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Asian Market Update – Monday: Bitcoin surges after futures debut; Asian stocks higher on improved sentiment

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Bitcoin futures

The Big Question: How will futures trading affect bitcoin?

Bitcoin posted a huge surge on Monday morning in Asia, after futures contracts began trading on the CBOE Futures Exchange in Chicago on Sunday evening US time.

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On Coinbase, the price of bitcoin gained more than $2,000 in a strong upswing to close to $16,800 before falling back slightly. At midday in Hong Kong, the cryptocurrency was still up about 9 percent to 16,670 in very active trading.

On CBOE, the front-month bitcoin futures contract surged past $17,000 on Monday morning Asian time, according to Reuters.

The debut of bitcoin futures on the CBOE Exchange marks a key step for bitcoin towards adoption in mainstream finance that could boost its legitimacy and acceptance. However, some are worried that serious fluctuations could follow now that the big boys are in on the bet.

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Meanwhile, ethereum was trending up nicely during the Asian trading session on Monday. The cryptocurrency gained 3.89 percent at midday to $464 after losing about $23 in overnight trading.

Litecoin surged nearly 5 percent to $158 at midday, after losing about $9 on Sunday.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,871 0.26%
China-Shanghai Composite Index 3,303 0.40%
Hong Kong –Hang Seng 28,784 0.50%
South Korea-KOSPI 2,466 0.12%
Australia-ASX 200 5,999 0.08%
S&P 500 E-Mini Futures 2,656 0.08%

Major Asian equities were pointing higher in somewhat subdued trading on Monday morning, led by gains in Hong Kong and on the Chinese mainland.

In Hong Kong, the Hang Seng Index edged up 0.50 percent to 28,784 at midday after opening flat. On the Chinese mainland, the Shanghai Composite Index also moved up 0.40 percent to 3,303.

Both Hong Kong and mainland markets have had a couple weeks of increased volatility and lower prices following tighter regulations from mainland officials. Still, recent data for foreign trade, consumer inflation, foreign investments, etc. suggested that the Chinese economy remains stable and sound, which could boost business sentiment.

Markets in Japan also moved up, though only slightly. The Nikkei 225 Index gained 0.26 percent to 22,871 before midday on Monday.

In South Korea, the Kospi was 0.12 percent higher to 2,466 at midday.

Down under, the ASX 200 was up a slight 0.08 percent to 5,999 at midday.

The S&P 500 E-Mini Futures was up 0.08 percent to 2,656.

Investors’ risk appetite appears to be improved by positive economic data out of China, Japan and other key economies, an agreement between US political parties that avoided a government shutdown, and progress in tax reform negotiations in the US, among other things.

Important events that the market is watching this week include meetings of the US Fed and the ECB, Brexit talks, NAFTA negotiations, and the first week of bitcoin futures trading.

Currencies

The Japanese yen lost 0.12 percent against the US dollar at midday Monday, changing hands at 113.58 per dollar.

The Chinese yuan firmed 0.06 percent against the US dollar to 6.6155 per dollar.

The Australian dollar added 0.17 percent on the dollar, changing hands at 1.3290 per dollar at midday.

Commodities

WTI Oil was down 0.4 percent to $57.07 per barrel.

Brent Crude was off 0.35 percent to $63.09 per barrel.

Gold was up 0.04 percent to $1,248 an ounce.

News across Asia

In China, Monday marks the 16th anniversary of the country joining the World Trade Organization, which opened the Chinese market to foreign goods and services as well as foreign markets to China. However, China has now filed a suit against the EU and the US for not granting China status as a ”market economy.”

Take away: China has pledged more market access for foreign companies, but the EU and the US are hardly satisfied. The WTO is now hearing the case filed by China, and its decision could have long-last implications for global trade.

In Japan, large Japanese manufacturing companies’ sentiment about economic conditions has improved in the fourth quarter of the year, the official Business Survey Index out on Monday showed. The BSI for large manufacturers came in at 9.7, up from 9.4 in the previous quarter.

Take away: Japanese manufacturing companies have taken a heavy hit after a series of data cheating scandals, but the latest data showed economic growth is robust, and largely held up by demand from overseas.

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 28 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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2 Comments

2 Comments

  1. sorinmax

    December 11, 2017 at 10:42 am

    “The Big Question: How the will futures trading affect bitcoin?”
    or maybe it’s the other way around, like
    How will the futures trading

    • Fredrik Vold

      December 11, 2017 at 12:35 pm

      Updated. Thanks for pointing that out!

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Market Overview

Market Update: Dow Jones Sinks 400 Points as Government Bond Yields Top 3%

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U.S. stocks plunged on Tuesday, with the Dow Jones Industrial Average sinking more than 400 points as rising government bond yields drove investors into risk-off mode.

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Stocks Plunge

The Dow blue-chip index plunged 424.56 points, or 1.7%, to close at 24,024.13. That marked the fifth consecutive decline and the lowest settlement in almost three weeks.

Twenty-four of 30 index members recorded losses, with Caterpillar Inc. (CAT) and 3M Co (MMM) falling more than 6% apiece.

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Caterpillar reported first-quarter earnings that were well above expectations but indicated that economic growth will slow for the remainder of the year.

The broader S&P 500 Index closed down 1.3% at 2,634.56, with nine of 11 sectors reporting declines. Industrials plunged 2.8%; while materials declined 2.6%. Heavy losses were also reported for IT, consumer discretionary and energy stocks.

The technology-heavy Nasdaq Composite Index declined 1.7% to 7,007.35.

A measure of implied volatility known as the CBOE VIX surged more than 10% on Tuesday to settle at 18.02. The so-called “fear index” trades on a scale of 1-100, with readings below 20 usually indicating calmer conditions for Wall Street. Despite its current reading, the VIX has been anything but calm in recent months, having reached a high above 50 in early February.

Interest Rates Rise

A sharp rise in government bond yields has been one of the major catalysts for the recent downturn in the market. The yield on 10-year U.S. Treasury notes climbed above 3% on Tuesday for the first time since early 2014.

Investors have been selling Treasurys throughout April – pushing the yield higher – amid expectations of tighter monetary policy from the Federal Reserve. Policymakers are said to be eyeing at least two more interest rate hikes this year to combat rising inflation.

The pressure from inflation will likely strengthen due to tax cuts and infrastructure spending. The Fed targets consumer price growth at 2% annually and uses a measure called the core PCE index to evaluate inflationary trends. The core PCE index strengthened to 1.6% in March, the biggest gain since February 2017.

Cryptocurrency Rally Accelerates

The cryptocurrency market shifted into high gear on Tuesday, with bitcoin and the broader altcoin universe adding $35 billion. At the time of writing, the cryptocurrency market was worth a combined $433.4 billion, according to CoinMarketCap. That’s the highest level since early March.

Bitcoin’s value continued to rise, but its overall share of the market fell to around 37%. BTC rose more than 6% to $9,463, bringing its total market cap to $160.8 billion.

Ethereum added more than 10% to $705. Ripple XRP gained 7.5% to $0.937. Bitcoin cash also extended its winning streak, rising 5.4% to $1,466.

Double-digit gainers included EOS, which surged more than 37% to $15.85, and Cardano, which added 10.5% to $0.316.

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 352 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

Pre Market: Dollar Pulls Back from 7-Week High as Stocks Rebound

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Global equities are attempting to rally after drifting lower for three sessions, with Asia leading the bounce thanks to rumors regarding possible monetary easing steps in China. The rumors surfaced on the heels of the Yen’s plunge which followed Bank of Japan governor Kuroda’s dovish words. Mr. Kuroda is worried about the stubbornly low inflation rate, and hinted on a delay of the ”normalization” process of the central bank’s monetary policies.

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USD/JPY, 4-Hour Chart Analysis

As a reminder, the BOJ now owns the majority of the stock ETFs in Japan, but we might reach a point where it will own the whole float (why not?), while also technically controlling the whole Japanese government bond “market”. Meanwhile, the Euro also got under pressure lately thanks to the string of negative economic surprises and Mario Draghi’s cautious words regarding growth, and with Thursday’s ECB meeting looming, forex traders could be in for a very active week of trading.

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EUR/USD, 4-Hour Chart Analysis

The Dollar reached a 7-week high against the Euro yesterday, while the Dollar index closed at the highest level since January, and although the Greenback is correcting the recent rally today, it seems that the growing number of Dollar bears might be in for more pain after a likely short-term correction, as Treasury yields continue to rise relentlessly.

US 2-Year Treasury Yield, 4-Hour Chart Analysis

Stocks are having a relatively quiet week so far, but the bearish trend of the recent sessions remains dominant despite today’s bounce, even as volatility is still low, and trade war fears and geopolitical tensions have been easing somewhat lately. We switched to a bearish bias last week, and we maintain that the stocks look vulnerable here, although the short-term overbought readings have been cleared.

S&P 500, 4-Hour Chart Analysis

Bulls still have the hope that the major US indices can resume the recovery and launch a rally towards the all-time highs, but unless we see a quick move above last week’s highs, bears remain in control, and another test of the correction lows is likely.

On a slightly positive note, European equities enjoyed some relative strength in the last couple of days, as they were boosted by the weakness in the Euro, but looking at the broader picture, the Old Continent continues to be among the weakest regions globally since the start of the correction.

Commodities Mixed but Commodity Currencies Still Weak

AUD/USD, 4-Hour Chart Analysis

Interestingly, the Aussie and the Canadian Dollar are still under selling pressure today, despite the risk rally, and that fact strengthens our short-term bearish view on stocks, as they have been reliably leading equities since February.

In the meantime, commodities have been trading in a choppy fashion amid the Dollar rally, as gold has been pushed back below $1330 again, continuing its lengthy consolidation phase, while crude oil slightly retreated from its multi-year high near the $70 per barrel level concerning the WTI contract.

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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Market Overview

Takes a lot of GUTS – Making Blockchain Mainstream

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Take a guess… What do all of these people have in common?

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They all have Ethereum wallets and don’t even know it.

The new GET protocol is designed to use blockchain as an engine and run seamlessly in the background without the end user ever knowing what powers the application.

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The GUTS ticketing app is the first mainstream application to use GET and the people in the above photo are the first 1000 users. It’s estimated that more than 1 million people in the Netherlands will use it to securely purchase tickets without the fear of scalpers.

Welcome to the future!

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Global Selloff Pauses for Earnings
  • EOS is now available in eToro!
  • Cryptocurrency Future in India

Please note: All data, figures & graphs are valid as of April 24th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

The global stock rout that we’ve been seeing since early February is seemingly on hold for the time being.

Earnings season is going great, and why wouldn’t it? Donald Trump’s recent tax cuts and economic stimulus seem to be spurring the economy and adding to corporate profitability as designed.

Some economists, like Alice Rivlin of the Brookings Institute, argue that all this stimulus is coming at the wrong point in the economic cycle. Usually, countries try to stimulate the economy when it is doing poorly but when it is doing well they want to tighten things up and save the surplus for a rainy day.

As long as earnings are good, stocks should rise. The question then is what happens when earnings season is over?

The Nasdaq100 has managed to defend its position at the 200 day moving average (blue) and has since rallied a bit but it doesn’t seem like we’re quite out of the woods just yet.

Introducing EOS

eToro is very proud to announce that we have added EOS as the tenth cryptocurrency available on the platform. Of the 2000+ assets that you can trade on the platform this one is one of the most interesting.

If Bitcoin is digital gold and Ethereum is digital oil, EOS has been likened to digital real estate.

The ICO is ongoing and set to last an entire year ending on June 1st, 2018. In the end there will be a total of 1 Billion EOS in the world.

By owning EOS one token you are entitled to one billionth of the computing power of the total network. Unlike other utility tokens, EOS are not burned in the transactions. So owners will be like landlords of their space on the network.

Proponents say that this is the next level for blockchain after Ethereum and is designed to be an operating system for decentralized applications. With it, developers will be able to create apps that utilize blockchain without the end user ever knowing the intricacies of the supporting technology.

The price is up 17% since the asset has been added on the platform and up more than 100% over the last month knocking out Litecoin for the number 5 slot of all cryptocurrencies by market cap.

As with all cryptos, EOS is still in the experimental phase and as such carries a significant degree of risk.

Always diversify your portfolio with many different types of assets and not just cryptocurrencies, please.

Cryptos in India

Lastly, I’d like to thank those users yesterday, especially in India, who quickly replied to clarify a tweet I sent out regarding the RBI’s decision to ban cryptocurrencies.

To be clear, the high court has given the RBI 48 hours to respond to the claim that their new policy is unconstitutional. This happened on Sunday so their response is actually due today.

Unfortunately, this isn’t over just yet and from what it seems the court could take further time to sort this out. We hope for a quick and positive resolution in this high stakes case.

A reminder to ever rely on a single source of information. Always do your own research. 😉

Have an excellent day ahead!

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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4.6 stars on average, based on 70 rated postsSenior Market Analyst at Etoro.com.




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