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Market Overview

Asian Market Update – Monday: Coins gain on positive news from government, tech giants

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Bitcoin bull run

The Big Question: Are coins ready for another bull run?

Prices of cryptocurrencies pointed higher overnight during the Asian trading session Monday, as positive news out of Canada, Estonia and tech giants such as Google and Facebook have likely eased investors’ concerns following blows from China last week.

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Before midday, the price of bitcoin climbed 3.82 percent to $3,802. Having surged from around $3,660 during early morning trading, the digital coin was still pointing higher around midday in Asia.

The ethereum price saw an even larger increase on Monday morning, gaining more than 10 percent at one point before falling back to 8.60 percent to $279. The ethereum price surged from about $256 to $283 at one point. The digital currency has now been in an uptrend for two straight days.

The gain in bitcoin and ethereum prices on Monday morning followed scores of positive news from governments in Estonia and Canada.

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In Estonia, officials struck a positive tone toward initial coin offerings, the exact opposite of what we saw out of Beijing, where officials banned ICOs. The Estonian government is reportedly mulling to raise funds through ICOs.

In Canada, while warned against risks, officials generally signaled that tokens are acceptable, as they advised that those who intend to issue ICOs to reach out to local securities regulators to discuss it. Though the Canadian government did not explicitly spell out its support, the move could be seen as a way of giving a green light to ICOs.

Also, some tech giants such as Microsoft, Google, Facebook, Apple and Mozilla have reportedly developed a browser interface that accepts cryptocurrencies when making purchases online.

If the companies went ahead with the interfaces, it would expand the use of cryptocurrencies and likely drive up the demand and thus prices.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
China-Shanghai Composite Index 3,363.40 0.29%
Hong Kong –Hang Seng 28,088.85 1.01%
Australia-ASX 200 5,725.90 0.54%
South Korea-KOSPI 2,411.43 1.06%

Major Asian indexes shrugged off earlier losses and started off the week on a positive note Monday morning.

In Greater China, the Shanghai Composite Index skidded 0.29 percent to 3,363. before midday. In Hong Kong, the Hang Seng Index surged 1.01 percent to 28,088.

In South Korea, the KOSPI index gained 1.06 percent to 2,411.

Down under, the ASX 200 climbed 0.54 percent to 5,725.

In Japan, the Tokyo Stock Exchange was closed Monday for a public holiday.

The gains in Asian stocks on Monday followed a week of turmoil, as geopolitical tensions on the Korea Peninsula continued brewing, with North Korea constantly threatening war with South Korea, the US and Japan, and firing off missiles.

Though investors should be used to North Korea missile launches by now, stocks still suffer for at least a short period every time the rogue regime makes a move.

However, it seems investors are now more concerned with monetary policies. This week all eyes are on the meeting of the US Federal Open Market Committee (FOMC), as markets are looking for clues on direction of US monetary policies. The meeting will be held on Thursday.

Currencies

The Japanese yen lost 0.44 percent against the US dollar at Midday on Monday. The USD/JPY rate was at 111.18. The greenback has been in an uptrend against the yen since Friday.

The Chinese yuan strengthened 0.04 percent to 6.5474 per dollar, shooting down expectations that the yuan would decline following adjustments from China’s central bank that allows the yuan to move more freely.

The Australian dollar gained 0.24 percent on the dollar, changing hands at 1.2457 per dollar at midday.

Commodities

WTI Oil was up 0.16 percent to $49.88 per barrel.

Brent Crude gained 0.4 percent to $55.70 per barrel.

Gold was also down 0.73 percent to $1,317 an ounce.

Business News across Asia

In China, a growing number of Chinese homebuyers are rushing into some Southeast Asian countries such as Thailand and Cambodia to buy houses. Though the US and Australia remain the top two most favored places for Chinese homebuyers, tight restrictions placed on the use of foreign currencies means more investors turn to Southeast Asia, which is covered by policy supports under China’s Belt and Road initiative.

Take away: With foreign exchange restrictions most likely to remain in place for the foreseeable future, expect more investment from China in real estate and other sectors in countries along the Belt and Road routes.

In India, a visit from Japanese Prime Minister Shinzo Abe still generates much of the news headlines in India. The visit took place last week, during which India and Japan signed a slew of deals on cooperation in India’s massive infrastructure sector, including Japanese investment in railroads and other projects.

Take Away: It is rare that a trip of foreign leaders receive such massive media attention. However, the laser-like focus on Abe’s visit highlights the close ties of the two countries, with Japanese companies enthusiastically discovering great potentials in India.

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Market Overview

Asian Market Update – Wednesday: Asian shares trading higher as Communist Party Congress convenes in China

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Communist Party members

The Big Question: How will markets react to news out of the congress?

Major Asian equity markets were trading higher during Wednesday morning’s trading session, as markets in China and across the Asia Pacific watched the once-in-five-years meeting of the Communist Party of China in Beijing.

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Wednesday morning, President Xi Jinping is delivering a hours-long speech, which can be compared to the US President’s State of the Union speech to Congress, addressing issues ranging from social and economic to military, and so on.

In China, the Shanghai Composite Index was up 0.27 percent to about 3,381 before midday on Wednesday. The CSI 300 Index, which tracks the 300 largest companies listed in Shanghai and Shenzhen, was up 0.48 percent to 3,931 before midday.

In Hong Kong, the Hang Seng Index edged up 0.01 percent to around 28,700 before midday.

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In Japan, the Nikkei 225 was up 0.09 percent to around 21,354. The Nikkei remained in an uptrend on Wednesday, following recent record highs.

In South Korea, the Kospi was down a slight 0.15 percent to around 2,480 shortly before midday. Korean Peninsula tensions are rising again after a North Korean ambassador to the UN warned that a nuclear war “could break out any moment.”

Down Under, the ASX 200 also added 0.08 percent to around 5,894.

The economic data front remain relatively quite on Wednesday, with the biggest market driver today likely to be the Communist Party Congress in China.

President Xi, in his speech, repeated largely familiar themes in terms of economic policy, which included calls for continued implementation of opening and reforms of the Chinese economy.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 21,354 0.09%
China-Shanghai Composite Index 3,381 0.27%
China-CSI 300 3,931 0.48%
South Korea-KOSPI 2,480 -0.15%
Hong Kong –Hang Seng 28,700 0.01%
Australia-ASX 200 5,894 0.08%

Cryptocurrencies

Prices of cryptocurrencies pointed lower overnight during the Asian trading session on Wednesday.

As of midday in Asia, bitcoin was down 1.67 percent to $5,503, that’s about $60 lower than the same time on Tuesday. However, the overall pattern is still showing a healthy consolidation in bitcoin above the support level at $5,500.

Ethereum lost 2.74 percent to about $307 before midday. Ethereum is now near the $300 level after recent surges to as high as $340.

Litecoin was down 3.28 percent to about $57 at midday. Litecoin has now dropped below $60 after several days above that level.

Currencies

The Japanese yen lost 0.07 percent the US dollar at midday Thursday to 112.25 per dollar.

The Chinese yuan gained 0.2 percent against the US dollar, trading at 6.609 per dollar.

The Australian dollar gained 0.03 percent on the dollar, changing hands at 1.2742 per dollar at midday.

Commodities

WTI Oil was flat for the day, trading at $51.90 per barrel.

Brent Crude gained a slight 0.28 percent to $58.21 per barrel.

Gold was up 0.11 percent to $1,286 an ounce.

Business News across Asia

In China, of course, the focus of not only Chinese state media but foreign media outlets is on the speech by President Xi Jinping. As mentioned above, the speech covers a wide range of topics. But if you only take one thing out of it, here it is:

Take away: President Xi reaffirmed earlier calls for opening and reform plans, trying to reassure foreign companies about market conditions and access. Though that’s just talk now, but a talk like that in a such a big meeting, carries a lot of weight.

Featured image from Wikimedia Commons.

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Market Overview

Dow Jones Hits New Record After Brief Stint at 23,000

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The Dow Jones Industrial Average rose to New records Tuesday, powered by stronger than expected earnings for major health blue chips.

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Dow Touches 23,000 In Intraday Trade

The blue-chip index briefly traded above 23,000 before paring gains to settle a mere three points shy of the milestone. The index rose 0.2% to 22,997.44 for a new all-time record.

Sixteen of the Dow’s 30 index members contributed to the rally. UnitedHealth Group (UNH) and Johnson & Johnson were the best performers after each reported earnings that beat forecasts.

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On the opposite side of the ledger, Goldman Sachs (GS) shed 2.6% despite posting better than expected Q3 results.

With the gain, the Dow has now finished in positive territory in 12 of the past 15 sessions. Over that period, it has added 3.2%.

The broader S&P 500 Index also climbed to new highs Tuesday, adding 0.1% to finish at 2,559.36. Health stocks led the gains, climbing 1.3% as a sector.

Meanwhile, the tech-driven Nasdaq Composite Index pared losses to settle flat at 6,623.66.

However, the gains on Tuesday were accompanied by a mild increase in volatility, with the CBOE VIX settling in the double digits for the first time in a week.

Economic Data Largely Positive

The latest batches of industrial production and housing data painted a favorable picture of the U.S. economy. Industrial production – the broadest measure of factory output – rose 0.3% in September, the Federal Reserve reported Tuesday. Analysts had forecast an increase of 0.2%.

A closely watched measure of housing market conditions also strengthened more than expected this month. The National Association of Home Builders’ housing market index climbed four points to 68 for October. That was the highest level in five months.

Upbeat data helped the U.S. dollar notched its fourth consecutive gain on Tuesday. The U.S. dollar index (DXY) climbed 0.2% to 93.51.

The dollar strengthened against the pound and euro, while paring gains versus the yen and loonie.

Featured image courtesy of Shutterstock.

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Analysis

Daily Analysis: Dollar Rally Continues amid Fed Chair Confusion

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Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2554 -0.09%
DAX 12995 -0.07%
WTI Crude Oil 51.53 -0.66%
GOLD 1287.00 -1.22%
Bitcoin 5652 -0.86%
EUR/USD 1.1751 -0.38%

Yesterday’s trends are mostly continued in financial markets, such as the low-volatility levitation in stocks and the slightly more active trading in currencies with the apparent Dollar strength. The Great British Pound continued to be under pressure amid the amplified Brexit-related worries, but most of the other majors also lost ground to the Greenback.

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The Dollar rally has been fueled by the rise in the odds of some of the hawkish Fed Chair candidates, while overall, the “race” for the positions looks more chaotic than ever. Interestingly, the long-end of the yield curve is refusing to follow the short-term moves, and without the effects of the Fed’s QE program, the yield curve would probably be inverted by now, signaling strong recession risks.

Dollar Index (DXY), 4-Hour Chart Analysis

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The major stock indices are virtually unchanged yet again and even the previously surging Nikkei entered a consolidation, adding to the unusual October lull. Commodities have been quite active thanks to the Dollar’s vigor, with crude oil and gold both turning lower. Oil gave back most of yesterday’s gains as the Iraqi-Kurdish conflict turned out to be less violent than previously feared, and the brief rally fizzled.

WTI Crude Oil, 4-Hour Chart Analysis

Cryptocurrencies

The major coins are having a mixed session at best, as yesterday’s rebound wasn’t durable, and most of the coins turned back lower again. That said, despite the recent choppy price action, the total market cap of the segment is close to its all-time high, even as only Bitcoin is trading near its own record price level.

The optimism regarding Ethereum major Byzantium upgrade wasn’t enough to lift the second most valuable coin today, and the price of the ETH token retreated below the key $330 level after touching $350 yesterday after the upgrade’s lock-in. Ripple and NEO have been among the most active majors today, but with opposing performances, as Ripple fell significantly after yesterday’s break-out attempt, while NEO defied gravity and jumped above the $30 level after a corrective period.

BTC/USD, 4-Hour Chart Analysis

Technical Picture

The S&P 500 is grinding higher despite the overbought short-term momentum readings, and the benchmark is trading very close to its all-time high. The 2550 level is still in focus, but until volatility remains near record lows, the minuscule moves are unlikely to change the technical setup. While a sudden drop in prices could quickly negate the recent break-out, the consolidation could very well lead to further upside, as bulls remain firmly in control, despite the lofty valuation levels.

S&P 500 Futures, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
02:30 AUSTRALIA RBA Meeting Minutes
10:30 UK CPI 3.00% 3.00% 2.90%
11:00 GERMANY ZEW Sentiment 17.6 20.3 17
12:00 EUROZONE Final CPI 1.50% 1.50% 1.50%
15:15 US Industrial Production 0.30% 0.40% 0.20%
15:15 US Capacity Utilization Rate 76.00% 76.20% 76.10%

Featured image from Shutterstock

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