RBI monetary policy: Four charts show markets are preparing for a rate hike

The interest-rate cycle in India is turning. The central bank may be set to tighten policy next week to keep inflation in check and stem the declines in the rupee if the rate-market moves are any indication.

The Reserve Bank of India hasn’t tinkered with rates since August, and even cut inflation projections last month, raising expectations that borrowing costs would remain on hold. But a surprising hawkish tilt revealed in its April policy minutes and the recent spike in oil has boosted speculation the authority may lift rates at its June 6 meeting.

“Front-end bonds are fully pricing in a 25-basis point hike in June,” said Suyash Choudhary, head of fixed income at IDFC Asset Management Co. in Mumbai. “Even accounting for some higher supply absorption premium, one can say that a 75-basis point increase seems to be comfortably discounted over the next year.”

The wealthy are hoarding $10 bn of bitcoin in bunkers

Behind the guards, the blast doors and down corridors of reinforced concrete, sit the encrypted computer servers -- connected to nothing -- that hold keys to a vast digital fortune.

Argentine entrepreneur Wences Casares has spent the past several years persuading Silicon Valley millionaires and billionaires that Bitcoin is the global currency of the future, that they need to buy some, and that he’s the man to safeguard it. His startup, Xapo, has built a network of underground vaults on five continents, including one in a decommissioned Swiss military bunker.

In the rarefied world of wealth management, Xapo is known for a client list studded with family offices, and for occasionally letting a journalist peek into a stronghold to write about its security. But one secret has proven elusive: how much digital cash does it really hold?

Two Xapo clients said it houses roughly $10 billion of Bitcoin. Another person close to the venture called the figure an accurate approximation. Bitcoin’s price, after all, is hardly steady.

Gold up by Rs 100, reclaims Rs 32,000-level on local jewellers' buying

Gold prices reclaimed the Rs 32,000-level by rising Rs 100 to Rs 32,080 per 10 grams today, taking strength from scattered buying by local jewellers amid a firm trend overseas.

Silver also strengthened by Rs 200 to Rs 40,500 per kg due to increased offtake by industrial units and coin makers.

Gold prices firmed up after falling for three straight days, mainly because of fresh buying by local jewellers at the domestic spot market, coupled with a better trend globally.

Globally, gold rose 0.26 per cent to USD 1,315 an ounce and silver by 0.64 per cent to USD 16.50 an ounce in New York yesterday as the dollar backed off its day's highs, raising demand for the precious metals.

In the national capital, gold of 99.9 per cent and 99.5 per cent purity rebounded by Rs 100 each to Rs 32,080 and Rs 31,930 per ten grams, respectively. It had lost Rs 220 in the previous three days.

Sovereign, however, held steady at Rs 24,700 per piece of eight grams.

Sebi proposes changes to norms governing raising of equity capital

The Securities and Exchange Board of India (Sebi) on Friday proposed a slew of changes to norms governing raising of equity capital.
Among the changes suggested by the Sebi include an increase in threshold from Rs 5 million to Rs 100 million for filing of a “draft letter of offer” for a rights issue. The regulator has also proposed to reduce the time gap between announcement of the price band and launch of an initial public offering (IPO) from five working days at present to just two working days.

Further, the Sebi has proposed to allow companies to extend the IPO time period from three days without reducing the price band. Sebi has also proposed to merge the provisions of the institutional placement programme (IIP) with those of qualified institutional placement (QIP). Changes have also been proposed for the small and medium enterprises (SME) platform. Among them are increasing the maximum post-issue face value capital for a SME public issue from Rs 250 million to Rs 500 mn. Also, provisions for SME follow-on public offer and rights issue.

Energy stocks lead gains on S&P; IBM drags as profit margin misses estimate

The benchmark S&P 500 index posted slight gains on Wednesday, helped by gains from industrial and energy stocks, but IBM's disappointing results and a sell-off in semiconductor stocks weighed on the Nasdaq and the Dow.

IBM fell 6.2 per cent after the company reported quarterly profit margins that fell short of Wall Street expectations.

Semiconductor stocks also took a hit, led by Lam Research's 5 per cent drop after what analysts called a disappointing shipment forecast. The S&P technology index fell about 0.5 per cent.

Not all results were disappointing. Morgan Stanley rose 3 per cent after it reported a 40 per cent jump in quarterly profit, driven by its trading business.

United Airlines rose 1.6 per cent after reporting a rise in profit and CSX Corp jumped 7 per cent after the railroad operator topped profit estimates. That helped lift the Dow Jones Transport index by 1.2 per cent.

Oil prices jumped about 2 per cent, lifted by a reported decline in US crude inventories and the risk of supply disruptions. Exxon and Chevron were up about 1.3 per cent.

Amazon falls 5% on reports of Trump targeting co by changing tax treatment

The Nasdaq Composite index fell on Wednesday, dragged down by losses in Amazon and Apple, while gains in healthcare stocks propped up the Dow and the S&P 500.

Amazon fell more than 5 percent after reports that President Donald Trump is looking to target the company by changing its tax treatment.

Apple dropped 1.6 percent after Goldman Sachs analyst cut sales estimate for iPhone for March and June quarters, citing weak demand.

However, Facebook's shares rose more than 2 percent after the company said it was giving users more control over their privacy by making data management easier and redesigning the settings menu.

The social network has lost more than $100 billion in market value since March 16, when it first acknowledged that user data had been improperly harvested by a consultancy firm.

"We had Facebook making some announcements. That's obviously taking some pressure off the stock at the moment," said Andre Bakhos, managing director of New Vines Capital LLC in Bernardsville, New Jersey.

Nasdaq drops nearly 1% as Facebook leads slide in tech stocks

Wall Street's main indexes opened lower on Monday as reports of Facebook's user data being misused weighed on technology stocks and the broader market.

The Dow Jones Industrial Average fell 90.8 points, or 0.36 percent, to 24,855.71. The S&P 500 lost 11.84 points, or 0.430231 percent, to 2,740.17. The Nasdaq Composite dropped 63.99 points, or 0.86 percent, to 7,418.00.

Dow extends losses, down over 300 pts, as trade war fears hurt industrials

The Dow industrials fell more than 300 points on Friday on mounting fears of a global trade war following President Donald Trump's promise to impose import tariffs on steel and aluminum.

Europe promised to act firmly and China said it would defend its interests appropriately if Trump followed through with his pledge of imposing tariffs of 25 percent on imported steel and 10 percent on aluminum.

The blue-chip index turned negative for the year following the news and is now down 1.4 percent for the period.

Boeing's 3.8 percent fall weighed the most on the index as worries about higher costs troubled investors.

What to make of US Fed chairman Jerome Powell's hawkish testimony

Jerome H Powell, the newly minted Chairman of the US Federal Reserve (US Fed) came out as a clear hawk in his first testimony before the Congress on Tuesday.
Powell said that his expectations for domestic economic growth have increased since the beginning of the year, citing the passage of the $1.5 trillion tax cut, lifting of the debt ceiling and stronger global growth.
Our take on his testimony:
1. Clearly hawkish
His talons became visible when he answered a Democrat’s question as to what would cause the US Fed to hike more than three times that the central bank’s guidance currently calls for?
Powell said that each of the Federal Open Market Committee (FOMC) member would take the developments since the December meeting into account and write down ‘new rate paths as we go into the March meeting, and I wouldn’t want to prejudge that.’
2. Personal views take front seat
When the Fed Chair testifies, he speaks for the Federal Reserve, not for himself. But, Powell gave his personal views many times. This is a big break from the past like Janet Yellen, Ben Bernanke or Alan Greenspan.

Wall St bounces back 1%; yields on 10-year US notes end week little changed

Wall Street's three main indexes rose more than 1% on Friday, bouncing back from a steep selloff this week that pushed the Dow Jones Industrial Average and the S&P 500 into correction territory

Stocks had plunged 4% on Thursday, sending the Dow and the S&P more than 10% below their record highs on Jan. 26 and adding to the sense that rising US government bond yields had begun a major correction to nine years of near uninterrupted gains for Wall Street.
The yield on benchmark 10-year US Treasuries, which tends to be the driver of global borrowing costs, was hovering at 2.85%, set to end the week little changed since hitting a near a four-year high of 2.885% Monday.

"The fact that Monday's lows were breached (on Thursday)signals more trouble ahead and rallies are likely to give way to rising bond yields," said Peter Cardillo, chief market economist at First Standard Financial in New York.

Wall Street slips in volatile trade after dropping 2% at session start

US stocks slipped in volatile trading on Tuesday following the biggest one-day declines for the S&P 500 and Dow in more than six years.
Major indexes swung from negative to positive and back after starting the session down 2 percent.
The sharp declines in recent days have marked a pullback long-awaited by investors after the market has minted record high after record high.
"Put your seatbelts on.

It's going to be a volatile ride for the next several trading sessions," said Chad Morganlander, portfolio manager at Washington Crossing Advisors in Florham Park, New Jersey.
"Fundamentals are moving forward in a positive way, which gives us confidence that in the long run you'll continue to see higher highs within the markets."

China may stamp out crypto trading by blocking access to overseas websites

China plans to stamp out all remaining cryptocurrency trading in the country by blocking access to overseas-based websites and removing related applications from app stores.

The moves were outlined in a report Sunday by Financial News, a publication under the People's Bank of China, which said the aim was to snuff out the "dying cinders" of cryptocurrency trading and initial coin offerings "which are glowing once more".

Faced with Chinese citizens who continue to trade cryptocurrency on platforms operated beyond the country's reach, or take part in initial coin offerings, authorities will "ratchet up oversight in a sustained manner", the report said.

Wall Street climbs on higher oil prices, quarterly earnings' reports

US stocks rose on Thursday with a broad-based rally across sectors as speculation over China halting US bond purchases eased and investors focused on quarterly earnings reports and higher oil prices.

US crude futures rose to $63.82 a barrel, its highest since December 2014, boosted by a surprise drop in US production and lower crude inventories.

Positive brokerage recommendations on oil majors Exxon and Chevron lifted their shares, helping the S&P energy index climb 0.62 percent.

"It's back to a generally positive mode," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

At 9:34 a.m. ET (1434 GMT), the Dow Jones Industrial Average was up 46.19 points, or 0.18 percent, at 25,415.32 and the S&P 500 was up 5.29 points, or 0.19 percent, at 2,753.52.

The Nasdaq Composite was up 12.79 points, or 0.18 percent, at 7,166.36.

The S&P and the Nasdaq snapped their six-day rally on Wednesday after Bloomberg News reported Chinese officials had recommended halting its U. S. bond purchases, which China dismissed later.

Also weighing on the dour sentiment was a Reuters report on Wednesday that Canada is increasingly convinced U. S. President Donald Trump would soon announce an exit from the North American Free Trade Agreement.
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Here's why billionaire Warren Buffett will never invest in cryptocurrencies

Berkshire Hathaway’s Warren Buffett said on Wednesday he will never invest in cryptocurrencies.
“I can say almost with certainty that cryptocurrencies will come to a bad end,” Buffett told CNBC in an interview.

Buffett’s comments come a day after JPMorgan & Chase Chief Executive Jamie Dimon said he regrets calling bitcoin a fraud, referring to comments he made at a banking conference in September.

Bitcoin has taken the investing world by storm, surging to a high of more than $19,000 and created a divide on Wall Street about whether it is a legitimate financial instrument.
Bitcoin was down around 3 per cent at $13,981.53..
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Wall Street slips after report says China may slow US bond purchases

Wall Street's major indexes slipped on Wednesday, stalling the rally that marked the start of 2018, after a report that China is considering slowing or halting purchases of US government debt.

Apple, Microsoft and Amazon were among the biggest drags on the S&P 500 and the Nasdaq, while a 0.7 percent drop in Boeing and Caterpillar weighed on the Dow.

The S&P and the Nasdaq have closed at record highs on every single day in 2018, buoyed by optimism over global economic growth and expectations of strong quarterly earnings.

"For a market that was probably looking for reason to take a pause, it's not unreasonable to use today's rise in yield as a catalyst," said Art Hogan, chief market strategist at B Riley FBR in Boston.

The dollar dropped 0.4 percent against a basket of currencies, while long-dated Treasury yields hit fresh 10-month highs after Bloomberg reported the US bond market was becoming less attractive for Beijing.

The CBOE Volatility index, a widely followed measure of market anxiety, rose to its highest level in more than a week at 10.41.

At 9:46 a.m. ET (1446 GMT), the Dow Jones Industrial Average was down 67.02 points, or 0.26 percent, at 25,318.78 and the S&P 500 was down 7.64 points, or 0.27 percent, at 2,743.65. The Nasdaq Composite was down 25.48 points, or 0.36 percent, at 7,138.09.
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Stock markets globally start 2018 on cheerful note; bond yields rise

World stocks hit fresh highs on Wednesday with European markets joining the party as early indications suggest 2018 will be another year of synchronised global growth led by a robust European economy.

After its biggest one-day gain in more than two weeks on Tuesday, and in the wake of its best year since 2009 in 2017, MSCI's index of global stocks, which tracks shares in 47 countries, pushed on to new record highs.

The pan-European stock index was 0.2 per cent higher following gains for their Asian and US counterparts overnight as manufacturing surveys pointed to a strong start for the European economy. US stock futures suggested another higher open on Wednesday.

The single currency was holding near a four-month high of $1.2081 hit on Tuesday.

"Investors have woken up in the new year and looked forward to another firm-year for global growth with very muted downside risk," said Investec economist Philip Shaw. But he warned against reading too much into the first two trading days of the new year.

"The converse is the sell-off in bond markets: the idea that inflation pressures may be firmer than expected and central banks could take a slightly more aggressive approach than previously thought," Shaw added.
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Gold sparkled in 2017 despite record surge in US stocks, 3 Fed rate hikes

Gold is opening the new year on the front foot. Bullion advanced for an eighth straight day to head for the longest stretch of gains since mid-2011, building on an annual surge that pushed the precious metal to its best year in seven as the dollar weakened.

Bullion for immediate delivery advanced as much as 0.5 per cent to $1,309.32 an ounce, the highest level since September 26, and was at $1,309.06 at 6:37 am in London, according to Bloomberg generic pricing. Last year, the commodity climbed 14 per cent as the Bloomberg Dollar Spot Index lost 8.5 per cent to post the steepest decline since at least 2005.

Gold's strong run in 2017 came even as US stock markets surged to records and the Federal Reserve increased interest rates three times amid signs of an improving economy. Fed policy makers are projecting another three hikes in 2018, while other central banks around the world have also shifted toward a tighter monetary stance, with the European Central Bank planning to halve its asset purchases starting this month.

"As global complacency over the trajectory of US rates continues to be astoundingly low, precious metals, in general, should continue to benefit," Jeffrey Halley, senior market analyst at Oanda Corp in Singapore, said in a note. "The old adage that the market can stay irrational longer then you can stay solvent appears to be alive and well in the gold market at the moment."
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Bitcoin losing lustre as underworld switches over to other currencies

Bitcoin is losing its lustre with some of its earliest and most avid fans -- criminals -- giving rise to a new breed of virtual currency.

Privacy coins such as monero, designed to avoid tracking, have climbed faster over the past two months as law enforcers adopt software tools to monitor people using bitcoin. A slew of analytic firms such as Chainalysis are getting better at flagging digital hoards linked to crime or money laundering, alerting exchanges and preventing conversion into traditional cash.

The European Union’s law-enforcement agency, Europol, raised alarms three months ago, writing in a report that “other cryptocurrencies such as monero, ethereum and Zcash are gaining popularity within the digital underground.” Online extortionists, who use ransomware to lock victims’ computers until they fork over a payment, have begun demanding those currencies instead. On Dec. 18 hackers attacked up to 190,000 WordPress sites per hour to get them to produce monero, according to security company Wordfence.

For ransomware attacks, monero is now “one of the favorites, if not the favorite,” Matt Suiche, founder of Dubai-based security firm Comae Technologies, said in a phone interview.

Monero quadrupled in value to $349 in the final two months of 2017, according to coinmarketcap.com, placing it among a number of upstart coins that that rose faster than bitcoin, the world’s most valuable digital currency. Bitcoin roughly doubled in the same period, data compiled by Bloomberg show.
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China caps bank card withdrawals abroad at $15,370 annually

China's foreign exchange regulator will cap overseas withdrawals using domestic Chinese bank cards at 100,000 yuan ($15,370) per year in an effort to target money laundering, terrorist financing and tax evasion, it said on Saturday.

Individuals who exceed the annual quota will be suspended from overseas transactions for the remainder of the year and an additional year, the State Administration of Foreign Exchange (SAFE) said in a notice posted on its website.

Under the new rules SAFE will submit a daily list of individuals banned from making overseas bank card withdrawals, and banks must suspend the users by no later than 5 p.m. the same day, the notice said.

Domestic card users will also be barred from withdrawing more than 10,000 yuan a day overseas, it said.

The new rules come into effect on Jan. 1, and reporting adjustments must be adopted by banks by April 1, 2018, it said.

China has strengthened regulatory oversight of overseas card transactions in the past year, targeting illegal cross-border transfers and money laundering.

In September SAFE brought in regulations requiring Chinese banks to report daily their bank card holders' overseas withdrawals as well as every transaction exceeding 1,000 yuan.

China's foreign exchange reserves rose for the 10th straight month in November due to tighter regulation and a stronger yuan, which continue to discourage capital outflows.
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Drop in Apple shares due to weak iPhone X demand drags Wall Street lower

Wall Street's main indexes came under pressure on Tuesday following a 2.8 per cent drop in Apple's shares on a report of weak iPhone X demand.

Apple will slash its sales forecast for its flagship phone in the current quarter to 30 million units, down from what it said was an initial plan of 50 million units, Taiwan's Economic Daily reported, citing unidentified sources.

That, along with some bearish brokerage calls on iPhone X demand, put its shares on track for their worst single-day percentage fall since Aug. 10.

Shares of companies that supply parts to Apple, including Broadcom, Skyworks Solutions, Finisar and Lumentum Holdings, fell between 1.8 per cent and 3.5 per cent.

The S&P technology index fell 0.9 per cent, the only loser among the 11 major S&P 500 sectors.

Most markets around the world, including parts of Europe and Asia, were shut on Tuesday. Trading volumes are also expected to be light in the holiday week.

"It's going to be slow trading for most of the week. A market that's going to stay within a trading range, we could have a plus or a negative day, but nothing exciting," said Peter Cardillo, the chief market economist at First Standard Financial in New York.

At 9:34 a.m. ET (1434 GMT), the Dow Jones Industrial Average was down 8.32 points, or 0.03 per cent, at 24,745.74 and the S&P 500 was down 2.4 points, or 0.09 per cent, at 2,680.94.

The Nasdaq Composite was down 29.11 points, or 0.42 per cent, at 6,930.86.

Sucampo Pharma surged 6 per cent after Mallinckrodt said it would acquire the drugmaker for $1.2 billion, to gain access to its constipation drug Amitiza. Mallinckrodt shares rose 4.3 per cent.
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