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Forex News

Sterling Advances as Lawmakers Grab Brexit Control From May


  • Parliament voted to strip power over Brexit from U.K. leader
  • Sterling advanced, but remained within its recent range

The British pound gained modestly after Parliament wrestled control of the Brexit process away from Prime Minister Theresa May, but the currency remained firmly ensconced within its recent range.

Sterling advanced as much as 0.2 percent to $1.3224 in Asia-Pacific trading Tuesday, before slipping back to around $1.3211 as of 7:50 a.m. in Tokyo.

The move came after the House of Commons voted 329 to 302 to strip power away from May over what happens next in the U.K.’s divorce from the European Union. That paves the way for members of Parliament to demand she pursues radical Plan B options, potentially including a second referendum, keeping the U.K. in the European Union’s customs union, or even canceling Brexit.

Janu Chan, a senior economist at St. George Bank in Sydney, said she doubted that the pound would push substantially higher in the short-term, because there’s a lot of uncertainty and it will be difficult to get majority support for one of the many possibilities.

The U.K. currency had climbed as high as $1.3246 on Monday and has swung within a range of $1.2949 to $1.3381 this month.

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Global strain stirs BOJ debate of more easing in March


Bank of Japan policymakers debated the feasibility of ramping up monetary stimulus at their rate review this month as heightening overseas risks weighed on the country’s fragile economy, a summary of opinions of the meeting showed on Tuesday.

While many in the board maintained their view Japan’s economy continued to expand moderately, some voiced concern over the impact of slowing global demand and the potential hit to consumption from a scheduled sales tax hike in October.

“In the current situation where downside risks are materializing, the BOJ should be prepared to make policy responses,” one of the central bank’s nine board members was quoted as saying.

“If there are concerns that the inflation momentum will be lost, the BOJ should ease policy decisively,” the member said.

Another member said the BOJ must act “pre-emptively” if economic and price developments deteriorate, the summary showed.

Others, however, were more cautious about topping up an already massive stimulus programe. Some said maintaining the current policy was the best approach given the rising cost of prolonged easing, according to the summary.

“In a situation where a virtually zero lower bound exists, there is a possibility the effect of monetary easing via an additional decrease in government bond yields will be limited than before,” one board member said.

At the March 14-15 meeting, the BOJ kept monetary policy steady but downgraded its view on exports and output in a nod to the impact of slowing global growth.

“There’s concern Japan may face growing signs of sliding into recession, depending on the impact of overseas economic developments and the scheduled domestic sales tax hike,” one member was quoted as saying in the summary.

The BOJ faces a dilemma. Years of heavy money printing have dried up market liquidity and hurt commercial banks’ profits, highlighting the rising risks of prolonged easing.

And yet, subdued inflation has left the BOJ well behind its U.S. and European counterparts in dialing back crisis-mode policies, and with a dearth of ammunition to battle any abrupt yen spike that could derail an export-driven economic recovery.

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Stock Market News

Uber announces $3.1 billion deal to buy Middle East rival Careem


  • Uber’s $3.1 billion agreement to buy Careem consists of $1.7 billion in convertible notes and $1.4 billion in cash
  • Dubai-based Careem claims more than 30 million registered users in 120 cities across North Africa, the Middle East and South Asia
  • Uber is approaching a much-anticipated initial public offering that reports have said could value the company at as much as $120 billion

Uber has reached a deal to acquire ride-hailing competitor Careem for $3.1 billion, the companies announced Tuesday.

Dubai-based Careem, founded in 2012, claims more than 30 million registered users and sells car-hailing services in 120 cities across North Africa, the Middle East and South Asia, from Morocco to Pakistan.

The companies characterized the deal as the biggest-ever technology industry transaction in the greater Middle East. Read CEO Dara Khosrowshahi’s email to staff explaining the decision to buy Careem here.

The announcement comes as Uber approaches a much-anticipated initial public offering that reports have said could value the firm at as much as $120 billion. It is expected to be one of the biggest tech IPOs in history.

The acquisition, which remains subject to regulatory approval, consists of $1.7 billion in convertible notes and $1.4 billion in cash. It is expected to close in the first quarter of 2020, the companies said.

Careem has “played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful startups in the region,” Khosrowshahi said in a statement.

He added that the combined company will “deliver exceptional outcomes for riders, drivers, and cities, in this fast-moving part of the world.”

Careem co-founder and CEO Mudassir Sheikha will stay on to lead the Careem business, the companies said. Careem and Uber will continue to operate as independent brands.

Investing in Middle East after Asia pullback

Uber is unprofitable, booking a $1.8 billion loss in 2018. Ahead of its blockbuster IPO, the company is pitching itself as a one-stop shop for transportation and logistics, not just taxi-hailing. The firm’s last big acquisition deal saw it buy U.S. bike-sharing firm Jump.

In the past, international deals have seen Uber exit big markets like China and Southeast Asia, as homegrown giants ate away at its ride-hailing dominance and it became too costly to operate there.

The firm sold its China business to local tech firm Didi Chuxing in 2016 and its Southeast Asia operations to Singapore’s Grab last year in return for equity stakes in the two rivals.

The deal will further solidify Uber’s presence in the Middle East, where one of its big backers, Saudi Arabia’s sovereign wealth fund, is based.

The Saudi Public Investment poured $3.5 billion into the company in 2016. SoftBank’s Vision Fund, another major investor in the Silicon Valley giant, gets most of its investment capital from the PIF.

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Nintendo shares surge following report of new console models


  • Nintendo’s stock started to skyrocket in the morning, surging 4.76 percent
  • The Wall Street Journal reported on Monday that Nintendo is set to release two new versions of its bestselling Switch video game console “as early as this summer.”
  • The report also said electronics maker Sharp was expected to supply liquid-crystal displays for those new models. Shares of Sharp jumped 3.9 percent in afternoon trade

Shares of video game maker Nintendo surged on Tuesday following a report that the company would be releasing new versions of its blockbuster Switch console as soon as this year.

Nintendo’s stock started to skyrocket in the morning to as high as 5 percent, before retracing some of those gains in the afternoon. The stock closed 4.76 percent higher.

The news came after the Wall Street Journal reported on Monday that Nintendo is set to release two new versions of its bestselling console, launched in 2017, “as early as this summer.”

The Journal report, which cited suppliers and developers for Nintendo, said one of the new versions will have improved features aimed at ardent gamers. The other model would be a cheaper variant geared towards casual players, touted as a successor for Nintendo’s hand-held 3DS console, long due for an upgrade as it was launched in 2011.

The two new versions of Switch are expected to be announced in June, with a potential launch coming a few months later, according to the Wall Street Journal.

The report also said electronics maker Sharp was expected to supply liquid-crystal displays for the new variants of Switch. Shares of Sharp jumped 3.98 percent.

Switch, marketed as a hybrid console enabling gamers to play on-the-go and at home when connected to a TV, has been an important revenue driver for Nintendo that turned the company’s fortunes around after its previous flagship model, the Wii U, suffered from lackluster demand.

Based on Nintendo’s track record on the life cycle of previous console upgrades, the possibility of a new version of Switch being released was “quite high,” Takao Suzuki, an analyst at Daiwa Securities, told CNBC in an email.

Kazunori Ito, senior equity analyst at Ibbotson Associates Japan, said it would make sense for Nintendo to launch a cheaper model of Switch, as that would suit its strategy to sell more than one such console per household.

“Overall, I assume that Nintendo’s strategy is to maximize the lifetime of (the) Switch console, and I believe that launching two different version will contribute (towards) achieving the target,” he said.

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Cryptocurrency News

Blockchain Spending in US to Reach $41 Billion by 2025


Blockchain spending in the United States will increase from $3.12 billion to $41 billion by 2025, according to a new report published on March 25.

A new report dubbed the “United States Blockchain Business Opportunities and Outlook Databook Series (2016-2025)” forecasts that blockchain spending in the U.S. will report a compound annual growth rate (CAGR) of 44.5 percent, rising from $3.1 million to $41.1 million by 2025. The report was released by market and research data platform Research and Markets.

The report also reveals that during 2018, blockchain spending in the U.S. increased by 110 percent and reached $1.6 billion. To prepare the report, the company reportedly reviewed market opportunities and risks of blockchain in more than 75 areas spanning 11 industries in the U.S.

Earlier in March, market research firm International Data Corporation (IDC) released a report that projects that global blockchain spending will see rapid growth between 2018 and 2022, with a five-year CAGR of 76 percent, amounting to $12.4 billion in 2022.

In geographic terms, the U.S. is set to see the largest blockchain spending of $1.1 billion, followed by Western Europe and China, which are predicted to invest $674 million and $319 million respectively.

Also this month, economist and notorious cryptocurrency critic Nouriel Roubini argued that blockchain has “nothing to do with” the future of financial services. Roubini excluded blockchain tech from the list of major technologies that will lead to a manufacturing or fintech revolution, including artificial intelligence, machine learning, big data, and the Internet of Things.

Meanwhile, U.S. Acting Under Secretary of State for Economic Growth, Energy, and the Environment, Manisha Singh, said that the agency is currently in the research phase, looking to “better understand” blockchain tech. Singh stated that “blockchain technology is becoming a global phenomenon. It is therefore essential that we better understand this cutting-edge technology, as it becomes more widely adopted in our economy.”

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