August 28, 2019

Daily Market Review – Wednesday, August 28, 2019

Daily Market Review – Wednesday, August 28, 2019

Commodities

As bitcoin enters its 9th week of more-or-less sideways trending with the 12-week EMA preparing to break down, the UK’s controversial National Liberal Party has issued what is being described as the nation’s first “coherent cryptocurrency policy” that would insure owners against fraud or theft and “make the UK a centre of legitimate cryptocurrency finance and not the centre for crypto crimes that it is today.” Taken alongside BoE Governor Carney’s call over the Jackson-Hole Summit weekend on central banks to come together to form a global crypto that could challenge the dominance of the US Dollar as the world’s reserve currency, something aside from Libra and China’s allegedly upcoming e-currency seems to be brewing in the blockchain cosmos. Meanwhile, WTI yesterday added $2 the barrel on a huge 11mB drawdown this past week, and gold lost most of the previous day’s gains during the Asian session, recovering towards the European handover.

Asia

Asian markets were cautiously optimistic but closed in the red this morning, nevertheless. Only the Nikkei 225 ratched up 0.17% as the Yen added 0.03%. Japan’s Finance Minister told reporters yesterday that the recent “spike in the Yen” was cause for concern. Japan is planning a 2% sales tax hike next month. Yesterday, China’s foreign ministry denied reports of a thawing in US-China trade relations, despite Trump’s and China’s deputy prime minister’s declarations to the contrary. Also yesterday, the government issued new directives aimed at boosting consumption. As Hong Kong demonstrators are denied the right to gather outside the offices of Cathay Pacific to protest demonstration-participating staff layoffs, Governor Carrie Lam is reportedly considering invoking emergency powers, which would enable her to authorize summary arrests, deportations, media censorship and changing basic laws. HSBC is now offering low-interest loans for small and medium-size companies impacted by the unrest.

Europe

British parliamentarians are preparing to legislate a delay to Boris Johnson’s no-deal Brexit upon returning to work next week from summer break. Labour leader Jeremy Corbyn has dispatched a letter to 116 MPs, requesting support in the initiative. The pound rose 70 pips on the report but swiftly lost gains as markets opened this morning, as GBP continues a tranquil 2-week uptrend. July’s Mortgage approvals increased beyond expectations in the UK, while Germany continues to provide worrying data, this morning’s import prices declining once again in July. Meanwhile, French consumer confidence exceeded expectations, but business confidence dropped a third of a point to 99.7 in August.

US

With major indexes still closing in the red yesterday, the USD struggles to cross the 98 threshold after the government bond yield inversion yesterday deepened – worsening fears of an upcoming recession. 2-Year bond at yesterday’s auction yields dropped to 1.516% – a 2-year low – while the 10-year is at 1.488%. The Dow dropped 123 points on the sale, as banks and techs plunged southwards. June’s house price index increase fell to 2.1% (S&P/CS), while the Richmond Fed manufacturing Index finally pulled out of negative territory, reading 1 in August, after July’s minus 12.

Corporate

JP Morgan shares added $2 on the share yesterday after the bank announced the sale of its billion-dollar credit card portfolio.

Economic Calendar

Today’s Top Economic Events
TIME/PLACE RELEASE/DATA
11:00 AM GMT – US MBA Mortgage Applications (Aug 23)
14:30 PM GMT – OIL EIA Crude Oil Stocks Change (Aug 23)
17:00 PM GMT – US 5-Year Note Auction
23:50 PM GMT – Japan Foreign Stocks & Bond Investment (Aug 23). Consumer Confidence index (Aug) at 5 AM GMT (+1)
01:00 AM GMT (+1) – NZ ANZ Activity Outlook and Business Confidence (Aug)
01:30 AM GMT (+1) – Australia Private Capital Expenditure (Q2)

For more, visit our Economic Calendar