decline from the 197,000 in February, according to a report released Wednesday by ADP (NASDAQ:ADP) Moody’s Analytics. That missed economists’ forecast of 184,000.

The GBP/USD pair edged up 0.1% to 1.3172. The U.K. Parliament approved a bill to block a no-deal Brexit. The passage of the bill sets the U.K. on course for a long Brexit extension unless Prime Minister Theresa May could manage to salvage her withdrawal deal in the coming days.

The U.K. had originally been due to leave the EU on March 29, but the deadline was pushed back to April 12 to allow the U.K. parliament more time to approve the withdrawal agreement. But the agreement has failed to win a majority three times.

The USD/JPY pair was down 0.1% to 111.36.

The AUD/USD pair and the NZD/USD pair rose 0.1% and 0.2% respectively.

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Stock Market News

Investors sell U.S. stock funds despite best quarter since 2009

From: Reuters.com

Investors pulled a net of nearly $11 billion in assets out of mutual funds and exchange-traded funds that hold U.S. equities last week, the largest retreat from domestic stocks since the final week of January, Investment Company Institute data released on Wednesday showed.

The move came during the final week of the best quarter for the benchmark S&P 500 index since 2009, and the best first quarter since 1998, according to Refinitiv data. The S&P 500 is up nearly 15% year to date, boosted in part by hopes for a breakthrough in U.S.-China trade talks and the U.S. Federal Reserve’s decision to pause interest rate hikes.

With last week’s pullback, investors have now sold a net total of about $10.2 billion in assets from domestic stock funds over the 12 full weeks of the year, ICI said.

Investors pulled a net of $190 million out of world stock funds last week, continuing a six-week retreat from the category that began in late February. Despite those losses, world stock funds have brought in a net of about $4.3 billion in assets for the full year to date.

Bond funds added a net of nearly $7.9 billion, continuing a streak of positive inflows that dates to the first full week of the year. Over that time, investors have sent a net of about $112 billion into funds that hold either taxable or municipal bonds. The Vanguard Total Bond Market index fund, one of the world’s largest bond funds, is up 2.6 percent for the year to date.

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U.S. stocks higher at close of trade; Dow Jones Industrial Average up 0.15%

From: Investing.com

U.S. stocks were higher after the close on Wednesday, as gains in the Basic Materials, Technology and Consumer Services sectors led shares higher.

At the close in NYSE, the Dow Jones Industrial Average added 0.15%, while the S&P 500 index climbed 0.21%, and the NASDAQ Composite index gained 0.60%.

The best performers of the session on the Dow Jones Industrial Average were Home Depot Inc (NYSE:HD), which rose 2.21% or 4.30 points to trade at 198.61 at the close. Meanwhile, Intel Corporation (NASDAQ:INTC) added 2.02% or 1.10 points to end at 55.46 and Goldman Sachs Group Inc (NYSE:GS) was up 1.70% or 3.36 points to 200.86 in late trade.

The worst performers of the session were Boeing Co (NYSE:BA), which fell 1.54% or 6.01 points to trade at 384.74 at the close. Walgreens Boots Alliance Inc (NASDAQ:WBA) declined 0.94% or 0.52 points to end at 54.84 and Coca-Cola Company (NYSE:KO) was down 0.84% or 0.39 points to 46.18.

The top performers on the S&P 500 were Acuity Brands Inc (NYSE:AYI) which rose 8.80% to 134.79, Advanced Micro Devices Inc (NASDAQ:AMD) which was up 8.49% to settle at 29.02 and Nielsen Holdings PLC (NYSE:NLSN) which gained 7.22% to close at 26.00.

The worst performers were Range Resources Corp (NYSE:RRC) which was down 5.88% to 10.24 in late trade, Altria Group (NYSE:MO) which lost 4.78% to settle at 53.98 and Raytheon Company (NYSE:RTN) which was down 4.54% to 177.37 at the close.

The top performers on the NASDAQ Composite were Ocean Power Technologies Inc (NASDAQ:OPTT) which rose 55.20% to 7.760, Yangtze River Port and Logistics Ltd (NASDAQ:YRIV) which was up 55.01% to settle at 1.13 and Evogene Ltd (NASDAQ:EVGN) which gained 30.00% to close at 2.34.

The worst performers were Fusion Telecommunications International Inc (NASDAQ:FSNN) which was down 81.64% to 0.220 in late trade, Obalon Therapeutics Inc (NASDAQ:OBLN) which lost 61.87% to settle at 0.56 and Phunware Inc (NASDAQ:PHUN) which was down 60.60% to 5.52 at the close.

Rising stocks outnumbered declining ones on the New York Stock Exchange by 1691 to 1266 and 135 ended unchanged; on the Nasdaq Stock Exchange, 1497 rose and 1134 declined, while 81 ended unchanged.

Shares in Walgreens Boots Alliance Inc (NASDAQ:WBA) fell to 5-year lows; falling 0.94% or 0.52 to 54.84. Shares in Fusion Telecommunications International Inc (NASDAQ:FSNN) fell to all time lows; down 81.64% or 0.980 to 0.220. Shares in Obalon Therapeutics Inc (NASDAQ:OBLN) fell to all time lows; falling 61.87% or 0.91 to 0.56. Shares in Phunware Inc (NASDAQ:PHUN) fell to all time lows; down 60.60% or 8.49 to 5.52.

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Cryptocurrency News

Bitcoin’s Recent Renaissance Could Be Linked to Algorithmic Trading

From: Cointelegraph.com

The recent crypto market jump could be linked to algorithmic trading, Bloomberg writes on Wednesday, April 3.

Algorithmic trading — a method that uses automated software to detect trends and determine when trades should be made — has been on the rise in the last few months, according to Bloomberg. The industry has seen 17 new algo or quantitative funds launched since September, an amount that purportedly comprises 40 percent of crypto hedge funds started during this period.

While crypto funds in general lost around 72 percent due to the 2018 bear market, these algo funds reported on gains of between 3 percent and 10 percent per month during the so-dubbed crypto winter.

Bloomberg states that Bitcoin’s (BTC) unexpected 20 percent surge price on Tuesday, April 2, shortly after the Asian markets opened, might have been provoked by a $100 million trade made on three major exchanges.

As experts told Reuters, a 20,000 BTC order (around $100 million at press time) was spread across United States-based crypto exchanges Coinbase and Kraken, as well as Luxembourg’s Bitstamp. Triggered by the giant order, the bots could then start trading, forcing the prices and volumes to rise.

Some entrepreneurs quoted by Bloomberg think that algo trading will have a positive impact on the crypto industry. Wei Zhou, CFO of Malta-based crypto exchange Binance, says that they are going to be the new rock stars of the industry.

Meanwhile, others fear that algo trading can trigger market manipulation. Travis Kling, founder of the Los Angeles-based crypto hedge fund Ikigai, told Bloomberg that some of them could use fake orders to trick other traders.

Bloomberg has issued a series of articles and TV spots citing the possible reasons behind the visible market uprising. For instance, Bloomberg author Eric Lam recalled an April Fool’s Day story that claimed that the U.S. Securities and Exchange Commission had finally approved a Bitcoin ETF as possibly affecting the crypto markets.

Another reason cited by Bloomberg is the upcoming question of Brexit, as some believe that investors are changing pounds to BTC in the wake of Britain’s divorce with the EU.

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