No Deal Brexit

Market Review 07-03

Market Review 07-03

Forex News

GBP/USD to slide to 1.2000 on no deal Brexit

From: FXstreet.com

According to a Reuters poll of foreign exchange strategists, the pound could drop around 9% against its American peer to test the 1.2000 level should the UK leave the European Union (EU) without a deal.

Key Findings:

“However, most economists expect the two sides to eventually agree a free trade deal, and medians in the Feb 28-March 5 poll of over 60 strategists said cable would be at $1.32 at the end of March as the divorce is due to take effect – close to the $1.314 it was hovering around on Wednesday.

In six months’ time the pound will have strengthened to $1.35 and in a year to $1.39, the poll found, little changed from a February poll and still significantly below levels it was trading at before the June 2016 referendum vote to leave the bloc.

A separate Reuters poll of economists on Wednesday showed the chance of a no-deal Brexit had fallen to 15 percent, but if the two sides do part ways without agreement, one forecaster predicted sterling could sink as low as parity to the dollar.

While no other respondents were that gloomy, even the most optimistic forecast for no-deal cable was a drop to $1.28.”

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Forex Calm Before ECB meeting, Trump Pushes China Deal

From: Investing.com

Forex traders are paying close attention to the European Central Bank’s (ECB) policy review later on Thursday, to see what it will do to cushion a slowdown in the Eurozone economy. Traders are also keeping an eye on U.S. President Donald Trump’s newfound eagerness to forge a final trade deal with China.

Reuters reported that some traders expect signals from the ECB of a delay in rate hikes until next year and a relaunch of long-term bank loans soon to counteract an economic slowdown.

The U.S. Dollar Index that tracks the greenback against a basket of six major currencies rose by 0.04% to 96.838 by 10:40 PM ET (3:40 AM GMT).

Hope that the trade dispute between China and the U.S. will finally come to an end boosted market sentiment.

On Wednesday, Bloomberg reported that Trump is pushing for a trade deal with China, which could help him with the 2020 re-election campaign. Investors are awaiting a final deal result that could end the year-long trade war between the world’s two biggest economies.

The Australian gained some ground against the dollar as the AUD/USD pair rose 0.15% to 0.7043.

Earlier in the week, the Reserve Bank of Australia (RBA) released disappointing growth data for the last quarter. GDP grew 0.2%, below the 0.3% that had been widely expected. The slower growth has contributed to anticipation of a rate cut this year. The Australian dollar also took a hit last month after the RBA stepped back from a long-standing tightening bias.

The USD/CNY pair inched up marginally by 0.01% to 6.7104. The yuan remained supported by a possible U.S. trade deal.

On top of setting a target band for the 2019 economic growth between 6% and 6.5%, the Chinese government also said at the ongoing annual meeting of the National People’s Congress that the country is cutting taxes and fees by nearly CNY2 trillion ($300 billion) to support various industries.

The People’s Bank of China (PBOC) set the yuan reference rate at 6.7110 versus the previous day’s fix of 6.7053.

Elsewhere, the USD/JPY pair was down 0.04% to 111.71. Soft U.S. data, the dragging Sino-U.S. trade talks and the uncertainty surrounding Brexit are contributing to a risk-off sentiment.

The USD/NZD pair was up 0.21% to 1.4739.

Besides the ECB meeting results, traders are now looking to Friday’s U.S. non-farm payrolls release for February which will point to the strength of the labor market.

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Stock Market News

Huawei Sues U.S. Over Equipment Ban, Escalating Legal Clash

From: Bloomberg.com

  • The Chinese tech giant is taking a more aggressive stance
  • Huawei is hitting back at Washington’s claims of espionage

Huawei Technologies Co. sued the U.S. government for barring its equipment from certain networks, delivering a legal riposte to American accusations it aids China in espionage.

The lawsuit is aimed at a U.S. statute that blocks government agencies from using equipment from Huawei and its domestic rival ZTE Corp., according to a complaint filed in federal court in Texas. Huawei argues in the suit that it’s unconstitutional to single out a person or a group for penalty without a fair trial.

The action signals a more aggressive response from the company toward its U.S. accusers, who have been trying to persuade other countries to ban Huawei gear from crucial fifth-generation communications networks. The complaint landed days after finance chief Meng Wanzhou sued Canada’s government for allegedly trampling her constitutional rights during her December arrest — an effort to discredit the case against her as she awaits potential extradition to the U.S. for bank fraud.

The White House didn’t immediately respond to a request for comment on the lawsuit.

In its U.S. case, Huawei is taking aim at a provision in the 2019 National Defense Authorization Act. That provision bars any executive agency, government contractor or company that receives a government loan or grant from using Huawei and ZTE equipment, according to the complaint. The Chinese company argues that the provision is a bill of attainder, a legislative punishment without trial that’s prohibited by the U.S. Constitution.

“That’s a very hard argument to win but certainly something that they can try in an effort to slow down the federal government,” Peter Henning, a professor at Wayne State University Law School, told Bloomberg on a podcast.

Legal experts give Huawei’s lawsuit little chance of success based on a recent, similar case filed by Moscow-based cybersecurity firm Kaspersky Lab Inc.

In September 2017, the U.S. Department of Homeland Security directed agencies to stop using Kaspersky’s anti-virus software based on concerns the Russian government could use the programs to spy on federal information systems. President Trump signed the ban Dec. 12, 2017.

A Washington DC-based appeals court agreed late last year with a lower court’s rejection of Kaspersky’s argument that the prohibition amounted to an unconstitutional bill of attainder because it addressed a national security vulnerability.

Huawei is increasingly in the crosshairs of the U.S. government and its allies, just as it’s pushing for leadership in supplying fifth-generation wireless technology. Countries are preparing to spend billions on the potentially revolutionary equipment aimed at enabling everything from smart highways to self-driving cars. The world’s top provider of networking gear faces the prospect of being shut out of pivotal infrastructure markets. And the clash has complicated negotiations between Washington and Beijing as they try to hammer out a trade deal.

Huawei also repeated its argument that a blockade on its gear simply disadvantages Americans.

“Consumers in the United States (particularly in rural and poor areas) will be deprived of access to the most advanced technologies, and will face higher prices and a significantly less competitive market,” the company said in the complaint.

Washington-based law firm Jones Day is representing Huawei in the lawsuit.

U.S. officials and industry executives have long harbored questions about Huawei’s ties to China’s government, and concerns about its technology have mounted in lockstep with its growing success. Federal authorities in Seattle are investigating the company for allegedly stealing trade secrets from U.S. partner T-Mobile US Inc., and in December Meng was arrested in Canada on fraud charges linked to Iran trade-sanction violations.

“This is one part of a much broader effort here to confront China over trade secrets theft and how the Chinese government is subsidizing companies and trying to get their products into the United States,” Henning said.

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U.S. stocks lower at close of trade; Dow Jones Industrial Average down 0.52%

From: Investing.com

U.S. stocks were lower after the close on Wednesday, as losses in the Healthcare, Oil & Gas and Industrials sectors led shares lower.

At the close in NYSE, the Dow Jones Industrial Average declined 0.52%, while the S&P 500 index lost 0.65%, and the NASDAQ Composite index fell 0.93%.

The best performers of the session on the Dow Jones Industrial Average were DowDuPont Inc (NYSE:DWDP), which rose 1.47% or 0.79 points to trade at 54.47 at the close. Meanwhile, Walt Disney Company (NYSE:DIS) added 0.75% or 0.85 points to end at 114.85 and Cisco Systems Inc (NASDAQ:CSCO) was up 0.72% or 0.37 points to 51.67 in late trade.

The worst performers of the session were Walgreens Boots Alliance Inc (NASDAQ:WBA), which fell 3.63% or 2.30 points to trade at 61.10 at the close. Pfizer Inc (NYSE:PFE) declined 2.40% or 1.03 points to end at 41.86 and Caterpillar Inc (NYSE:CAT) was down 1.68% or 2.31 points to 134.83.

The top performers on the S&P 500 were LyondellBasell Industries NV (NYSE:LYB) which rose 6.11% to 89.26, Dollar Tree Inc (NASDAQ:DLTR) which was up 5.11% to settle at 100.35 and Aon PLC (NYSE:AON) which gained 4.29% to close at 164.00.

The worst performers were General Electric Company (NYSE:GE) which was down 7.89% to 9.11 in late trade, Signet Jewelers Ltd (NYSE:SIG) which lost 6.91% to settle at 25.85 and Willis Towers Watson PLC (NASDAQ:WLTW) which was down 6.13% to 170.88 at the close.

The top performers on the NASDAQ Composite were Bio Path Holdings Inc (NASDAQ:BPTH) which rose 160.46% to 12.020, OHR Pharmaceutical Inc (NASDAQ:OHRP) which was up 42.86% to settle at 3.100 and Tenax Therapeutics Inc (NASDAQ:TENX) which gained 29.37% to close at 1.630.

The worst performers were SSLJ.com Ltd Class A (NASDAQ:SSLJ) which was down 25.99% to 0.6579 in late trade, Yangtze River Port and Logistics Ltd (NASDAQ:YRIV) which lost 20.28% to settle at 0.58 and Valeritas Holdings Inc (NASDAQ:VLRX) which was down 19.97% to 0.4399 at the close.

Falling stocks outnumbered advancing ones on the New York Stock Exchange by 2292 to 723 and 86 ended unchanged; on the Nasdaq Stock Exchange, 2124 fell and 525 advanced, while 62 ended unchanged.

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Cryptocurrency News

Twitter CEO Jack Dorsey Alludes to Spending $10,000 a Week on Bitcoin

From: Cointelegraph.com

Twitter and Square CEO Jack Dorsey alluded to spending $10,000 per week on Bitcoin (BTC) on the podcast Tales from the Crypt on March 4.

On the podcast, Dorsey spoke on how he came to experiment with Bitcoin and what parallels he sees between Bitcoin and Twitter. Speaking about the “Stacking Sat Saturday” — a trend where users buy $25 in BTC every week to show the growing adoption of cryptocurrencies — Dorsey said that “[he] saw that [Stacking Sat Saturday] on Twitter […] I would have participated but I have already exceeded my limit on CashApp. I can’t purchase anymore.”

Although Dorsey did not specified the exact amount, the maximum weekly buy limit for Bitcoin on mobile payment company Square’s CashApp is $10,000. He further commented that he may be able to join the Stacking Sat Saturday next week, since limits purportedly rotate every week.

Dorsey is known for his belief that Bitcoin is the Internet’s native currency. Dorsey said in an interview with Joe Rogan last month that “[Bitcoin] was something that was born on the internet, that was developed on the internet, that was tested on the internet…It is of the internet.”

Dorsey’s comments on the podcast reaffirmed a previous statement he made in mid-May of last year, when he stated that that virtual currencies are the future of a legitimate means of global payment.

In February, Dorsey revealed that the sole crypto he holds is Bitcoin. When asked about the particular features of Bitcoin that excite Dorsey the most, the Bitcoin bull again pointed at the cryptocurrency’s potential to become a global currency.

Recently, Eugene Kaspersky, the CEO of the cybersecurity giant Kaspersky, stated that he believes that in the future — “perhaps in a 100 years’ time” — the world will be united under a single government, which turn will have a single, digital currency. Kaspersky, however, argued that “cryptocurrencies are a great idea, but the world is not ready for them yet.”

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