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Sunday, 31 December 2017

Wall Street eyes 2018 gains with a side of caution


(Reuters) - U.S. stocks are expected to keep rising in 2018 because a massive drop in the corporate tax rate is seen boosting the economy and corporate profits, but strategists say sizable gains could either be short-lived or elusive.

The bull market is on track to mark its ninth birthday in March, with the S&P 500 climbing 20 percent for 2017 - its biggest increase since 2013. The drop in the corporate tax rate in 2018, to 21 percent from 35 percent, is seen by many as the biggest factor for the stock market next year.

Yet 2018 share gains are expected to be smaller than 2017 with the S&P 500’s price/earnings ratio - a measure of stock prices against expected profits - is around its highest level since June 2002. Many on Wall Street cite potential pitfalls even though they see no signs of a recession.

“We’ve had six years in a row where stocks have (outperformed) earnings, and I think we break that streak with stocks going up but not as much as earnings,” said Robert Doll, chief equity strategist at Nuveen Asset Management in Princeton, New Jersey.

Some say the tax bill’s benefit will be short lived. David Kelly, chief global strategist at J.P. Morgan Asset Management described the bill as “more carbs and less protein,” because the tax overhaul will improve spending but does nothing to boost productivity.

“It’ll be a one-year wonder,” said Kelly. “People should enjoy the party while it lasts but just make sure you know where your coat is.”

Several strategists cite the risk that faster economic growth could cause inflation to increase at a pace that would lead the U.S. Federal Reserve to raise interest rates faster than expected.

Wall Street’s rosy forecasts seem “well supported by the tremendous string of good news which the economy has delivered,” according to Jim Paulsen, chief investment strategist with Leuthold Group in Minneapolis.

But he said, the news is too good: “The problem with getting good news is that at some point you can’t be positively surprised any more.”

Paulsen does not expect a recession. But when the economic surprise index - which compares economic data to consensus expectations - is at high levels, equity performance tends to be weaker, according to Paulsen.

The Citi Economic Surprise index was at 77 on Thursday, not far from its almost six-year high of 84.5 reached on Dec. 22.

“We’re going to have a 10-15 percent correction at some time in 2018. I wouldn’t be surprised if we’re down for the year,” Paulsen said. “If we get a correction and people get scared I’ll probably be buying again.”

Investors will keep a close watch on the on U.S. mid-term elections in 2018 because a Republican loss of control of the Senate or the House of Representatives could stall the party’s agenda. In 10 of the last 17 U.S. mid-term election years, equity price moves for the full year followed January’s direction, according to Jeff Hirsch, editor of the Stock Trader’s Almanac.

Investor moods in January may depend on whether the U.S. Congress reaches an agreement to raise the country’s debt ceiling. Investors will also be hoping Congress can reach a 2018 budget pact by Jan. 19. These are just some of the worries traders are contending with.

But the market has history against it. The S&P 500 rises on average 1.3 percent in the so-called Santa Clause rally - the period between Dec. 22 and Jan. 3 - according to Hirsch. This year, five days in, the S&P has risen just 0.1 percent.

“The failure of stocks to rally during this time tends to precede bear markets or times when stocks could be purchased at lower prices later in the year,” Hirsch wrote in a blog post.

Reporting by Sinead Carew

Friday, 29 December 2017

Wall Street set to open higher on final trading day of 2017


(Reuters) - U.S. stocks were poised to open on a bright note on the final trading day of 2017, wrapping up a year in which major Wall Street indexes recorded their best performance since 2013.

Investors were treated to bumper gains in the year, with strengthening global economy, solid corporate earnings and low interest rates fueling the nine-year old rally in global stocks.

The market has shown surprising strength despite tensions in North Korea and political upheavals in Washington. The S&P 500 has closed below 1 percent only four times this year.

The S&P technology index  has been the best performing sector, rising about 37 percent and outpacing gains in the broader index.

The rally is widely expected to extend into 2018, boosted by gains from a new law that lowers the tax burden on U.S. corporations.

At 6:56 a.m. ET (1156 GMT), Dow e-minis were up 60 points, or 0.24 percent, with 10,502 contracts changing hands.

S&P 500 e-minis were up 9 points, or 0.34 percent, with 64,781 contracts traded.

Nasdaq 100 e-minis were up 18 points, or 0.28 percent, on volume of 13,512 contracts.

U.S. oil prices hit their highest since mid-2015 as an unexpected fall in American output and a drop in commercial crude inventories stoked buying.

Shares of Schlumberger were up 0.8 percent in premarket trading, while those of Exxon edged up 0.1 percent.

Reporting by Sruthi Shankar

Dollar slips to three-month lows, heads for worst year since 2003


LONDON (Reuters) - The dollar slipped to its lowest in more than three months against a basket of major currencies on Friday as the euro and sterling climbed, putting the greenback on track for an almost 10 percent fall over the year - its worst showing since 2003.

The dollar started 2017 on a high, with the index that tracks it against a basket of six major currencies hitting its strongest in 14 years on hopes that new U.S. president Donald Trump would implement pro-growth, pro-inflation measures.

But it has fallen back on doubts about Trump’s ability to push through those policies. And it has also lost out as growth has picked up outside the United States, with other countries’ central banks moving towards tighter monetary policy, lessening the gap between the Federal Reserve and others.

“We are seeing synchronised global growth, in particular a very strong growth recovery in the euro area, which is leading the ECB (European Central Bank) to gradually normalise policy, which is helping the euro,” said Societe Generale currency strategist Alvin Tan.

Tan added that the dollar had become overvalued against the euro, yen and sterling at the start of the year and so another part of the reason for its weakness in 2017 was a mean reversion in valuation.

The euro, which hit a three-month high of $1.1982 on Friday, up a quarter of a percent on the day, has climbed almost 14 percent against the dollar in 2017 - its best performance since 2003.

The common currency showed little immediate reaction to Italy’s announcement that it will hold an election on March 4, as such an outcome had been anticipated.

Although sterling is still more than 10 percent down against the dollar since the June 2016 vote for Britain to leave the European Union, it has climbed 9.5 percent in 2017 - its strongest year since 2009.

On Friday sterling climbed half a percent to a three-week high of $1.3511.

Shin Kadota, senior strategist at Barclays in Tokyo, said rebalancing of positions by market participants signalled broad selling of the dollar, particularly the yen, towards the year’s end.

“Seasonal trends in the currency market have shown that the dollar tends to weaken after Christmas through the first few days of the following year before eventually being bought back again,” he said.

Many institutional investors close their books at the year-end, a deadline for taxation and performance reporting, a time seen leading to dollar selling pressure.

The dollar was 0.3 pct lower at a ten-day low of 112.56 yen. It was headed to lose almost 4 percent against its Japanese peer in 2017.

Bitcoin was flat on the day at $14,500 on the Bitstamp exchange, having sunk 6 percent on Thursday. It was off the record highs near $20,000 touched 12 days ago but still headed for a gain of roughly 1,400 percent in 2017.

Reporting by Jemima Kelly

Boom year for stocks and commodities, downer for the dollar


SYDNEY (Reuters) - Asian markets were ending 2017 in a party mood on Friday after a year in which a concerted pick-up in global growth boosted corporate profits and commodity prices, while benign inflation kept central banks from snatching away the monetary punch bowl.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS inched up 0.3 percent as three straight weeks of gains left it within a whisker of decade peaks. The index has been on an upward trajectory for pretty much all of 2017, putting it 33 percent higher for the year so far.

Hong Kong .HSI led the charge with gains of 36 percent for the year, while South Korea  notched up 22 percent and India  27 percent.

Japan's Nikkei .N225 and the S&P 500 are both ahead by almost 20 percent, while the Dow has risen by a quarter. In Europe, the German DAX has gained nearly 14 percent, though the UK FTSE has lagged a little with a rise of 7 percent.

Craig James, chief economist at fund manager CommSec, said of the 73 bourses it tracks globally, all but nine have recorded gains in local currency terms this year.

“For the outlook, the key issue is whether the low growth rates of prices and wages will continue, thus prompting central banks to remain on the monetary policy sidelines,” said James.

“Globalization and technological change have been influential in keeping inflation low. In short, consumers can buy goods whenever they want and wherever they are.”

Yet there are reasons to suspect that times this good cannot last.

An index from State Street that gauges investor risk appetite by what they actually buy and sell, suffered its six straight monthly fall in December.

“While the broader economic outlook appears increasingly rosy, as captured by measures of consumer and business confidence, the more cautious nature of investors hints at a concern that markets may have already discounted much of the good news,” said Michael Metcalfe, State Street’s head of global macro strategy.

DOLLAR DISAPPOINTS
U.S. dollar bulls have not been nearly so fortunate this year. The widely held assumption at the start of the year was that, with the Federal Reserve set to raise interest rates further, the only way for the dollar was up.

Yet even though the Fed delivered on its three promised hikes, the currency has failed to benefit.

Measured against its major peers the dollar has shed more than 9 percent so far this year, putting it on track for its biggest annual loss since 2003.

One winner has been the euro, which was near its highest in a month on Friday at $1.1944 EUR= and ahead almost 14 percent for the year.

The dollar even backtracked on the yen despite the Bank of Japan staying doggedly committed to its super-easy monetary policy. As of Friday, the dollar was down 3.5 percent for the year at 112.74 yen JPY=.

The dollar’s loss has been a boon for commodities priced in the currency, which have also benefited from a synchronized pick up in global trade and surprisingly strong demand from China.

Everything from coal to iron ore has reaped gains, with copper a stand-out performer in part due to expectations of rising demand for the mass production of electric vehicles.

The metal was near a four-year peak on Friday at $7,284 a ton CMCU3. It is up more than 30 percent this year and on course for its largest annual rise since 2009.

Gold XAU= has struggled somewhat this year against a background of subdued global inflation, but at $1,295.18 an ounce was still on track to end 2017 with gains of more than 12 percent.

Oil prices were near their highest in 2-1/2 years after data showed strong demand for crude imports in China and a surprise fall in U.S. production.

Brent crude futures added 45 cents to reach $66.61 a barrel, up more than 16 percent on the year so far, while U.S. crude futures climbed 46 cents to $60.30 a barrel.

Reporting by Wayne Cole

Thursday, 28 December 2017

Asian shares near decade highs, copper rallies to fresh four-year peak


SYDNEY (Reuters) - Asian shares marched toward a decade high on Thursday, on track for their best annual performance since 2009 as investors bet on a bright outlook for the global economy with copper at a four-year peak.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS advanced 0.8 percent to stay within sight of November’s high of 570.2 points, a level unseen since late 2007.

It has risen about 33 percent in 2017 thanks to improving global growth as exports boomed, sharply lifting corporate earnings. Much of the positive impulse is expected to extend into 2018.

On the day, most Asian markets joined the year-end party with South Korea's KOSPI  and China's CSI 300 index .CSI300 both up about 1 percent, and Hong Kong's Hang Seng index  adding 0.7 percent. Jakarta's SE Composite Index  advanced to a record peak.

Japan's Nikkei .N225 and Thailand's SET Index .were the only two Asian markets in the red.

MSCI world equity index .MIWD00000PUS, which tracks shares in 47 countries, also held near record highs. It has surged 21.5 percent this year.

Trade was light across the board with many market participants on holiday.

In the cryptocurrency arena, bitcoin's woes persisted as it fell more than 10 percent to under $14,000. The losses came as South Korea said it will impose additional measures to regulate speculation in cryptocurrency trading.

The world’s biggest and best known digital currency has skyrocketed more than 14 times on the Luxembourg-based Bitstamp Exchange this year. And, even after a crushing blow from almost $20,000 it is still up about 39 percent in December alone.

Elsewhere, currencies of commodity exporting countries got a boost from stronger metal and oil prices.

Copper rose for a tenth straight session to a fresh four-year high.

Prices of the metal, considered a barometer for global growth and used widely in power and construction, are up 31 percent in 2017.

Gold climbed to a one-month top XAU= while oil was not far from this week’s 2-1/2 year peak.

All that pushed the commodity-driven currencies of Australia AUD=D4, New Zealand NZD=D4 and Canada CAD=D3 to multi-week highs.

The greenback slipped against the yen JPY= while the dollar index sagged to near one-month lows as U.S. Treasury yields came off recent highs.

Treasury 2/10s yield curve slipped below 52 basis points, from almost 64 basis points last week.

“The dollar bears are getting their last licks in for 2017, perhaps foreshadowing of things to come in 2018,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

The dollar index , which measures the greenback against other major currencies, is seen ending more than 9 percent lower in 2017 as the reflation trade seen at the start of the year faded.

For the year, the dollar is down more than 3 percent on the yen. JPY=

In commodities, spot gold rose 0.4 percent to $1,292.2 an ounce, a level last seen in late November.

Brent crude, the international benchmark for oil prices, rose 16 cents to $66.60 a barrel. U.S. crude added 15 cents to $59.79 after climbing to a 2-1/2 year high of $60.01 on Tuesday.

Reference: Swati Pandey

Dollar falls broadly; commodity currencies stand tall


SINGAPORE (Reuters) - The dollar slid broadly on Thursday, hampered by a recent dip in U.S. 10-year bond yields, while commodity-linked currencies were bolstered by this week’s rally in metals and oil prices.

In the cryptocurrency market, bitcoin came under renewed pressure, tumbling by as much as 10.8 percent on the Luxembourg-based Bitstamp exchange.

The dollar’s index against a basket of six major currencies slipped to as low as 92.734, its weakest level in almost four weeks.

The index has dropped more than 9 percent this year, putting it on track for its biggest annual slide since 2003.

“Bond yields have pulled back from their peaks and the dollar is trading with a soft tone,” said Satoshi Okagawa, senior global markets analyst at Sumitomo Mitsui Banking Corporation in Singapore, referring to a pullback in U.S. 10-year Treasury yields.

The U.S. 10-year Treasury yield stood at 2.425 percent on Thursday, having come off a nine-month high of 2.504 percent set last week.

The euro rose 0.4 percent to $1.1929. The single currency has gained more than 13 percent so far this year, well on the way for its best annual performance since 2003.

Against the yen, the dollar slid 0.5 percent to 112.78 yen.

This week’s drop in the dollar probably partly reflects a sell-the-fact type of reaction after U.S. President Donald Trump signed U.S. tax reforms into law last week, said Lee Jin Yang, macro research analyst for Aberdeen Standard Investments in Singapore.

“I think people have been long dollars into the (Fed’s December) rate hike, into the passage of the tax bill, and right now people are just pulling back,” Lee said, referring to short-term market positioning.

Currencies of commodities exporters remained firm, in the wake of this week’s rise in oil prices to 2-1/2 year highs and a surge in copper prices to four-year peaks.

The Australian dollar touched a two-month high of $0.7799 on Thursday, having gained more than 1 percent so far this week.

The Canadian dollar also touched a two-month peak of C$1.2613 per U.S. dollar.

Bitcoin, the biggest and best-known digital currency, was last down 8.9 percent on the day at around $14,000 on the Luxembourg-based Bitstamp exchange.

Earlier on Thursday, South Korea’s government said it will impose additional measures to regulate speculation in cryptocurrency trading in the nation, where bitcoin has drawn wide participation from housewives and students.

Reporting by Masayuki Kitano

Wednesday, 27 December 2017

Asia stocks up as metals rally signals solid growth outlook


SYDNEY (Reuters) - Asian shares rose on Wednesday with oil and copper prices rocketing to multi-year highs in an uplifting sign for global growth and inflation, while major currencies were becalmed in a holiday-shortened week.

MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.3 percent to near a recent one-month top.

For the year so far, the index has surged about 32 percent thanks to stellar corporate earnings in a strengthening global economy.

A gauge of world shares hovered near record highs, after gaining in every single month this year.

Pointing to a positive start for European and U.S. shares, FTSE futures inched up 0.2 percent while S&P e-mini futures and Dow minis were also a touch firmer.

The gains in Asia came as copper - widely regarded as a barometer of global growth - jumped for a ninth straight session to a 3-1/2 year peak on expectations of strong demand from China. Oil was equally robust, but it was supply fears that kept it near its highest since mid-2015.

Chinese customs data released on Tuesday showed that the country’s refined copper imports leapt 19 percent in November from a year earlier.

“My sense is that the rally in copper supports expectations that 2018 is going to be a strong year for synchronized global growth,” said Greg McKenna, chief strategist at AxiTrader.

“We see there are small bets being placed for further price growth in the New Year.”

The commodities rally boosted shares in resource-dependent Australia, sending the country’s benchmark index to decade highs.

Mining giant BHP Billiton, Woodside Petroleum and gold miner Newcrest were among the top gainers.

In addition, Asian suppliers of iPhone enjoyed a stellar rebound after sliding earlier this week on a report suggesting weaker demand for iPhoneX.

Taiwan’s Pegatron Corp and Hon Hai climbed more than 1 percent, while Apple Inc’s rival Samsung Electronics rose more 2 percent.

COMMODITY PRICE PRESSURES
In forex markets, trading was thin with most major currencies muted. The euro was up 0.2 percent to $1.18780 and the dollar was barely changed at 113.19 yen.

The Australian dollar hit a two-month high, becoming one of the best performing major currencies this year along with the euro and the British pound.

The dollar index, which measures the greenback against other major currencies, is seen ending about 9 percent lower in 2017 as the reflation trade seen at the start of the year faded.

It is down about 3 percent on the yen.

In commodities, Brent crude, the international benchmark for oil prices, gave back its gains on Wednesday to trade at $66.69 a barrel. U.S. crude was off 23 cents at $59.74 after climbing as far as $60.01.

Spot gold stayed within a striking distance of a 4-week peak at 1,282 an ounce.

“I do think the commodity trade is one we need to watch,” said Chris Weston, Melbourne-based chief strategist at IG.

“This is an asset class that is hot at the moment and could really dictate inflationary trends in 2018, where inflation, volatility and the U.S. dollar hold the key to the capital markets.”

Several economists have predicted the return of inflationary pressures in 2018, which would help global central banks wind down years of super-easy policies and hike interest rates.

The U.S. Federal Reserve raised rates three times this year and is set to deliver further hikes in 2018. The European Central Bank is expected to finally begin clawing back its monetary stimulus and tighten policy after keeping the deposit rate below zero since 2014.

Reference: Swati Pandey

How to Use Fractals in Forex


Many people believe that the markets are random. In fact, one of the most prominent investing books out there is "A Random Walk Down Wall Street" (1973) by Burton G. Malkiel, who argues that throwing darts at a dartboard is likely to yield results similar to those achieved by a fund manager.

However, many others argue that although prices may appear to be random, they do in fact follow a pattern in the form of trends. One of the most basic ways in which traders can determine such trends is through the use of fractals. Fractals essentially break down larger trends into extremely simple and predictable reversal patterns. This article will explain what fractals are and how you might apply them to your trading to enhance your profits.

What Are Fractals? 

When many people think of fractals in the mathematical sense, they think of chaos theory and abstract mathematics. While these concepts do apply to the market (it being a nonlinear, dynamic system), most traders refer to fractals in a more literal sense. That is, as recurring patterns that can predict reversals among larger, more chaotic price movements.
These basic fractals are composed of five or more bars. The rules for identifying fractals are as follows:
A bearish turning point occurs when there is a pattern with the highest high in the middle and two lower highs on each side.
A bullish turning point occurs when there is a pattern with the lowest low in the middle and two higher lows on each side.
The fractals shown in Figure 1 are two examples of perfect patterns. Note that many other less perfect patterns can occur, but the basic pattern should remain intact for the fractal to be valid.

Figure 1
The obvious drawback here is that fractals are lagging indicators - that is, a fractal can't be drawn until we are two days into the reversal. While this may be true, most significant reversals last many more bars, so most of the trend will remain intact (as we will see in the example below).

Applying Fractals to Trading 
Like many trading indicators, fractals are best used in conjunction with other indicators or forms of analysis. Perhaps the most common confirmation indicator used with fractals is the "Alligator indicator", a tool that is created by using moving averages that factor in the use of fractal geometry. The standard rule states that all buy rules are only valid if below the "alligator's teeth" (the centre average), and all sell rules are only valid if above the alligator's teeth.

Figure 2 is an example of such a setup:
As you can see, the primary drawback to this system is the large swings that take place. Notice, for example, that the latest fractal had a drawdown of over 100 pips and still has not hit an exit point. However, there are countless other techniques that can be applied in conjunction with fractals to produce profitable trading systems.



Figure 3 shows a forex trading setup that uses a combination of fractals (multiple time frames), Fibonacci-based moving averages (placed at 89, 144, 233, 377 and their inverses) and a momentum indicator. Let's look at a recent trade setup for the GBP/USD currency pair to see how fractals can help:
Here is a basic rule setup that is used when using a chart with a four-hour time frame:
Initiate a position when the price has hit the farthest Fibonacci band, but only after a daily (D1) fractal takes place.
Exit a position after a daily (D1) fractal reversal takes place.


Figure 3
Notice how the fractals pinpoint meaningful tops and bottoms? This helps to take the guesswork out of deciding at which Fibonacci level to trade - all we have to do is check to see if the daily fractal occurred. We should also note that the trend strength began increasing at the sell fractal, and topped at the buy fractal. Although we lose some pips with the confirmation, it saves us from losing out on mere market noise - 139 pips certainly isn't bad for three days!
Things to Consider 
Here are a few things to remember when using fractals:
They are lagging indicators. They are best used as confirmation indicators to help confirm that a reversal did take place. Real-time tops and bottoms can be surmised with other techniques.
The longer the time period (i.e. the number of bars required for a fractal), the more reliable the reversal. However, you should also remember that the longer the time period, the lower the number of signals generated.
It is best to plot fractals in multiple time frames and use them in conjunction with one another. For example, only trade short-term fractals in the direction of the long-term ones. Along these same lines, long-term fractals are more reliable than short-term fractals.
Always use fractals in conjunction with other indicators or systems. They work best as decision support tools, not as indicators on their own.
Conclusion 
As you can see, fractals can be extremely powerful tools when used in conjunction with other indicators and techniques, especially when used to confirm reversals. The most common usage is with the "Alligator indicator"; however, there are other uses too, as we've seen here. Overall, fractals make excellent decision support tools for any trading method.


Reference: Unknown

Oil price rise underpins Canadian dollar, greenback eases


SINGAPORE (Reuters) - The dollar eased against a basket of currencies on Wednesday, while commodity-linked currencies such as the Canadian dollar were underpinned by this week’s rally in oil prices.

Oil prices had surged to 2-1/2 year highs on Tuesday, boosted by news of an explosion on a Libyan crude pipeline as well as voluntary OPEC-led supply cuts.

That helped lend support to the currencies of commodity exporting countries, with the Canadian dollar touching a high of C$1.2678 at one point, its highest level since Dec. 6.

Similarly, the Australian dollar rose 0.2 percent to $0.7746, reaching its highest level in two months.

The U.S. dollar eased 0.1 percent against a basket of six major currencies to 93.188.

Moves among major currencies were subdued, with the euro inching up 0.2 percent to $1.1876. The dollar held steady against the yen at 113.19 yen.

Monetary policy convergence could weigh on the dollar next year, now that central banks other than the U.S. Federal Reserve have either begun moving away from monetary stimulus, or started to raise interest rates, said Peter Chia, FX strategist for United Overseas Bank in Singapore.

Against this backdrop, Japanese policymakers may at least start dropping more hints about an eventual tightening of the Bank of Japan’s monetary policy, Chia said, adding that the dollar could slip to 108 yen by the end of March.

“I think that policymakers in Japan want to prepare markets way ahead for some policy change... The signaling process could be on a higher intensity next year,” he said, adding that actual BOJ policy tightening might only occur in 2019.

A speech by BOJ Governor Haruhiko Kuroda in November had stirred speculation that the BOJ could edge away from crisis-mode stimulus earlier than expected. That was when he mentioned the concept of a “reversal rate” - a level at which low interest rates start to have more harmful side-effects than benefits.

Kuroda, however, said last week after the BOJ kept policy steady that economic improvements alone would not trigger a withdrawal of stimulus, reinforcing expectations that the BOJ was in no hurry to move away from its ultra-loose monetary policy.

Bitcoin rose 3.2 percent to about $16,270 on the Luxembourg-based Bitstamp exchange. Bitcoin is up about 14 percent so far this week, having regained some footing after sliding 25 percent last week, its biggest weekly drop since 2013.

Reporting by Masayuki Kitano

Cryptocurrency stocks holding gains despite bitcoin pullback


NEW YORK (Reuters) - Stocks that surged in recent weeks because of the cryptocurrency mania have managed to hold onto most of their gains despite the recent retreat in the price of bitcoin and scepticism from market participants.

A Reuters analysis of 17 stocks of companies that have made blockchain or cryptocurrency announcements showed an average gain of 224 percent through Thursday’s close from they released those statements.

For example, shares of Long Island Iced Tea Corp jumped nearly 300 percent on Thursday after the beverage maker said it would rename itself Long Blockchain Corp to reflect a new focus on blockchain technology.

The moves are reminiscent of the tech boom, when the market value of companies such as Zapata and Books-A-Million rose sharply after they announced an internet business or an updated website. After the dot-com bubble burst, many of the companies went out of business or became much less valuable.

“There’s been a continued surge of crypto headlines,” said Michael Antonelli, managing director at Robert W. Baird in Milwaukee. “It’s gotten more worrisome as more companies have changed their names. It’s the kind of stuff you saw back in the dot-com era.”

Many of the crypto stocks came under pressure on Friday, as the price of bitcoin tumbled below $12,000 to put it on track for its worst week since 2013. Riot Blockchain dropped 15.3 percent to $23.36, and Overstock.com, which announced in August that it would accept major alt-coins as payment, was down 6.5 percent at $63.05.

Even with the declines on Friday, bitcoin itself is still more than double from its price at the start of November while the stocks are still well above their prices before the companies made cryptocurrency announcements.

While the stocks are susceptible to price moves in bitcoin itself, analysts caution investors should make sure the company has a credible business model.

“It is a buyer beware time,” said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.

“Long term it may hurt these companies because if bitcoin does settle down to being a product that trades like most products and doesn’t have crazy moves every day, it is going to make people look at these companies and ask what is really going on here.”

Reporting by Chuck Mikolajczak

Tuesday, 26 December 2017

The Essentials to Picking a Forex Robot


An Educational Article. 


If you follow Forex in any way, you know that Forex robots have become wildly popular. With the overabundance of Forex robot sales pitches, it is hard to find a robot that is actually successful. In this article, we will show you how to find the best Forex robot for your trading style, as well as what you need to know about your EA and what your realistic goals should be.

If you are looking to purchase a Forex robot, you are most likely looking to make a profit. This means different things to different people. You may be content making $50/week, or you may be seeking much bigger money. The greater your risk tolerance, the greater the chance you will strike it big. At the same time, taking on more risk also means the chance to take bigger losses.

Your risk tolerance is going to be a key factor in dictating which robot is best for you and your trading goals. After determining this, you should look for robots that suit your trading style and analyse various statistical factors including maximum drawdown, profit factor, expectancy and efficiency. A majority of this information can be found in the Best Forex Robot report at www.bestforexrobot.com.

One thing you should realize upfront is that finding the robot that is best for you is going to cost you both time and money. There are numerous elements to look for when choosing your robot. Much of the key statistical information needed to make a sound decision can be found in the best Forex robot toolkit. 

It is crucial to understand that most Forex robots only work efficiently in certain types of markets. What does this mean? Some robots perform better in range bound markets while others are more effective in trending markets. The problem lies in that it is often very hard for a trader to determine if the market is in a range or trending. One key thing you must remember is in order to achieve success with your Forex robot you should never give up the gains that it makes during a favourable market when the market is unfavourable.

So what does this mean? Assuming that your robot is most efficient in a trending market, as soon as the market starts to range you will run into complications and might begin losing money. In order to be successful with this robot you cannot lose money during the ranging market that you made during the trending market.

Furthermore, you must determine if your robot is sustainable which entails backward and forward testing it through a range of market conditions. If your robot's profitability is sustained, then it can be considered robust. Keeping this in mind, you must always remember that past results are never an indication of future performance.

You need to assure that a robot has been both back and forward tested by the vendor before even considering making a purchase. Once you have decided to go forward with the purchase you need to perform your own testing. A good Forex broker can show you how to do this. 

At this point, if you are unhappy with the robot’s performance, you should return it if possible. On the other hand, if you are happy with the robot’s performance, you should run it on a live micro account at first so you are only risking minimal capital in the beginning.

Our hope is that after reading this article, you should now have the proper tools and confidence to embark on your robot trading journey. Let's take a quick moment to do a final review of what you need to be a successful robot trader:
1.) Determine if your robot is robust and in line with your expectations of return.
2.) Perform extensive testing of your robot before taking it live.
3.) Start trading live on a micro account to minimize losses.

Following the guidelines above will help you get one step closer to Forex success.

Reference: ActionForex

Dollar steady in light trade, yen little changed after Japan economic data


First of all, "Merry Christmas"everybody.


This is a late afternoon Boxing day article.


TOKYO (Reuters) - The dollar held steady in Tuesday’s holiday-thinned trade, shrugging off upbeat Japanese economic data as market participants pondered about next year’s potential catalysts.

Markets in Australia and Hong Kong remained closed after Monday’s Christmas holiday, and many financial centers in Europe will also be shut on Tuesday.

The euro inched down 0.1 percent to $1.1869 EUR=. The single currency gave up some ground last week after Catalan separatists won a regional election, deepening Spain's political crisis in a sharp rebuke to Prime Minister Mariano Rajoy and European Union leaders who backed him.

Against the yen, the dollar was almost flat on the day at 113.30 JPY=.

“Yesterday and today, major markets are closed, so it’s difficult to see clear direction at the moment, and we need to think about what will happen in the beginning of next year,” said Masafumi Yamamoto, chief currency strategist for Mizuho Securities in Tokyo.


“I still believe that the passage of the U.S. tax bill and the avoidance of the government shutdown are positive for the dollar,” he said. “In a relative sense, the dollar has an advantage.”

Last week, the U.S. Congress approved a tax code overhaul that was expected to give at least a short-term lift to already solid economic growth. They also pushed through a measure to fund the federal government through Jan. 19, averting agency shutdowns.

The market had a muted reaction to data released early on Tuesday which showed that Japan’s core consumer prices rose for the 11th straight month, up 0.9 percent year-on-year, and household spending jumped in November.

While the inflation rate remains distant from the Bank of Japan’s 2 percent target, the rise offered some hope that a steady economic recovery will gradually drive up prices.

“The inflation numbers were pretty good,” said Bart Wakabayashi, branch manager for State Street Bank in Tokyo.

“The only big factor still left is wages, and then you’ll have the perfect storm” for prices to move higher, he said.

On Tuesday, Japanese Prime Minister Shinzo Abe urged companies to raise wages by 3 percent or more next year, keeping up pressure on firms to spend their huge cash pile on wages to broaden the benefits of his “Abenomics” stimulus policies.

Minutes of the BOJ’s October meeting, released on Tuesday, showed most members shared the view that the central bank should maintain its easy policy.

The BOJ kept monetary policy steady last week and its governor reassured markets the central bank will lag well behind overseas peers in ending its ultra-easy policies.

The dollar index, which tracks the greenback against a basket of six major rivals, edged down slightly to 93.278 

Bitcoin extended its gains, and was last up 10.5 percent at $15,375.83 on the Luxembourg-based Bitstamp exchange.

The volatile cryptocurrency fell nearly 30 percent at one stage on Friday.

Reporting by Lisa Twaronite

Monday, 25 December 2017

Sterling holds its own after final British GDP data release


LONDON (Reuters) - Sterling reversed small losses on Friday to trade flat after British economic growth for the third quarter was left unchanged and the year-on-year number was revised higher, with traders avoiding big positions before the holiday period.

The prospect of further protracted negotiations to seal Britain’s exit from the European Union next year has weighed on the currency in December, although the pound is still up in the last two months after gaining about 4 percent in November.

Britain’s Office for National Statistics (ONS) said economic growth for the July to September was 0.4 percent, unchanged from the previous reading and in line with the consensus. Year-on-year economic growth was revised up to 1.7 percent from an earlier 1.5 percent.

“There’s been a bit of a push higher [for sterling]. I don’t think it’s as big a move as it deserves. The numbers were good,” said David Madden, an analyst at CMC Markets.

The pound was flat against the dollar at $1.339 after it had weakened ahead of the data. It was up 0.2 percent against the euro at 88.46 pence after earlier trading flat versus the single currency.

The pound has been stuck in a tight trading range against the dollar in December, and analysts said sterling needed a jolt to move out of the range.

“This could be the uplift sterling needs to move to the next gear,” Madden said.

Some traders believe the pound will rally in 2018 if Britain agrees a Brexit transition deal and talks with the European Union progress faster than expected.

“The pound has been down on its luck amid a tough post-Brexit referendum backdrop. But the year ahead should see GBP bulls holding onto what they’ve got – especially now that we’re technically ‘halfway there’ when it comes to resolving Brexit,” ING said in a note.

Reference:Tommy Wilkes

Sunday, 24 December 2017

Bundesbank says no euro zone cryptocurrency in sight


FRANKFURT (Reuters) - Bundesbank board member Carl-Ludwig Thiele has ruled out the introduction of official digital money for the euro zone and warned of losses from investments in cryptocurrencies such as bitcoin, according to a German newspaper.

“Digital central bank money analogous to cash is currently not in sight,” Thiele told weekly Euro am Sonntag in an interview published on Saturday.

Digital currencies allow users to make online transactions across borders instantaneously and have surged in popularity this year because of their eye-watering price rises. Bitcoin, the best-known, has increased in price around twentyfold since the start of the year.

But the cryptocurrency plunged by 30 percent to below $12,000 on Friday as investors dumped it after its sharp rise to a peak close to $20,000 prompted warnings by experts of a bubble.

“We are seeing a rapid increase in value, which brings the risk of rapid losses,” Thiele said.

Decentralised digital currencies like bitcoin are still not widely accepted. Critics say they can easily be used for money laundering and the fact that they are unregulated makes them risky to use -- hence the idea of an “e-” version of a physical currency that still has a central controlling authority.

The Bank for International Settlements (BIS) said in September it was too soon to determine whether central banks should issue their own cryptocurrencies, as the risks could not yet be fully assessed and the technology underpinning them was still unproven.

Christoph Schmidt, head of Germany’s panel of economic advisers - known as the wise men - warned that private investors’ losses from bitcoin investments could have a ripple effect on financial markets if they were financed with debt.

“If their losses affect others because they were financed with loans, then that would increase the risk of distortions on financial markets,” he told the German daily Rheinische Post.

Some high profile individuals such as Nobel Prize-winning economist Joseph Stiglitz have said the cryptocurrency should be outlawed.

Schmidt said he did not favour making crytocurrencies illegal but that potential investors must have detailed information on the risks of investments in bitcoin.

German financial watchdog BaFin president, Felix Hufeld, said that regulators must “stay on the ball” when it comes to cryptocurrencies but that they still had much to learn on the subject.

“We are all working on understanding the topic and building our know-how,” he told the German daily Bild.

Reporting by Maria Sheahan

Friday, 22 December 2017

Bitcoin plunges below $13,000, heads for worst week since 2013


LONDON/TOKYO (Reuters) - Bitcoin plunged below $13,000 (£10,970) on Friday after losing around a third of its value in just five days, with the digital currency on track for its worst week since 2013 after a blistering ascent to a peak close to $20,000 on Sunday.

The biggest and best-known cryptocurrency had seen a staggering twentyfold increase since the start of the year, climbing from less than $1,000 to as high as $19,666 on the Luxembourg-based Bitstamp exchange on Sunday and to over $20,000 on other exchanges.

But bitcoin has fallen each day since then, with losses accelerating on Friday. It fell to as low as $12,560 on Bitstamp, marking a fall of almost 20 percent on the day. At 0850 GMT it was trading down 15 percent on the day at $13,320 and was heading for its worst day in more than three months.

For the week, it was down around a third - its worst performance since April 2013.

“A manic upward swing led by the herd will be followed by a downturn as the emotional sentiment changes,” said Charles Hayter, founder and chief executive of industry website Cryptocompare in London.

“A lot of traders have been waiting for this large correction.”

“With the end of the year in sight a lot of investors will be taking profits and saying thank you very much and closing their books for the holiday period,” he added.

Bitcoin has had a difficult week. As warnings about the risks of investing in the volatile and unregulated market have continued to sound louder - with Denmark’s central bank governor calling it a “deadly” gamble - there have been more worries over the exchanges on which cryptocurrencies are bought and sold.

South Korean cryptocurrency exchange Youbit said on Tuesday it is shutting down and is filing for bankruptcy after it was hacked for the second time this year.

Coinbase, a U.S. company that runs one of the biggest exchanges and provides digital “wallets” for storing bitcoins, said on Wednesday it would investigate accusations of insider trading, following a sharp increase in the price of a bitcoin spin-off hours before it announced support for it.

CRYPTO-RIVALS
As rival cryptocurrencies slid along with bitcoin, the total estimated value of the crypto market fell to as low as $480 billion, according to industry website Coinmarketcap, having neared $650 billion just a day earlier.

But other cryptocurrencies had surged earlier in the week, with many market-watchers saying investors who felt bitcoin’s price had become stretched were moving into other digital coins, rather than cashing out entirely.

Ethereum, the second-biggest cryptocurrency by market size, soared to almost $900 earlier in the week, up from around $500 just a week earlier. Ripple, the third-biggest, has more than quadrupled in price since Monday.

“A lot of the capital is flowing from bitcoin into alternative coins,” said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers in Sydney.

Stephen Innes, head of trading in Asia-Pacific for retail FX broker Oanda in Singapore, said that there have also been moves out of bitcoin into Bitcoin Cash, a clone of the original cryptocurrency. Oanda does not handle trading in bitcoin.

“Most of it is unsophisticated retail traders getting burned badly,” Innes said on bitcoin’s recent retreat.

While some say the launch by CME and its rival Cboe Global Markets of bitcoin futures over the last two weeks has given the digital currency some perceived legitimacy, many policymakers remain sceptical.

Bitcoin is known to go through wild swings. In November, it tumbled almost 30 percent in four days from $7,888 to $5,555. In September, it fell 40 percent from $4,979 to $2,972.

“Trading in bitcoin is akin to gambling, so its movements don’t follow logical patterns,” said Takashi Hiroki, chief strategist at Monex Securities in Tokyo.

“Unlike equities and bonds, it is not possible to calculate expected returns on bitcoin, so buying it becomes a gamble rather than an investment.”


Reporting by Shinichi Saoshiro

Dollar edges up, euro slumps after Catalan vote


TOKYO (Reuters) - The dollar edged up on Friday though it remained on track for weekly losses, while the euro slumped after Catalan vote results indicated a victory for separatists in a blow to Madrid.

Spain’s government had hoped that the Catalan election would strip pro-independence parties of their control of the regional parliament and end their campaign to force a split. But with 96 percent of ballots counted in a vote to elect Catalonia’s regional parliament, separatist parties are seen winning 70 seats out of 135.

The euro was down 0.2 percent at $1.1848 EUR= after dipping as low as $1.1817 in the Asian morning session. It pared its weekly gain to 0.8 percent.

“There is support around $1.1800 level which will likely limit the euro’s downside,” said Yutaka Miura, a senior technical analyst at Mizuho Securities.

“This time of year, though, ahead of the holidays, many market participants are away and liquidity is thin, so we need to watch cautiously,” he added.

The dollar index, which measures the U.S. currency against a basket of six major rivals, was up 0.1 percent at 93.400 For the week, it was down 0.6 percent.

One immediate threat to dollar bulls was removed on Thursday, as the U.S. Senate approved a bill to fund the federal government through Jan. 19 and avert agency shutdowns ahead of a Friday midnight deadline. The bill now goes to President Donald Trump to sign into law.

Also underpinning the dollar, Congress approved the most significant U.S. tax code overhaul in three decades that was expected to give at least a short-term lift to already solid economic growth.

U.S. third-quarter data released on Thursday showed the economy grew at its fastest pace in more than two years, powered by robust business spending.

A separate report showed a jump in the number of Americans filing for unemployment benefits last week, but the underlying trend in jobless claims remained consistent with a tightening labor market.

But the tax reform plan is also seen piling on at least $1 trillion to the national debt in 10 years, which helped send the 10-year Treasury yield US10YT=RR to a nine-month high of 2.504 percent on Thursday. It last stood at 2.480 percent, compared with its U.S. close on Thursday of 2.483 percent.

The dollar was steady on the day against the yen at 113.32 JPY=, poised to gain 0.6 percent for the week.

“Dollar-yen trading has paused for now, with the tax bill and the shutdown bill now out of the way, and the Christmas holiday ahead,” said Kumiko Ishikawa, FX analyst at Sony Financial Holdings in Tokyo.

“After Christmas next week, the dollar could finally respond to higher U.S. interest rates, and make a move higher,” she added.

On Thursday, Bank of Japan Governor Haruhiko Kuroda reinforced expectations that the BOJ was in no hurry to move away from its ultra-loose monetary policy.

Speaking after the BOJ held interest rates steady as widely expected, Kuroda said his earlier reference to a “reversal rate” did not indicate a change in his thinking on monetary policy.

Volatile cryptocurrency bitcoin momentarily tumbled below $14,000 on the Bitstamp exchange on Friday, down roughly 30 percent from its record top near $20,000 set at the week's start.

It was last down 5.6 percent at $14,720.

Reference: Lisa Twaronite

Thursday, 21 December 2017

Asia stocks subdued as U.S. tax cuts slug bonds


SYDNEY (Reuters) - Asian markets offered a muted reception on Thursday to the passage of U.S. tax cuts as benefits to company bottom lines were already baked into stock prices, while bonds were spooked by the blowout in government debt needed to fund the giveaways.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dipped 0.06 percent in thin trade, while the Nikkei .N225 eased 0.1 percent.

South Korea was dragged down 1.4 percent by weakness in Samsung, but Indonesia rose after Fitch upgraded the country's credit rating.

Spreadbetters suggested European bourses would open a shade firmer while E-minis for the S&P 500 were flat.

In U.S. President Donald Trump’s first major policy win, Republicans steamrolled opposition from Democrats to pass a bill that slashes taxes for corporations and the wealthy while giving mixed, temporary relief to middle-class Americans.

Having spent more than a year anticipating the bill, its actual passage proved something of an anticlimax for Wall Street. The Dow fell 0.11 percent, while the S&P 500 lost 0.08 percent and the Nasdaq  0.04 percent.

Most of the action was in bond markets where yields on U.S. 10-year notes jumped to the highest since March at 2.50 percent, in the process making a bearish break of a key chart level at 2.47 percent.


The swing higher in long-term yields, for once, outpaced the move in the short-end and steepened the yield curve a little.

Bond investors are concerned that adding fiscal stimulus at a time when the economy is already at full employment would only reinforce the Federal Reserve’s determination to raise interest rates, thus pushing up short term yields.

At the same time, many assume the unfunded tax cuts will lead to an explosion in government borrowing, increasing the supply of new bonds and pressuring prices across the curve.

The impact is all the greater as the Fed has begun to unwind its massive bond holdings, as have central banks elsewhere.

Sweden’s Riksbank on Wednesday took its first baby steps toward reversing ultra-loose policy by ending net new bond purchases.

“An appreciation that central banks are going to be buying fewer bonds next year at a time when many governments will be selling more of them, plus profit taking on the curve-flattening theme that has been a winning trade for large parts of 2017, are playing a part,” said Ray Attrill, head of FX strategy at NAB.

One institution that has long been committed to aggressive stimulus is the Bank of Japan, and it showed no inclination to re-think the policy at its board meeting on Thursday.

Currency investors are assuming the BOJ will keep Japanese bond yields super-low for a long time to come and have been nudging the yen lower in response.

That kept the euro up at 134.60 yen after hitting its highest since late 2015 at 134.76 EURJPY=. The dollar stood at 113.39 yen JPY=, after rising 0.4 percent on Wednesday.

The euro outperformed broadly, reaching $1.1867 EUR= on the dollar after starting the week down at $1.1752. Against a basket of currencies, the dollar was steady at 93.383.

The common currency faces a hurdle later in the day when an election in Catalonia is expected to produce no clear majority for either the separatist or unionist parties, leading to weeks of political wrangling.

In commodity markets, gold XAU= was underpinned by the softer dollar to stand at $1,267.31 an ounce.

Oil prices steadied after rising on a larger-than-expected drop in U.S. inventories and the continued outage of the North Sea Forties pipeline system.

U.S. crude futures were off 8 cents at $58.01 a barrel, having rallied 53 cents overnight. Brent crude edged back 16 cents to $64.39 a barrel.

Reporting by Wayne Cole

Dollar firms vs yen as BOJ's Kuroda in no hurry to tap policy brakes


SINGAPORE (Reuters) - The dollar edged higher against the yen on Thursday, after comments by Bank of Japan Governor Haruhiko Kuroda reinforced expectations that the BOJ was in no hurry to move away from its ultra-loose monetary policy.

Speaking after the BOJ kept interest rates steady as widely expected, Kuroda said his earlier reference to a “reversal rate” did not indicate a change in his thinking on monetary policy.

Kuroda also said the BOJ will continue patiently with monetary easing as inflation was still well off its 2 percent target and that he doesn’t see a need to review the BOJ’s yield curve control policy.

The dollar rose 0.2 percent to 113.56 yen, having traded around 113.40 yen ahead of Kuroda’s news conference.

The greenback has gained 0.8 percent against the yen so far this week, and a rise beyond last week’s high of 113.75 yen would send it to its highest point in more than a month.

Kuroda’s comments did not contain anything particularly new, and suggested that the BOJ will persist with its loose monetary policy, said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore.

“Dollar/yen will probably continue to take cues from moves in U.S. Treasuries,” Okagawa said.

The dollar could edge higher versus the yen, if the U.S. 10-year yield rises further after it set nine-month highs this week, Okagawa added.

Market players had been focusing on Kuroda’s comments, looking for clues on whether the BOJ is getting closer to joining the U.S. Federal Reserve and central banks in Europe, in winding back stimulus.

A speech by Kuroda in November had stirred speculation that the BOJ could edge away from crisis-mode stimulus earlier than expected. That was when he mentioned the concept of a “reversal rate” - a level at which low interest rates start to have more harmful side-effects than benefits.

Analysts said the dollar was supported against the yen after the U.S. 10-year Treasury yield rose to a nine-month high on Wednesday as investors worried over whether the U.S. tax overhaul would lead to higher U.S. debt, increased bond issuance and more aggressive rate hikes by the Fed.

The Republican-controlled U.S. House of Representatives gave final approval on Wednesday to the biggest overhaul of the U.S. tax code in 30 years, sending a sweeping bill to President Donald Trump to sign.

The euro held steady at $1.1872, having gained around 1 percent so far this week, supported by a rise in German bond yields.

Against the yen, the euro touched a fresh two-year high at 134.81 yen on Thursday, its strongest level since October 2015.

Reporting by Masayuki Kitano

Wednesday, 20 December 2017

BoE to allow EU banks to operate in UK as normal after Brexit


LONDON (Reuters) - The Bank of England will allow European banks to continue selling their services in the United Kingdom without having to create expensive subsidiaries after Brexit, the BBC reported on Wednesday.

The decision, if confirmed, would mean European banks offering wholesale services would not face new hurdles to operating in London, which vies with New York for the title of the world’s financial capital.

A BoE spokesman declined to comment on the report. The central bank is due to publish its approach to future supervision of foreign banks at 1300 GMT.

The BoE’s proposal would amount to a signal of goodwill by Britain in Brexit talks and an attempt to preserve London’s position as the financial centre which hosts more banks than any other.

The BBC quoted unidentified government and industry sources as saying they supported the decision.

A later version of the BBC story removed a reference to the BoE proposing that EU banks would be allowed to operate as usual even if no divorce deal was struck between London and Brussels.

More than 100 banks operating in London are branches of lenders headquartered elsewhere in the EU. Currently, they operate in Britain under EU “passporting” rules which are due to expire when Britain leaves the bloc in March 2019.

The BoE had previously said it would let banks know before the end of the year whether these branches must reapply for branch licences to operate after Brexit, or would need to be turned into subsidiaries, a costlier option for banks.

Switching from being a branch to a subsidiary means having to build up buffers of capital and cash locally.

British Prime Minister Theresa May has said Britain will leave the EU’s single market, raising questions about how companies in Britain will do business in the bloc after Brexit, and how European companies can operate in Britain.

Reporting by William Schomberg

Asian shares waver as U.S. tax bill passes Senate, dollar steadies


TOKYO (Reuters) - Asian shares bobbed lower in a choppy session on Wednesday, hobbled by Wall Street’s losses as the long-awaited U.S. tax reform bill wound its way through Congress, while higher Treasury yields underpinned the dollar.

The Republican-led U.S. Senate approved the sweeping $1.5-trillion tax bill in the small hours of Wednesday morning. A re-vote by the House of Representatives was scheduled for later in the day, with approval expected, and the bill will then go to President Donald Trump to sign into law.

Asian market reaction to the passage was muted, with S&P e-mini futures  edging slightly higher, up 0.2 percent.

European stock futures were up 0.1 percent, portending a slightly firmer opening for the region, with DAX futures up 0.2 percent, CAC futures  up 0.1 percent and FTSE futures 0.1 percent lower.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down slightly in afternoon trade, while Japan's Nikkei stock index finished up 0.1 percent.

The Dow Jones Industrial Average shed 0.15 percent on Tuesday, the S&P 500 lost 0.32 percent, and the Nasdaq Composite dropped 0.44 percent.

“I think people are getting more concerned about the tax bill,” said Harumi Taguchi, principal economist at IHS Markit in Tokyo. “Even if it’s passed, it will take some time to know whether or not it will have an impact on the economy.”

The bill slashes the corporate income tax rate to 21 percent from 35 percent. That would boost overall earnings for S&P 500 companies by 9.1 percent, according to UBS equity strategists, though some investors said those expectations are already reflected in recent stock market gains to record highs.

Congress is also struggling to pass a temporary spending bill by midnight on Friday to fund the government and avert a partial shutdown.

“We need to confirm the passage of the tax bill, and the avoidance of a shutdown by Friday, and these two things are necessary before the dollar can move higher, as the market waits for these developments,” said Masafumi Yamamoto, chief currency strategist for Mizuho Securities in Tokyo.

Higher U.S. Treasury yields bolstered the greenback on Tuesday, with the benchmark 10-year yield notching a seven-week high of 2.472 percent US10YT=RR. It last stood at 2.453 percent in Asian trading, compared with its U.S. close on Tuesday of 2.463 percent.

The dollar edged up 0.1 percent to 113.01 yen JPY=, while the euro was steady at $1.1835 EUR=.

The European currency got a lift from higher eurozone rates, gaining 0.5 percent on Tuesday, when central bank governors of Estonia, Slovakia and Germany all discussed the need to shift the debate from bond purchases to other tools such as interest rates.

“That’s re-igniting the debate about ECB tightening, so despite the outlook for the U.S. tax bill passage, euro-dollar is strong right now,” Mizuho’s Yamamoto said.

Against a basket of six rival currencies, the dollar was slightly higher on the day at 93.481.

Bitcoin was down 7.1 percent on the Bitstamp exchange at $16,450 BTC=BTSP, after earlier losing almost one-fifth of its value from a peak hit just three days ago.

U.S. crude oil futures extended gains, helped by a North Sea pipeline outage, OPEC-led supply cuts and expectations that U.S. crude inventories had fallen for a fifth week.

U.S. crude was up 0.3 percent, or 15 cents, at $57.71 a barrel, after settling up 0.5 percent on Tuesday. Brent crude  was 0.2 percent higher, adding 12 cents to $63.92 after gaining 0.6 percent overnight.

Reference: Lisa Twaronite

Tuesday, 19 December 2017

Exchange giant CME's bitcoin futures get tepid take-up in debut


NEW YORK/LONDON/SYDNEY (Reuters) - Bitcoin futures got a muted reception after their debut on CME Group late on Sunday, with volumes in the tens of millions of dollars in the first 12 hours of trading, as warnings about the risks of bitcoin sounded ever louder.

The launch of futures by the world’s biggest derivatives exchange operator, and by its rival Chicago-based exchange Cboe Global Markets a week earlier, had been hailed by many as the moment that bitcoin reached the investment mainstream.

That view has helped send bitcoin soaring even higher than before in recent weeks: it is on track for its best monthly performance in more than four years, having almost doubled in price since the start of December, when it was trading at less than $10,000.

But trading volumes in the CME and Cboe futures have so far been modest.

A total of 751 contracts - each of them for five bitcoins - had been traded on CME’s January futures contract as of 1417 GMT, at $18,970 per contract, just over 13 hours after their introduction, making a total notional value of around $70 million.

On its contract’s debut on Dec. 10, the Cboe traded nearly 4,000 contracts - with a contract size of one bitcoin - during the full session. By the same time on Monday, 2,712 of Cboe’s January bitcoin future contracts had been traded, making a total of just over $50 million notionally.

That compares with notional daily trading volumes of up to $4 billion on BitMEX, a Hong-Kong-based trading platform specializing in bitcoin futures that offers investors up to 100 times leverage on their positions, and which has an initial margin requirement of just 1 percent.

The CME and Cboe futures’ requirements make them unattractive to many cryptocurrency traders. They can only be traded when the exchanges are open, they require initial margins of 35 to 45 percent, and deposits must be made in dollars rather than bitcoins.

“As a trader ... the problem you have with these futures exchanges is there’s T+2 (settlement), weekends they are closed, bank holidays they’re closed,” said Alistair Milne, founder and manager of the Altana Digital Currency Fund.

“We’re all laughing at it because you have to send slow fiat to a futures exchange to post collateral on an asset that may move on a Sunday and margin-call you. It’s slightly ludicrous.”

The CME bitcoin front-month futures contract opened higher at $20,650 but dropped 6 percent within the first half hour of trading.

The contract was last at $18,960, some way off the $19,500 reference price set by the exchange for the January contract.

The reference price, from which price limits are set, is $19,600 for the February contract, $19,700 for March and $19,900 for June, according to CME.

“DEADLY” GAMBLE

On Dec. 10, Cboe Global Market saw the price of its bitcoin futures surge nearly 20 percent in its debut.

The week-old bitcoin futures contract at the Cboe was last trading at $18,750.

The “spot” price of bitcoin - the price at which is it currently changing hands - climbed to a record high of $19,666 on the Bitstamp exchange on Sunday, before the CME began trading its futures. It was trading around $1,000 below that on Monday at $18,500, down almost 3 percent on the day.

The launch of cash-settled bitcoin futures on regulated exchanges considered a major step in the digital currency’s path toward legitimacy, which should encourage the entry of big institutional investors, some say.

“This is a brand-new asset class and I think perhaps a lot of investors want to sit back and see how this plays out before dipping their toes in this market,” said Spencer Bogart, a partner at Blockchain Capital LLC, an investment firm that specializes in the space.

Some investors believe the CME bitcoin futures could attract more institutional demand because the final settlement price is culled from four exchanges: Bitstamp, itBit, Kraken and GDAX.

The Cboe futures contract is based on a closing auction price of bitcoin from the Gemini exchange, which is owned and operated by virtual currency entrepreneurs Cameron and Tyler Winklevoss.

But the velocity of bitcoin’s moves higher this year, with an almost twentyfold increase since the start of January, has also led to an increasing number of warnings about the dangers of investing in an immature, opaque and largely unregulated market.

Denmark’s central bank governor on Monday warned investors to steer clear of bitcoin, saying it was “deadly” and that it was not the responsibility of authorities to regulate the market.

On Sunday, France’s finance minister said his country would propose that the G20 group of major economies discuss regulation of bitcoin next year.

And UBS Chairman Axel Weber told Swiss newspaper NZZ over the weekend that bitcoin was neither valuable nor sustainable, and that he would welcome regulation.

BIGGER THAN FACEBOOK?
Dutch bank ING said on Monday that once the current bitcoin hype was over, it would return to being a “niche product” used by “tech nerds”, those who want payments to be anonymous, and those worried about hyperinflation in their own currencies.

ING also said the fact that bitcoin’s software was open-source meant it was infinitely replicable, which could in the future see it lose out to other rival cryptocurrencies - of which there are currently more than 1,000.

Most of bitcoin’s biggest rivals were up slightly on Monday, adding to hefty gains last week. Its main rival, Ethereum, which surged more than 60 percent to under $750 between last Monday and Thursday, was close to that high at just below $740, according to trade website Coindesk.

The total market value of all cryptocurrencies, which only rose past half a trillion dollars for the first time last Wednesday, reached as high as $603 billion on Monday, according to industry website Coinmarketcap. That makes its “market cap” greater than that of either Facebook or Amazon.

Reporting by Gertrude Chavez-Dreyfuss

Asia stocks up on U.S. tax-reform optimism, dollar hesitant


TOKYO (Reuters) - Asian stocks advanced on Tuesday after a record-setting session on Wall Street on bets that U.S. lawmakers would pass sweeping tax legislation, while the dollar was tentative as traders were circumspect about the bill’s economic impact.

Spreadbetters expected Britain's FTSE to open 0.05 percent higher, Germany's DAX to gain 0.26 percent and France's CAC .FCHI to start little changed.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.4 percent.

Australian shares added 0.55 percent, Hong Kong's Hang Seng .HSI rose 0.8 percent and Shanghai climbed 0.6 percent .SSEC.

Japan's Nikkei bucked the trend and slipped 0.15 percent.

Wall Street hit record highs on Monday on growing optimism about lower corporate tax rates as the Republican tax bill moved closer to passage.

“We expect the bill to pass, as do many market participants, and it seems to make the equity investors happy,” said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.

Global markets have been buffeted in recent weeks by shifting expectations about President Donald Trump’s ability to push through his signature policy.

The bill would cut U.S. corporate tax rates to 21 percent from 35 percent, which investors are betting will boost profits as well as trigger share buybacks and higher dividend payouts.

“While the markets have already priced in the corporate tax cut for the most part, it does provide an advantage for U.S. corporations,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

“The rising trend in broader equities led by the U.S. markets looks to continue for a while.”

The dollar index against a basket of six major currencies was effectively flat at 93.656 after losing 0.25 percent overnight, as some traders questioned the overall economic impact of the tax overhaul.

The dollar was also capped by doubts the tax reforms will be able to drive sizable repatriation of funds back into the United States as expected.

“The bill’s plan to cut tax rates on repatriation of foreign profits would be a permanent measure, rather than temporary one. Corporations would therefore not feel rushed to repatriate funds home, meaning less support for the dollar,” Ichikawa at Sumitomo Mitsui Asset Management said.

Moreover, while Federal Reserve policymakers expect the U.S. economy to get a short-term lift from the tax reform, they project growth will then ease back to about 2 percent by 2020 and not rise to around 3 percent as Trump and his administration predict.

The euro nudged up 0.1 percent to $1.1793 EUR=. The dollar was little changed at 112.600 yen JPY= having pulled back from a high of 112.840 overnight.

South Africa’s rand retained a bulk of its gains after rallying on South African Deputy President Cyril Ramaphosa’s election as the new leader of the ruling African National Congress (ANC) party.

The currency soared to a nine-month high of 12.52 rand per dollar overnight on hopes Ramaphosa's appointment would pave the way for crucial structural reforms. It last traded at 12.75.

In commodities, oil prices were modestly higher following a North Sea pipeline outage but losing a bit of support after a nationwide oil worker strike was called off in Nigeria.

Brent crude futures rose 7 cents to $63.48 per barrel, while U.S. crude futures  were 17 cents higher at $57.33.

Spot gold XAU= rose 0.2 percent to $1,263.66 per ounce.

Bitcoin was 0.2 percent lower at $18,872 on the Bitstamp exchange BTC=BTSP.

Reference: Shinichi Saoshiro

Monday, 18 December 2017

Bitcoin hits bigger stage as exchange giant CME launches futures


NEW YORK/SYDNEY (Reuters) - Bitcoin futures received a lukewarm reception at its launch on the CME Group Inc on Sunday, although market experts believe a recent rally in the cryptocurrency has further to go.

The CME bitcoin front-month futures contract did open higher at $20,650, but dropped 6 percent within the first half hour.

The contract was last at $18,805, below the $19,500 reference price set by the exchange for the January contract.

The reference price, from which price limits are set, is $19,600 for the February contract, $19,700 for March and $19,900 for June, according to CME.

On Dec. 10, Chicago-based derivatives exchange Cboe Global Markets launched bitcoin futures, which saw the price surge nearly 20 percent in its debut.

The week-old bitcoin futures contract at the Cboe was last trading at $18,890, up 4.3 percent.

Spot bitcoin eased 1.9 percent on the Bitstamp exchange to $18,650, after surging to a record high of $19,666 on Sunday.

The launch of bitcoin futures is viewed as a major step in the digital currency’s path toward legitimacy, which should encourage the entry of big institutional investors.

“We saw a nice open on light volume, but pretty uneventful so far,” Spencer Bogart, partner at Blockchain Capital LLC, said shortly after trading began on Sunday.

“This is a brand-new asset class and I think perhaps a lot of investors want to sit back and see how this plays out before dipping their toes in this market.”

Volume on CME was recently at 590 contracts. On its debut on Dec. 10, the Cboe traded nearly 4,000 contracts during the full session.

Bitcoin was set up in 2008 by an individual or group calling itself Satoshi Nakamoto, and was the first digital currency to successfully use cryptography to keep transactions secure and hidden, making traditional financial regulation difficult if not impossible.

HIGHER MARGINS
Some investors believe the CME bitcoin futures could attract more institutional demand because the final settlement price is culled from multiple exchanges.

“The launch should increase buy side pressure and potentially be the catalyst that pushes bitcoin above $20,000,” said Shane Chanel, a fund manager at ASR Wealth Advisers in Melbourne.

“The introduction by CME and CBOE has added validity acknowledging bitcoin as a legitimate asset.”

The Cboe futures contract is based on a closing auction price of bitcoin from the Gemini exchange, which is owned and operated by virtual currency entrepreneurs Cameron and Tyler Winklevoss.

The general sentiment in the market remains one of caution and that has been reflected in margin requirements for the contracts.

In the futures market, margin refers to the initial deposit made into an account in order to enter into a contract.

The margin requirement at CME is 35 percent, while at Cboe, it is 40 percent, reflecting bitcoin’s volatility. The margin for an S&P 500 futures contract, by contrast, is just 5 percent, analysts said.

One futures trader said the average margin for brokers or intermediaries on bitcoin contracts was roughly twice the exchange margins.

Reporting by Gertrude Chavez-Dreyfuss