USD gains after GDP beat; Stocks recover from early weakness

Summary:

• EURUSD back at 1.14 after US and German data

• Equities recover after early weakness

• Stock of the week: Walmart

• DE30: BMW mulls China bond issue

• Ethereum plans to activate its hard forks today

The world’s largest economy grew faster than expected in the final quarter of 2018, in what is a solid data point and has caused the US dollar to perk up. US Advance GDP Q/Q came in at an annualised rate of 2.6% compared to a forecast 2.2%, down from 3.4% previously. While this is a fair sized drop, which actually appears a little worse when you consider the prior reading was also revised down from 3.5% it does still top the median estimate. Shortly before the US GDP was release there was the latest look at German inflationary pressures with the preliminary CPI for February showing price pressures in the country remain above the Eurozone average. The EURUSD saw a break above the 61.8% fib at 1.1407 stopped in its tracks after the better than expected US GDP numbers.

The FTSE dipped to its lowest level in almost 3 weeks this morning, falling back below the 7100 mark as global equities in general have pulled back as risk sentiment took a hit after the US and North Korea failed to reach an agreement over denuclearisation for the peninsula. US president Donald Trump and North Korean leader Kim Jong Un abruptly cut short their summit in Hanoi, and in doing so cancelled a signing ceremony as the two leaders failed to make any tangible progress and agree terms on the deal. There was similar weakness in the DE30 and US500 but as the day has wore on they’ve bounced off the lows and now trade back to mixed on the day.

Walmart is the world’s biggest retailer that held superior position in the North America for decades. However, changing environment caused the company to pay bigger attention to rapidly growing online segment rather than traditional brick-and-mortar stores. In this analysis we will take a look at Walmart’s traditional business, expansion plans and the latest earnings report.

BMW (BMW.DE) is said to be looking for financing on a whole new market. According to Bloomberg report, the German carmaker is in talks with banks over debut panda bond offering. Panda bonds are renminbi-denominated bonds offered in China by foreign companies. If successful, issuance of panda bonds may be cheaper way to finance BMW’s operations in China.

The largest virtual currency Bitcoin saw a moderate drop yesterday but it closed Wednesday’s trading only slightly below its opening price The two Ethereum hard forks called Constantinople and St. Petersburg are expected to be activated on Thursday. The both upgrades are planned at 7 280 000 000 block, and there are around 2000 blocks left to the mentioned block at the time of writing this post. Having said that, the activation of them is expected in less than 12 hours. Let us remind that the Constantinople hard fork was originally planned to take place in the second half of January, but a discovered security bug caused the postponement for over a month. The St. Petersburg upgrade is aimed to disable the mentioned vulnerability in the Constantinople code. It is worth noting the Ethereum upgrade will decrease block reward issuance to 2 from 3 Ethereum.