Theresa May

Market Review 10-01

Market Review 10-01

Forex News

May suffers parliament defeat as Brexit debate resumes

From: Reuters.com

British Prime Minister Theresa May suffered an early defeat to her Brexit plans on Wednesday when parliament demanded the government come up with a plan-B within days if she loses a vote on her deal to leave the European Union.

With less than three months before Britain is due to quit the EU, parliament began a five-day battle over May’s Brexit plan with a show of force – undermining her preferred timetable if lawmakers vote down her blueprint next Tuesday.

May has so far refused to retreat from her unpopular deal, which envisages close trading ties with the EU, but without any say on policy as Britain has now, after leaving in March. Instead, she has pressed ahead with a vote she looks set to lose after failing to win over her nominal Northern Irish allies.

Losing the vote would deepen the uncertainty over the future of Brexit, Britain’s biggest shift in foreign and trade policy for more than 40 years, and open the way for several different outcomes, ranging from a disorderly exit to another referendum.

Lawmakers voted 308-297 on Wednesday in favor of demanding the government come up with an alternative plan within three working days after the Jan. 15 vote, rather than a planned 21-day limit.

There were turbulent scenes in parliament when some in May’s Conservative Party accused the speaker of bias.

Responding to the vote, Brexit minister Stephen Barclay told parliament it was the government’s intention to act quickly if May’s Brexit plan was rejected on Tuesday.

“I also want to reassure colleagues that whatever the outcome of this debate, we will respond rapidly, recognizing that we must provide parliament with as much security as possible,” Barclay said.

But, combined with a vote late on Tuesday when the government lost on the finance bill, the defeats underline May’s precarious position in parliament.

The opposition Labour Party said it will call for a vote of no confidence in the government if May loses on Jan. 15. One of Labour’s top policy team said this would take place immediately, but a spokesman said the timing would be decided as events unfold.

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U.S. Dollar Slips After Fed; China CPI in Focus

From: Investing.com

The U.S. dollar slipped on Thursday in Asia after the Federal Reserve indicated in the minutes of its December meeting that it was willing to hold off on rate hikes amid concerns about global growth and subdued inflation.

Fed members indicated they could afford to be “patient” about future rate hikes, citing a list of concerns including volatility in financial markets, slowing global growth and muted inflation pressures.

The U.S. dollar index that tracks the greenback against a basket of other currencies slipped 0.1% at 94.718 by 12:18 AM ET (05:18 GMT).

“The Fed has acknowledged market concerns with its language. The markets are clearly reading into this as a more accommodative stance,” said Michael McCarthy, chief markets strategist at CMC Markets.

“Optimism on US-China trade talks is also bolstering risk sentiment…the sharp rally in oil prices is also indicative of the fact that global growth fears were probably overdone,” added McCarthy.

China’s Commerce Ministry said in a Thursday morning statement the trade talks with the U.S. that ended yesterday were extensive and detailed, and that both sides agreed to continue to keep in close contact.

The U.S. side also issued a statement earlier in the day. According to the report, China had pledged to purchase “a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States.”

The USD/CNY pair traded 0.4% lower to 6.7910 as the People’s Bank of China (PBOC) set the yuan reference rate at 6.8160 vs the previous day’s fix of 6.8526.

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Stock Market News

Jaguar Land Rover to make ‘substantial’ job cuts after China, diesel slump: source

From: Reuters.com

Britain’s biggest carmaker Jaguar Land Rover (JLR) is set to announce “substantial” job cuts in the thousands, a source told Reuters, as the company faces double-digit drops in demand in China and a slump in sales for diesel cars in Europe.

The company builds a higher proportion of its cars in Britain than any other major or medium-sized carmaker and has spent millions of pounds preparing for Brexit, in case there are tariffs or customs checks.

JLR swung to a loss of 354-million pounds ($450 million) between April and September and had already in 2018 cut around 1,000 roles in Britain, shut its Solihull plant for two weeks and announced a three-day week at its Castle Bromwich site.

The Tata Motors-owned company has unveiled plans to cut costs and improve cash flows by 2.5 billion pounds including “reducing employment costs and employment levels.”

Those cuts will be “substantial” and run into the thousands, the source told Reuters.

“The announcement on job losses will be substantial, affecting managerial, research, sales, design,” said the source, who spoke on condition of anonymity.

Production-line staff will not be affected “at this stage,” said the source.

The company declined to comment when contacted by Reuters.

JLR, which became Britain’s biggest carmaker in 2016, had been on course to build around 1 million vehicles by the turn of the decade, but output in 2018 looks set to have fallen as sales in the first eleven months dropped 4.4 percent.

Sales in China between July and September fell by 44 percent, the biggest slump of any market for the central England-based firm, turning the country from its biggest sales market to its smallest.

Its chief financial officer said in October that the firm’s Changshu plant in China “has basically been closed for most of October in order to allow the inventory of both our vehicles and dealer inventory to start to reduce.”

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Dow Extends Rally as Fed’s Minutes Signal Slower Hikes

From: Investing.com

Wall Street rallied on Wednesday as the Federal Reserve’s December meeting minutes reaffirmed investor expectations that the central bank will likely rein in rate hikes.

The Dow Jones Industrial Average rallied for a fourth-straight day and closed 0.39% higher. The S&P 500 added 0.41%, while the Nasdaq Composite jumped 0.87%.

A sea of green washed over Wall Street on receding worries the Fed may overshoot on policy, after the minutes from the December meeting showed the central bank was willing to “be patient about further policy firming.”

The Fed’s somewhat dovish outlook was driven by the “volatility in financial markets and the increased concerns about global growth,” the minutes showed.

Beyond the Fed, the market was supported by rising energy stocks as oil prices soared after Saudi Arabia confirmed it would continue to cut output, while optimism on U.S. and China trade also lifted sentiment.

U.S. Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs Ted McKinney said he thought the recent round of trade talks “went just fine.”

Caterpillar (NYSE:CAT) and Boeing (NYSE:BA), widely viewed as bellwethers for trade given their large international exposure, ended the day higher, supporting industrials and the broader market.

The U.S. has slapped tariffs on $250 billion worth of Chinese goods, about half the value of U.S. imports from the country, and many hope the recent talks could lead to a deal, or at the very least stave off the threat of further escalation.

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Cryptocurrency News

Crypto Mining Malware Has Netted Nearly 5% of all Monero, Says Research

From: Coindesk.com

Monero (XMR) is by far the most popular cryptocurrency among criminals deploying mining malware, according to a new study.

Two researchers, Sergio Pastrana and Guillermo Suarez-Tangil, from Universidad Carlos III de Madrid and King’s College London, respectively, published their report last week, estimating that hackers have mined at least 4.32 percent of the total monero in circulation.

Pastrana and Suarez-Tangil write:

“Overall, we estimate there are at least 2,218 active campaigns that have accumulated about 720K XMR (57M USD). Interestingly just a single campaign (C#623) has mined more than 163K XMR (18M USD), which accounts for about 23% of the total estimated. This campaign is still active at the time of writing.”

The researchers, however, are not sure whether, or what portion, of malware owners have cashed out their crypto, due to lack of information and the fluctuating prices of cryptos. At press time, the value of the XMR total cited is almost $40 million.

Around 4.4 million malware samples were analyzed over a 12-year period from 2007 to 2018, and and 1 million malicious miners were identified, the paper says.

Tactics adopted to distribute malware varies, but the pair say that a “common yet effective approach is to use legitimate infrastructure such as Dropbox or GitHub to host the droppers, and stock mining tools such as claymore and xmrig to do the actual mining.”

After monero, which the pair said is “most prevalent,” bitcoin came in at second favorite crypto for illicit mining, though its popularity has decreased over the years. Bad actors also experimented with other altcoins such as dogecoin or litecoin during 2013 and 2014 and then shifted back to bitcoin and monero, probably because these are more profitable, the researchers suggest.

Of the malware-associated wallets identified by the team, monero was 56 percent more represented than bitcoin, while zcash came in third place.

More generally, instances of crypto-mining malware increased by well over 4,000 percent last year, according to research from McAfee published in December – growth that saw it rapidly overtake the previous favorite, ransomware, over the period.

Back in November, research from Israel-based cybersecurity firm Check Point Software Technologies showed that a monero mining malware, dubbed KingMiner, is evolving through time to avoid detection.

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