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Asian Market Update – Monday: Coins in negative territory; Asian stocks edge up on tax reform hopes

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Trump tax reform

Cryptocurrencies take breather, but for how long?

Prices of the main cryptocurrencies were in a negative territory on Monday after another week of strong gains last week.

Bitcoin took a relatively hard hit overnight in US trading, reaching as low as $18,200, before surging back up as Asian trading started. At midday in Hong Kong, the price of bitcoin was still down by about 2 percent for the day to 18,874.

Bitcoin futures made its debut on Sunday at the CME Group, the largest derivatives exchange operator in the world. Front-month futures opened at a hisoric level of $20,650, fell to $18,440, and then traded back up to 19,300.

Ethereum also sold off in early trading Monday morning, losing about $51 before moving up again. The virtual currency was still down 2.21 percent to $716 at midday in Asia.

Litecoin lost 3.15 percent to about $315 at midday on Coinbase, though it erased a chunk of the losses seen earlier in the morning, when it lost about 7.7 percent before bouncing back up again.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 22,861 1.37%
China-Shanghai Composite Index 3,262 -0.13%
Hong Kong –Hang Seng 29,001 0.53%
South Korea-KOSPI 2,481 -0.02%
Australia-ASX 200 6,037 0.68%
S&P 500 E-Mini Futures 2,687 0.21%

Major Asian equities started off the week on a largely positive note with major gains seen in Tokyo, Sydney and Hong Kong and slight losses seen in China and South Korea. The prospect of the US tax reform being landed by Christmas might have boosted investors’ confidence.

In Japan, the Nikkei 225 Index edged up 1.37 percent to 22,861 as of midday. Investors there are watching a meeting of the Bank of Japan later this week that will set monetary policy for the coming year. Recent indications show the BOJ is unlikely to make any major shift in its ultra-easy monetary policy and massive stimulus package.

Down under, the ASX 200 gained 0.68 percent to 6,037 at midday. The Aussie index was down for two straight days on Thursday and Friday last week, though it only lost about 0.4 percent.

In Hong Kong, the Hang Seng Index moved up 0.53 percent to 29,001 at midday. The Hang Seng gained 0.73 percent last week, after seeing two straight weeks of losses before that.

The S&P 500 E-Mini Futures was up 0.21 percent to 2,687.

Still, markets on the Chinese mainland and in South Korea were down slightly on Monday.

In China, the Shanghai Composite Index fell 0.13 percent at midday on Monday to 3,262. The benchmark has lost about 5.05 percent since November 13, when officials tightened financial regulations in an effort rein in risks.

In South Korea, the Kospi was down 0.02 percent to 2,481 at midday.

In the US, actions might finally come for tax reform talks that have propelled a strong stock rally in the US and beyond for the whole year. US lawmakers are scheduled to vote on the tax reform bill later in the week. If it passes, President Donald Trump could sign the bill into law by Christmas.

Currencies

The Japanese yen was down 0.09 percent against the US dollar at midday Monday, changing hands at 112.68 per dollar.

The Chinese yuan depreciated 0.03 percent against the US dollar at 6.6110 per dollar.

The Australian dollar firmed 0.23 percent on the dollar, changing hands at 1.3055 per dollar at midday.

Commodities

WTI Oil was up 0.12 percent to $57.41 per barrel at midday on Monday.

Brent Crude gained 0.22 percent to $63.37 per barrel.

Gold was down 0.02 percent to $1,254 an ounce.

News across Asia

In China, an important meeting that sets the direction of economic policies for 2018 is underway in Beijing. The three-day Central Economic Work Conference is expected to set major changes in economic indicators to reflect more on the quality of the economic growth rather than mere growth speed, while tackling specific issues such as mounting debts, poverty and pollution.

Take away: The meeting, coming after a new leadership in the Communist Party was installed last month, and as China marks the 40th anniversary of reform and opening up policies, could prove to be much more important than previous ones.

In Japan, Japan Inc.” is under attack again. Japanese prosecutors has raided the headquarters of Shimizu Corp. and Kajiam Corp. – two of Japan’s largest construction firms – for alleged antitrust violations on a $80 billion contract for a magnetic levitation train line project.

Take away: Some of Japans largest companies have been embroiled in scandals for alleged wrongdoings such as data cheating in recent months, and the scandal appears to continue.

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 37 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: U.S. Stocks Fall as Trump Set to Unveil New China Tariffs; Crypto Selloff Resumes

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U.S. stocks declined on Monday as investors once again weighed the prospects of an all-out trade war between the United States and China. On the cryptocurrency front, Ethereum led a broad decline in afternoon trading.

Stocks Fall

All of Wall Street’s major indexes headed for losses on Monday. The technology-heavy Nasdaq Composite Index was the hardest hit, falling 1.4% to 7,895.79. The large-cap S&P 500 Index fell 0.6% to 2,888.80, with losses mainly concentrated in information technology and consumer discretionary shares. Dow industrials closed down 92.55 points, or 0.4%, to 26,062.12.

The CBOE Volatility Index, commonly known as the VIX, spiked 12.8% to 13.62. The so-called “fear index” had declined in each of the past five sessions. Prior to that, it reached two-month highs as stocks declined following Labor Day.

U.S.-China Trade War

The White House is preparing to unveil a new round of tariffs on China targeting $200 billion in goods, marking the most dramatic escalation in the year-long trade war. According to the Financial Times, Washington’s trade haws are urging President Trump not to back down on tariffs, which are believed to run as high as 25% for certain goods. U.S. officials had previously said they are likely to impose a 10% tariff rate on 40% of Chinese imports.

The Trump administration is escalating its trade war against China amid reports that Beijing was looking to take a more assertive stance on tariffs. That said, China’s Foreign Ministry has once again reiterated that a trade war isn’t in anyone’s interest.

“We have always maintained that the only correct means to resolve the trade dispute is through dialogue and consultation on an equal basis with mutual trust and respect,” ministry spokesman Geng Shuang recent said, as quoted by CNBC.

The new round of tariffs will be announced mere days after both countries signaled their readiness to return to the negotiating table.

Cryptos Decline

The cryptocurrency market was back on the defensive Monday, with Ethereum leading a broad downtrend that included tokens, altcoins and bitcoin. The combined market capitalization of all coins fell to a low of around $193 billion, according to CoinMarketCap.

Ether’s price pivoted lower after regaining more than 30% of lost value. The second-largest cryptocurrency plunged10.5% to $197.50. Among the top-ten ERC-20 tokens by market cap, nine reported losses.

Bitcoin also pulled back sharply after failing to make new highs. BTC was down 3% to $6,311 despite relatively strong technical indicators that pointed to short-term upside.

There was no immediate catalyst for the sudden reversal, a sign that bearish sentiment continues to dictate market trends. In terms of news, Ripple has confirmed that one of Japan’s largest financial institutions will soon launch a payment app using the company’s xCurrent technology. Meanwhile, security issuer XBT has announced plans to launch a new product designed to give investors access to a basket of cryptoassets.

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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4.6 stars on average, based on 601 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: China Bear Market Deepens as Shares Hit 4-Year Lows

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Global stocks and other risk assets started the week with slight losses so far, and the recently weak segments continue to struggle, while US markets are still acting relatively strong, suggesting the continuation of the recent trends. European markets are among the weaker ones again, even after last week’s bounce, with the major benchmarks all being around 10% off their highs, in stark contrast with their US peers.

Shanghai Composite, 4-Hour Chart Analysis

With all eyes on the second round of US tariffs directed to China, it’s no surprise that the pressure on the Shanghai Composite didn’t ease yet, and the benchmark slid to yet another almost 4-year low this morning. The Chinese Yuan is holding on well in the meantime, with the August low being in no danger, as of now.

USD/TRY (Turkish Lira), 4-Hour Chart Analysis

That said, emerging market currencies are back in the crosshairs, with Argentinean Peso, the Brazilian Real, and the Turkish Lira all drifting in early trading.  The Lira, which got a boost from the emergency 6% rate hike by the local central bank last week, is headed towards pre-rate hike levels, and that doesn’t bode well for the coming weeks with regards to Turkish and other emerging market assets.

Dow Futures, 4-Hour Chart Analysis

Economic releases will be few and far between this week compared to last week’s busy calendar, and today, only the Empire State Manufacturing Index made some waves, missing the consensus estimate, and suggesting a slowdown in the recently well-performing US segment. The final CPI in the Eurozone didn’t cause any surprises, coming in at the originally reported 2.0% annualized rate. The Dow, the Nasdaq, and the S&P 500 all opened slight below Friday’s levels after the releases, but the more interesting moves are in Forex markets.

Dollar Declines Against Majors as Commodities Mixed

DXY, 4-Hour Chart Analysis

After Friday’s bounce, the Dollar couldn’t maintain its momentum and today, the reserve currency is lower against most of its global peers, with the Dollar index sliding towards its July lows. With the Fed’s next rate hike just around the corner, the current move is more the product of Mario Draghi’s inflation warning, which is pushing the Euro higher since Thursday’s ECB meeting.

From a longer-term perspective, the Dollar’s strength could be undermined by the Trump administration’s pro-cyclical fiscal expansion, at least against the majors, but until the US economy keeps on booming, we expect bulls to be in control of the Greenback’s market.

Gold, 4-Hour Chart Analysis

Commodities are trading without a clear direction today, with copper following Chinese stocks lower, maintaining the strong correlation, while gold and crude oil are slightly higher. The WTI crude contract is edging towards the $70 per barrel price level again, still trading within a narrowing range, while the main precious metal is also stuck near the $1200 level following a four-month-long decline.

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 346 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

Sleepwalking

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Hi Everyone,

Over the weekend I managed to re-watch one of my favourite movies about the financial crisis of 2008 and couldn’t help but wonder, what’s happening in the world right now that everyone might be missing?

The words of Gordon Brown that we highlighted last week still echo strongly into my head…

For the sake of the world, I do hope he’s wrong and that the next big trend is one of financial success and not failure.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Sleepwalking
  • Trade War: On
  • Silver Surfer
  • Ethereum Getting an Upgrade

Please note: All data, figures & graphs are valid as of September 17th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Signs of complacency abound, two of which I’d like to highlight today.

First is the bond market, which once again seems to be playing out in the background. If you’ll recall, in Q1 we were watching the yields on the US 10 Year bond like a pack of penguins on an iceberg.

The fear that the yield might go above 3% and remain there caused the stocks to drop quite suddenly in early February. However, by the time they did poke above that level in late April, it seems the concerns of such a move had simply dissipated.

Today, the yield is sitting at 2.99% and nobody even seems to care.

The other indicator of extreme complacency is the VIX volatility index.

As you’ll recall, this indicator also spiked in Q1 as the stocks were dropping. At the time the move was welcome as it was coming off the all-time lows for the 30-year-old indicator, which were reached recently (yellow circle).

Looking at the action at the action of the last few months, it certainly does look like the stocks are in sleepwalking territory.

Trade War: On

Even the big news of the day seems to be losing its potency. It seems that every trading day the trade war is switched on or off like a light. Today the headlines say on…

Sure, some stocks have been hit, especially in Asia, but on the face of it a 1.44% decline in the Hang Seng Index doesn’t seem like much of an impact at all.

Even the headlines pointing out that Shanghai stocks are at multi-year lows don’t seem too drastic at the moment. Even though the milestone seems big, the actual percentage movement that brought us here is quite small.

Silver Surfer

Another thing that I just can’t seem to keep out of my mind, or portfolio, are the precious metals. It boggles the brain to see them as low as they are, especially when many analyst calls at the beginning of the year were fairly bullish.

Silver is now sitting above $14 an ounce, toying with this psychological support level over the last few days…

One thing that may have contributed to the decline is cost cutting on behalf of the miners. This article that was written in June speaks about how prices could easily be sustained as low as $17 per ounce.

We’re well below that now.

Ethereum Upgrade Coming

As we know, the Ethereum Blockchain is currently the world’s leading network for the development of decentralized applications. However, it does seem that the EOS network is hot on its heels.

According to data from dappradar.com, there are a total of 13 dApps that have seen more than 300 users in the last 24 hours. 6 of them on Ethereum and 7 on EOS.

Ethereum Top dApps

EOS Top dApps

We’re still in the early stages of decentralized computing and the future is far from certain. Ethereum is currently the most widely used blockchain in the world by transaction rate and is second only to bitcoin in many other aspects.

However, concerns about how to grow the network have emerged in many investors minds. Well, recently there’s been a sign that the path to scalability is once again moving forward.

The long-awaited Constantinople upgrade will reportedly be launched on the Ethereum test net as soon as next month.

Here we can see all four platforms that are competing for market share in the dApp industry over the last week.

It seems that after months of being battered, at least as far as price, Ether is finally ahead of the pack.

Let’s have an amazing week 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

Connect with me on….

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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4.7 stars on average, based on 128 rated postsSenior Market Analyst at Etoro.com.




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