Article / 20 December 2017 at 8:00 GMT

Morning Markets: Christmas calm comes early, but not for Bitcoin

Senior Editor / Saxo Bank
Denmark

chart

 

Watchlist

  • CA: Wholesale sales (1330 GMT)
  • US: Existing home sales (1500 GMT)
  • US: EIA weekly petroleum status update (1530 GMT)
  • NZ: GDP (2145 GMT)


The Christmas quiet seems to have descended somewhat prematurely this year with global markets unusually sluggish although there's three full trading days to go before the holidays officially begin. Two exceptions, however, are Bitcoin (which has slumped) and the US tax reform process (which has hit a technical barrier, delaying final legislative approval).


First, Bitcoin, which fell up to 10% overnight after Coinbase, the leading US platform for buying and selling the cryptocurrency, said it was going to start trading in Bitcoin cash, a rival crypto that was spun off the original some months back. The move sent Bitcoin down from $17,929 to a low of $16,912, though it later clawed back some of these losses. 


Meanwhile, the USD dollar has shrugged off the passage of President Trump's tax reform bill through the Senate by a majority of 51-48 as this was already priced into the market. And though this was supposed to have been the final legislative vote on the package is has had to be referred back to the House of Congress for a second approval because of a procedural error. However, this is just a slight delay in the timing and Trump will soon be able to append his flamboyant signature and claim a (rare) success.

Market signals

Asian session

  • NZ's current account deficit for the September 2017 quarter narrowed to $NZ1.3 billion
  • The House approved the US tax reform bill but stumbled on the details
  • The US Senate ruled against three provisions of the Republican tax bill
  • Treasury yields staged one of the sharpest two-day moves of the year
  • Bitcoin plunged $1000 in less than an hour on Tuesday
  • Bitcoin was at $16,626.42 at 0225 GMT, down about 15% from Monday
  • Oil rose overnight after surprise drop in US crude stocks
  • In Asian trading WTI stayed at around $57.71/b
  • Asian stocks were mixed after US indices fell overnight
  • Nikkei 225 was treading water, up just 0.1% in afternoon trade
  • The Hang Seng and the Shanghai Composite fell less than 0.1%
  • Gold was at $1264.29/oz in afternoon trading in Asia

Forex ahead

  • The USD headed lower after tax reform was passed in the House
  • EURUSD was at $1.1644 after a large rise in the overnight session
  • USDJPY was at 112.94 in late trading

In opinion


Arise USD 
The US dollar inched higher against the commodity currency bloc and the Japanese yen gave up a little ground against the euro and sterling, writes Michael O'Neill in his regular US Wrap.


Japanese kink
There is still one potentially significant event for USDJPY, namely the Bank of Japan monetary policy statement on Thursday, says Max McKegg.


bitcoin


The Bitcoin craze hit a bit of bother yesterday. Pic: Shutterstock

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21 December
Daniel CN Daniel CN
We see lots of free-riders now on the crypto-train. Companies which soar just by adding "block" "chain" "crypto" to their names. My guess: if the price stays low a bit longer, they try to push it up. If that wont work longer than a month, the blind mass will start to exit. How come I always hear Aretha Franklin in my mind when I read about "blockchain". "chain chain chain ... chain of fools".
24 December
Attengrab Attengrab
This kind of man made bubbles makes share market suspicious. Ordinary buyer borrow thousand of pound to get in the train but GOD KNOWS if the train ever reached in a destinations at all.

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