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Asian Market Update – Friday: Coins Plummet; Asian Stocks See Moderate Gains

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Falling

The sky is falling for bitcoin cash.

All the main coins tumbled on Friday morning, with major losses seen in ethereum, litecoin bitcoin, and bitcoin cash.

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Litecoin saw the largest drop as of midday Friday. The cryptocurrency was down 19 percent to $252. On Coinbase, litecoin dropped to as low as $202 right before midday. So far this week, litecoin prices has lost over 30 percent, following a 111 percent gain in the previous week.

Ethereum also saw heavy losses Friday morning, trading down by 18 percent to $655 after midday in Hong Kong. The virtual currency dropped to a low of $620 in earlier trading.

Bitcoin extended losses for a sixth consecutive day on Friday morning, losing 15 percent to $13,400 after midday in Asia. On Coinbase, the virtual currency dropped to as low as about $12,710 at one point. Since Sunday, bitcoin has lost about 30 percent, which is a correction, but still not an extreme move for the highly volatile bitcoin.

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Bitcoin cash also plunged 37 percent on Friday morning to below $2,000 after midday. The price of bitcoin cash lost 17.8 percent on Thursday, following a 36.3 percent gain on Wednesday.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,865 0.00%
China-Shanghai Composite Index 3,303 0.11%
Hong Kong –Hang Seng 29,444 0.26%
South Korea-KOSPI 2,478 -1.96%
Australia-ASX 200 6,071 0.19%
S&P 500 E-Mini Futures 2,690 0.10%

Major Asian equity markets posted fractional gains on Friday, while stocks in South Korea tumbled and the Nikkei remained flat.

In South Korea, the Kospi lost 1.96 percent to 2,478 at midday. Though tensions on the Korean Peninsula have been stable, South Korea’s relationship with China have soured after the deployment of the US THAAD anti-missile defense system earlier this year. Companies that have major business operations in China, including supermarket operator Lotte Group have suffered badly as a result. The tourism and retail sectors in South Korea have also taken a hit as a result of much lower numbers of Chinese tourists, after Chinese tour operators were banned from organizing trips from South Korea.

In Japan, the Nikkei 225 Index hovered around the flat line at 22,865 at midday, even though the Japanese government on Friday morning approved a budget with record high government spending for next year, expected to further boost economic growth in the Land of the Rising Sun.

On the Chinese mainland, the Shanghai Composite Index edged up 0.11 percent at midday on Friday to 3,303. In Hong Kong, the Hang Seng Index moved up 0.26 percent to 29,444 as of midday.

Down under, the ASX 200 was up 0.19 at 6,071 after midday.

The S&P 500 E-Mini Futures was up 0.20 percent to 2,690.

Markets were also digesting the passage of the US tax bill in Congress, which is now expected to be signed into law by President Trump on January 3. Additionally, the US economy grew 3.2 percent in the third quarter, though that’s still below the expected 3.3 percent. Growth appears to remain robust in the world’s largest economy.

Currencies

The Japanese yen was flat against the US dollar at midday Friday, changing hands at 113.32 per dollar.

The Chinese yuan firmed 0.17 percent against the US dollar at 6.6520 per dollar.

The Australian dollar also firmed 0.12 percent on the dollar, changing hands at 1.2966 per dollar at midday.

Commodities

WTI Oil was down 0.03 percent to $58.19 per barrel at midday on Friday.

Brent Crude was up 0.14 percent to $64.82 per barrel.

Gold lost 0.05 percent to $1,265 an ounce.

News across Asia

In China, the Ministry of Commerce on Thursday protested a decision from the EU to change a “non-market economy list” on its anti-dumping laws to “significant market distortion,” which would make it easier for the EU to launch anti-dumping investigations against Chinese product. The Chinese commerce ministry said the decision is “unfair” and “runs counter to WTO rules.”

Take away: Though China-EU trade ties have been largely stable, apart from disputes in the steel and solar panel sectors, the tension is certainly rising and could jeopardize future cooperation.

In Japan, the Japanese government approved a record spending of $860 billion for fiscal year 2018/19 on Friday. Coupled with its decision on Thursday to leave the low borrowing costs unchanged, the move points to the Japanese government’s determination to further boost economic growth in the new year.

Take away: Though economic conditions have been improving for the world’s third-largest economy, constantly missed inflation targets pose challenges for the BOJ. 

Featured image from Pixabay.

Disclaimer: The author owns bitcoin, ethereum and litecoin. He holds investment positions in the coins, but does not engage in short-term trading.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.3 stars on average, based on 33 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




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Market Overview

Market Update: Stocks Slide as U.S.-China Trade War Risks Reemerge

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U.S. stocks declined Friday, with the Dow briefly falling more than 200 points after the Trump administration moved ahead with planned duties on Chinese goods, reigniting fears of a global trade war.

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Stock-Rally Falters

Risks of an all-out trade war dragged equity prices lower, with all of Wall Street’s major indexes posting declines. The Dow Jones Industrial Average fell 84.83 points, or 0.3%, to 25,090.48 with the likes of Caterpillar Inc. (CAT), and Chevron Corp (CVX) leading the declines.

The broader S&P 500 Index fell 0.1% to 2,779.42, with the majority of its primary sectors booking losses. Industries tied to primary goods were among the biggest decliners.

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The Nasdaq Composite Index fell from record levels, declining 0.2% to 7,746.38.

Implied volatility, as measured by the CBOE VIX, rose briefly on Friday before reversing gaind later in the session. The VIX fear index settled below 12 on a scale of 1-100 where 20 represents the historic average.

Trump Announces Tariffs

The Trump administration is moving forward with a plan to tax up to $50 billion in Chinese goods, sending a strong signal to Beijing that it will no longer tolerate theft of intellectual property.

A charge of 25% will be applied to Chinese goods that “contain industrially significant technologies,” President Trump announced Friday. The measures come “in light of China’s theft of intellectual property and its other unfair trade practices.”

Beijing responded swiftly by announcing it will implement import duties on the same scale as Washington. Neither country commented on the products that will be impacted.

China’s response was expected by President Trump, who said he would impose more tariffs if Beijing retaliates. Currently, the U.S. purchases far more from China than the other way around, which gives Washington some leeway in its tariff policy.

Investors are generally averse to any sign of protectionism in global markets, but this hasn’t stopped the Trump administration from recalling several of its current trade regimes in an effort to trim Washington’s deficit. Last  month, President Trump confirmed that Canada, Mexico and the European Union would be subject to import duties on steel and aluminum products.

Cryptocurrencies Stabilize After Tumultuous Week

The global cryptocurrency market stabilized Friday, as bitcoin rebounded from oversold levels and altcoins led by EOS reported gains.

All cryptocurrencies in circulation are collectively valued at $282.5 billion, according to CoinMarketCap. The market bottomed near $264 billion on Wednesday.

A top U.S. regulator delivered good news for cryptocurrency traders when he declared Ethereum not to be a security. Speaking at the Yahoo All Markets Summit event in San Francisco Thursday, SEC director William Hinman said Ethereum is too decentralized to be a security, which means it is in the same category as bitcoin.

The SEC has yet to issue a formal decree on Ethereum and it is not entirely clear whether a federal judge will agree with Hinman’s assertion. Advocates for Ethereum have rejoiced nevertheless given the ongoing debate over ether’s possible security status.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 453 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Analysis

Stocks Pull Back as Euro Rebounds after Carnage

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Stocks are broadly lower today after yesterday’s mixed session, as European equities, which performed much better following the ECB’s meeting, also turned lower, following the major US indices. The losses are limited, as volatility remained relatively low, despite the week’s central bank bonanza that caused turmoil across asset classes.

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NASDAQ, 4-Hour Chart Analysis

The NASDAQ is still the strongest among the main benchmarks, while the Dow is the weakest, dragged lower by the weakness in financials and the energy segment. Small caps are still outperforming the broader indices together with tech stocks, and Trump’s new tariffs targeted at China boosted the segment yet again today.

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EUR/USD, 4-Hour Chart Analysis

The EUR/USD forex pair has been in the center of attention in the last couple of days as expected, while currencies turned volatile across the board in the aftermath of the Fed’s and the ECB’s monetary meetings. The Dollar index surged higher, boosted by the weakness of the common currency and after a brief positive period that weighed somewhat on stocks and other risk assets.

Economic releases were mixed today after a strong weak, at least in the US, as the Empire State Index and the UOM Consumer Sentiment Index were better than expected while Industrial Production slightly missed the consensus estimate. The Eurozone CPI was in line with expectations, while Canadian Manufacturing Production missed by a mile, putting further pressure on the already weak Canadian Dollar.

Commodities Smacked Lower amid Risk-Off Shift

Currencies were by far the most active assets, as we expected after the dovish surprise by the ECB yesterday, with the Dollar’s strength affecting the majors and the recently weak emerging market currencies as well.

USD/TRY, 4-Hour Chart Analysis

The initial bullish reaction in commodities and emerging currencies quickly faded, as the fragility of the most vulnerable countries continues to pose contagion risk, and although the Brazilian Real and the Turkish Lira are both above their recent lows, the charts still look dangerous.

WTI Crude Oil, 4-Hour Chart Analysis

The Dollar’s strength put an end to oil’s bounce, as the WTI contract fell back below the $65 per barrel level, while gold is also testing its lows from May. Oil looks bearish before next week’s OPEC meeting, but the outcome of the event is as hard to predict as ever, especially given the recent volatility in the price of the Black Gold.

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 276 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Market Overview

Draghi Scores & Cryptos Celebrate

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Hi Everyone,

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Finally some much-needed clarity!

Just when some feared all was lost and crypto prices were showing signs of a potential plunge, some exciting news was delivered from the SEC in the United States, bringing with it the kind of optimism that we haven’t seen in months.

The crypto markets are now celebrating and have given a strong push off the lows.

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It seems the title of yesterday’s daily market update “A Crypto U-turn” was more appropriate than originally intended.

Let’s examine the impact of the SEC’s decision below.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Draghi Scores a Goal
  • Tiki-taka Stocks
  • Ethereum Uncertainty Removed

Please note: All data, figures & graphs are valid as of June 15th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

It was a perfect play by the European Central Bank. They’ve been worrying for months about the strength of the Euro and finally, at the 90th minute, they managed to pull off a power play that brought the ball all the way to the goal line.

The timing was impeccable. On Wednesday, the ECB’s counterpart in the United States announced a more aggressive monetary policy and plans to raise their interest rates more rapidly than expected.

At the same time, a decision was expected from the ECB to end their “money printing” stimulus package very soon.

During the press conference yesterday, the ECB not only confirmed the market’s expectations by announcing an end to the stimulus as of September but they also surprised everyone by indicating that they will not be raising their interest rates until the summer of 2019.

See, while everyone was concentrating on the striker (stimulus) and expecting him to kick the ball into the goalkeeper’s hands, he actually kicked it to his teammate (interest rates) who nobody was watching.

They haven’t quite won the match just yet though. Looking at the chart of the EURUSD, we can see that they failed to carry the Euro below the critical level of $1.15 and therefore any further downward pressure will be difficult to maintain.

Tiki-taka Stocks

The new policy divergence doesn’t seem to be affecting the stocks too much and with the US trade war expected to be notched up today, it seems they have other things on their mind.

Here’s a graph of the Dow Jones, which has been moving back and forth for most of this year without any real progress. Notice how it’s just taken a turn downward, towards the 50-day moving average (blue line).

Crypto Celebration!!!

The reaction from the crypto market yesterday was one of delayed gratification. In the United States, the authorities have been particularly ambiguous about the legal status of cryptocurrencies over the last few years.

While it was rather clear that Bitcoin itself should not be classified as a “security” the status of coins like Ether and Ripple’s XRP has remained a question. If a token is considered a security, it has some rather extreme implications for any person or business who traded it, including sizable fines and even the possibility of jail time for hodlers.

So, yesterday’s headline was certainly a cause for celebration.

The reaction was quick and clear across the entire crypto industry. Here we can see all of the cryptocurrencies traded on the eToro platform

Even though gravity does seem to be getting the better of the cryptos this morning, the announcement couldn’t have come at a better time. Here we can see the long-term chart of Ethereum and the beautiful bounce off the long-term trend line that the news has caused.

Now that Amecia seemingly has the freedom and security to trade Ether, this paves the way for big institutions like the CBOE and others to add Ethereum futures to their crypto offerings.

Let’s have a fantastic weekend!!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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