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Market Review 12-03

Market Review 12-03

Forex News

Pound Rallies as May Gets New Brexit Deal for Parliament Vote

From: Bloomberg.com

  • Sterling climbs as much as 1.1% in Asia before paring gains
  • “It is this deal, or Brexit may not happen at all”: Juncker

The pound advanced for a second day as the U.K. government said it had secured changes to its divorce deal from the European Union and planned to hold a vote in parliament.

Sterling climbed as much as 1.1 percent against the dollar after gaining 1 percent on Monday amid optimism progress is finally being made to resolve the Brexit standoff. European Commission President Jean-Claude Juncker urged the British parliament to approve the deal as he and U.K. Prime Minister Theresa May briefed reporters.

“If PM May gets her deal through, that would be very positive for GBP, but an avoidance of a hard Brexit and an extension would still be good news and see GBP head toward $1.35,” said Rodrigo Catril, a senior foreign-exchange strategist at National Australia Bank Ltd. in Sydney. “We remain optimistic that a hard Brexit will be avoided, and that in our view should put a floor on GBP.”

The pound has rallied 3.5 percent versus the dollar and more 5 percent versus the euro this year, as the market increasingly expects Britain to secure an agreement with the EU over its exit terms. It remains unclear whether the revised deal will satisfy Parliament when it votes late on Tuesday.

May put forward three new documents intended to provide additional legal guarantees that the U.K. can’t be trapped indefinitely inside the current backstop arrangement. The status of these documents will be scrutinized intensively during Tuesday’s debate. The papers include a “unilateral declaration” setting out how the U.K. believes it can escape the backstop.

The new agreement seems to fall “short” of the plan Parliament wanted to see, said Steve Baker, a pro-Brexit member of May’s Conservative Party. A panel of euro-skeptic politicians will examine May’s latest blueprint in detail, he said. May’s Attorney General Geoffrey Cox is expected to set out his formal legal opinion on the changes.

“The situation is very fluid but the market is perceiving hard Brexit scenarios as increasingly unlikely,” said Vassili Serebriakov, a macro strategist at UBS Securities LLC in New York.

Traders are also putting Bank of England’s rate increases back on the agenda. That may see gilts begin Tuesday’s session on a weaker note when trading gets underway in London. As of Monday’s close, sterling money markets were pricing less than 50 percent chance of a rate hike by December.

The pound pared some of its early gains as caution set in to trade 0.4 percent higher on the day at $1.3198 as of 6:26 a.m. in London. Sterling advanced 0.3 percent to 85.27 pence per euro.

The lingering uncertainty is enough for Stuart Simmons, senior portfolio manager at QIC Ltd. in Brisbane, to avoid trading sterling.

“There’s been too many false dawns,” he said. “While the outcome will likely be positive in the long run, the risk-reward just isn’t attractive.”

Read The Full Article Here

When is the Aussie NAB business survey and how could it affect AUD/USD?

From: FXstreet.com

Early Tuesday sees the February month releases of the National Australia Bank (NAB) Business Conditions and Confidence survey results around 00:30 GMT. The headline sentiment gauges gave intermediate strength to the Aussie Dollar (AUD) during early last-month with upbeat figures for January amid dovish tilt from the Reserve Bank of Australia (RBA). With the Australian central bank still holding its bearish bias intact, not to forget rate cut signals from the Governor Phillip Lowe, the business sentiment gauges will be closely observed. Forecasts suggest soft figures to take place in February as Business Confidence may weaken to 3 from 4 prior whereas Business Conditions could also decline to 5 from 7 earlier.

Analysts at Wespact say, “The RBA will be among those watching the Feb NAB business confidence survey at 11:30am Syd/8:30am Sing/HK. In H1 2018, both the headline confidence and conditions indexes were well above long term averages, but both fell substantially in H2 2018. Both ticked up slightly in Jan, the conditions index to +7 (versus a 25 year average of +6) and confidence to +4 (25 year average also +6).”

TD Securites say, “NAB confidence and conditions barely moved in January after the material step down in December. However, with a looming Federal election in May likely to generate a change in government not promoting business-friendly policies, there is little scope for a rebound in the near-term.”

How could the data affect AUD/USD?

In light of latest pessimism surrounding the RBA’s dovish bias and the Governor Lowe’s comments indicating future rate cut, the AUD/USD may have to trim some of its most recent gains if the business sentiment gauges fail to hold their January month strength.

The AUD/USD pair may aim to surpass 0.7110 nearby resistance and rush towards 50-day simple moving average (SMA) of 0.7135 on positive outcomes whereas 0.7050, 0.7020 and 0.7000 are likely immediate supports to watch in case the survey results spread disappointment.

About the NAB Business Conditions survey

The NAB´s Business Conditions released by the National Australia Bank looks at trading, profitability and employment conditions in Australia. It serves as an indicator of overall economic situation in the short term. A high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or bearish).

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Stock Market News

Wall Street snaps five-day losing streak despite Boeing’s drop

From: Reuters.com

U.S. stocks jumped on Monday as the technology sector led a broad-based rebound following five straight sessions of losses, but a fall in Boeing’s shares limited the Dow’s advance after a deadly airline crash in Ethiopia.

Boeing Co, the world’s largest planemaker and best-performing Dow component this year by a wide margin, ended down 5.3 percent at $400.01, registering its biggest one-day percentage drop since Oct. 29, after many airlines grounded the company’s new 737 MAX 8 passenger jet following the second fatal crash involving the aircraft in just five months.

The stock had its highest daily trading volume since July 2013 and ended well off its session low of $365.55, but it kept a lid on the Dow, which managed only about half the gains of the S&P 500.

All the major S&P sectors rose, led by gains in the technology sector, which was up 2.2 percent. The industrial sector reversed early losses to end up 0.9 percent.

“After the weakness in the markets last week, things have gotten a little bit oversold,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

“It was incredibly impressive when you look at what we’re doing today, even with the move in Boeing,” he said, adding that tech’s rally is “a sign of overall enthusiasm for equities and the continued bullish tone we’ve been in since the beginning of the year, last week notwithstanding.”

The Dow Jones Industrial Average rose 200.64 points, or 0.79 percent, to 25,650.88, the S&P 500 gained 40.23 points, or 1.47 percent, to 2,783.3 and the Nasdaq Composite added 149.92 points, or 2.02 percent, to 7,558.06.

The S&P 500 last week registered its biggest decline since the end of 2018 after tepid job and other economic data, but the index is up about 11 percent for the year so far.

Apple Inc rose 3.5 percent after Bank of America Merrill Lynch upgraded the iPhone maker’s shares to “buy.” Also, Apple invited media to a March 25 event at the Steve Jobs Theater on its campus in Cupertino, California.

Sources previously told Reuters that Apple is targeting April for the launch of a streaming television service that will likely include subscription TV service.

Chipmaker Nvidia Corp jumped after entering a $6.8 billion deal to buy Mellanox Technologies Ltd. The Israeli chip designer also rose.

In Washington, President Donald Trump told Congress to slash funding for foreign aid and the State Department and increase spending for the military and the wall he wants to build on the U.S.-Mexico border in his 2020 budget, the opening move in his next funding fight with Congress.

Defense companies General Dynamics Corp, United Technologies Corp and Textron Inc rose on the news.

Advancing issues outnumbered declining ones on the NYSE by a 3.69-to-1 ratio; on Nasdaq, a 3.31-to-1 ratio favored advancers.

The S&P 500 posted 31 new 52-week highs and two new lows; the Nasdaq Composite recorded 57 new highs and 34 new lows.

About 7.1 billion shares changed hands on U.S. exchanges. That compares with the 7.4 billion-share daily average for the past 20 trading days.

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Elon Musk’s lawyers fight back, slamming SEC for ‘unprecedented overreach’ in contempt bid

From: CNBC.com

  • Elon Musk had until Monday to explain why he shouldn’t be held him in contempt of court over a tweet on Feb. 19, published outside trading hours, which the SEC said violated an earlier settlement agreement with the Tesla CEO
  • His lawyers disagreed, arguing that the tweets in question complied with the earlier SEC settlement terms

The lawyers of Tesla CEO Elon Musk shot back at regulators on Monday night, arguing that the Securities and Exchange Commission was broadly overreaching and infringing on Musk’s First Amendment rights by seeking to hold him in contempt of court.

Musk had until Monday to explain why he shouldn’t be held him in contempt of court over a tweet on Feb. 19, published outside trading hours, which the SEC said violated a September settlement agreement with the unpredictable CEO.

His lawyers disagreed, arguing that the tweets in question complied with the earlier SEC settlement terms. They said the CEO “has dramatically reduced his volume of tweets generally and regarding Tesla in particular,” and has been diligent — even self-censoring — in his efforts to comply with the terms of that earlier settlement.

Last September, the SEC sued Musk for a separate tweet on Aug. 7 in which he said Tesla had secured funding needed to take the electric car maker private at $420 a share. That claim wasn’t true, and sent Tesla’s stock soaring initially. Musk later had to walk back the claims.

After that, and as part of a settlement agreement between them, Musk personally paid a $20 million fine. He also agreed to step down as Tesla chairman and to have an appointed in-house attorney vet his tweets, or any other public statements that could affect Tesla’s stock price.

In the recent tweet on Feb. 19 that inspired the contempt proceedings, Musk said, “Tesla made 0 cars in 2011, but will make around 500k in 2019.” The SEC said that tweet was not approved according to the terms of the earlier settlement, and was inaccurate.

Musk’s frequent and sometimes controversial use of Twitter has raised concerns among investors about his fitness to serve as an officer of a public company. Some former SEC attorneys say the agency could suspend him from serving as Tesla CEO.

In the response filed Monday night, Musk’s team said he had taken pains to avoid “unnecessary disputes” with the SEC. They reported that Musk cut his average monthly Tesla-related tweets nearly in half during the three months following his 2018 SEC settlement.

His lawyers also described the SEC’s motion for contempt as a vengeful response to comments the Tesla chief made during a “60 Minutes” interview, in which he said: “I want to be clear, I do not respect the SEC. I do not respect them.”

Musk’s team argued that “this contempt action, following Musk’s sincerely-held criticism of the SEC on 60 Minutes, also reflects concerning and unprecedented overreach on the part of the SEC.”

His lawyers added: “The SEC’s heavy reliance on this interview in its motion for contempt smacks of retaliation and censorship.”

The motion to hold Musk in contempt could be part of a larger strategy the SEC is taking to rein Musk in, Britt Latham, an attorney at Bass, Berry & Sims who litigates securities cases, said last week.

“They are building their case,” Latham said of the SEC. “If they get a violation here, they could get the court to issue an order that puts some more teeth into the consequences of the next violation. Then at some point, given how unpredictable Mr. Musk is, the agency may assume he will hang himself and give them the opportunity to really take some more serious action.”

Read The Full Article Here

 

Cryptocurrency News

US State of Colorado Passes Crypto Exemptions Bill Into Law

From: Cointelegraph.com

The governor of the State of Colorado, Jared S. Polis has signed the “Colorado Digital Token Act” into law, according to a document published on March 6.

The act — which was initially proposed in January and sponsored at the state Senate level by Republican Jack Tate and Democrat Steve Fenberg — provides limited exemptions for securities registration and traders, as well as salesperson licensing requirements for persons dealing in digital tokens.

The bill identifies a “digital token” as “a digital unit with specified characteristics, secured through a decentralized ledger or database, exchangeable for goods or services, and capable of being traded or transferred between persons without an intermediary or custodian of value.”

A previous bill that would govern blockchain tokens was voted down in the Colorado state Senate last May. The bill defined an “open blockchain token” and exempted certain open blockchain tokens from being defined as a security. Some members of the private sector were disappointed with the outcome, wherein Venture capitalist and blockchain investor David Gold said:

“This is an opportunity for Colorado to say, ‘Look, we’re going to provide an environment that provides clarity for the sector. That doesn’t mean charlatans can violate security laws.’ Those who oppose it simply don’t understand it.”

Earlier this month, Senator Jack Tate (R), together with representatives Jeni James Arndt (D) and Marc Catlin (R), filed a bill that tasks the Colorado Water Institute at Colorado State University with studying the potential implementation of blockchain to manage a database of water rights.

In February, Cointelegraph reported that two blockchain-related bills had been passed in the U.S. state of Wyoming. Both bills — one pertaining to the tokenization of assets and the other relating to depositories serving blockchain businesses — were introduced in January this year and will come into effect later in 2019.

Read The Full Article Here

 

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