David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Greenback at Risk of Sharp Year-End Drop to Cap a Miserable 2020

    This article from Bloomberg may be of interest to subscribers. Here is a section: 

    The dollar is heading into the year-end vulnerable to a sharp extension of the bear run that’s shaped global currency markets since March.

    Long-term trends on technical charts stretching back over the past decade reveal multiple trigger points that could see the greenback shoot lower against a host of key currencies.

    Poor liquidity, lightly-staffed trading desks, defensive price-making engines and reduced seasonal demand add to the potential for outsized moves.

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    Lidar Makers Jump After Report on Apple's Autonomous Car Plans

    This article by Divya Balji and Crystal Kim for Bloomberg may be of interest to subscribers. Here it is in full:

    Some lidar suppliers gained Tuesday after Reuters reported that Apple Inc. plans to build a self-driving car for consumers and is tapping outside partners for elements of the system as it develops its own battery technology.

    Apple is approaching companies for some parts, including lidar sensors that provide autonomous cars with a real-time, 3-D view of the world, the report said, citing unidentified people familiar with the matter.

    Lidar supplier Luminar Technologies Inc. rose as much as 12% on Tuesday, while Velodyne Lidar Inc. surged 16%. Blank-check firms that are bringing more lidar players to the market also advanced: InterPrivate Acquisition Corp. climbed 17%, while Collective Growth Corp. jumped as much as 24%.

    Apple has been working on driverless car technology since 2014, but pared back its ambitions from a full-fledged vehicle in 2017, Bloomberg News has reported. Since then, Apple has been working on the underlying autonomous system. The company has been deciding whether to attach this system to its own car, or existing vehicles, or to partner with an established carmaker, Bloomberg News reported earlier this month.

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    How Chinese Chip Giant SMIC Can Evade Trump's Newest Crackdown

    This article from Bloomberg news may be of interest to subscribers. Here is a section:

    Within the company, engineers are scrambling to assess the fallout and figure out workarounds to secure the equipment it needs, much like Huawei did two years prior, another person familiar with the matter said. At issue is the administration’s focus on drawing a line at 10-nanometer technology, banning the sale of equipment intended for use in more advanced processes. SMIC could conceivably repurpose 80% of older-generation gear to crank out more advanced chips, but that tactic won’t sustain production for the longer term and much depends on how far President-elect Joe Biden decides to take the rules, a third person close to the situation said, asking not to be identified discussing sensitive matters.

    “The company has already got critical equipment and materials needed to continue production,” said Xiang Ligang, Beijing-based director-general of the Information Consumption Alliance. “In the past, China wasn’t too sensitive about the technological bottlenecks it has. But now, Beijing is fully aware of the potential damage and is determined to solve these issues.”

    Chinese government-backed SMIC, a manufacturer of chips for global names from Qualcomm Inc. to Broadcom Inc., relies on U.S. gear for its longer-term technology road map. While its engineers may be able to sustain research and output in the short run, the latest sanctions basically freeze its capabilities while the industry advances. If a Biden White House takes it to the max, SMIC could be blocked from 7nm or more advanced technology while overseas rivals like Taiwan Semiconductor Manufacturing Co. dominate the market. The heightened scrutiny may also discourage clients leery of dealing with the uncertainty.

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    U.K. Faces Food Crisis Threat as Virus Surge Blocks Trade

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    The U.K. confronted threats of food insecurity and panicked shopping days before Christmas as European nations restricted trade and travel to guard against a resurgent coronavirus, offering Britain a preview of the border chaos to come in the absence of a Brexit deal.

    Fearing a fast-spreading new strain of the virus that forced a strict lockdown across England, France on Sunday suspended travel from the U.K. for 48 hours and wants a stricter testing regime before lifting the blockade. Germany and Italy halted arriving flights from Britain with Spain and Portugal following suit. The crisis gave renewed urgency to negotiations for a trade deal with the European Union that remained at a critical stage after weekend talks.

    Late Sunday, the Port of Dover stopped freight moved by truck into France while allowing unaccompanied cargo to keep moving. Traffic into the U.K. is unaffected, though truckers often run supplies in both directions and the latest outbreak in the heart of England may discourage them from entering the island.

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    'Politics come first' as ban on Australian coal worsens China's power cuts

    This article from the Financial Times may be of interest to subscribers. Here is a section:

    Yiwu, a city in eastern China known for making products such as flags and badges, has not only switched off all its street lights during the evening but has forced factories to cut working hours by up to 80 per cent until the end of this year.

    “We are not living a normal life when our factory can only work two days a week and the streets are dark at night,” said Mike Li, owner of a plastic flower factory in Yiwu.

    Chinese authorities have blamed these problems on a combination of an unusually cold winter in parts of the country and high energy demand.

    Power plants, however, said their operation had also suffered from the suspension of Australian coal imports.

    Official data show Chinese plants obtained about 3 per cent of their thermal coal from Australia last year. The ratio, said an official at trade association the China Electricity Council, could exceed 10 per cent in more developed provinces that are drawn to the high quality of Australian coal.

    “The import ban doesn’t make economic sense,” said the official.

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    Email of the day - on filling the gap

    Hi Eoin - re the Chart Seminar, which I haven't done for nearly 40 years!! - can you remind us/me the significance of filling the gap (down) - see, for instance, latest movement on CDE US Equity. Thanks and Happy Christmas.

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    Quadruple Witching Roils Stock Market, Sparking Bursts of Volume

    This article by Lu Wang for Bloomberg may be of interest to subscribers. Here is a section:

    Coinciding with the event is Tesla Inc.’s widely-watched inclusion in the S&P 500, a development that alone is estimated to force roughly $80 billion of stock trading. While all the turbulence means headaches for traders, some market watchers view it as the final chance for investors to shuffle big holdings before liquidity thins out into Christmas and the New Year’s holidays.

    “Traditionally these are outsized liquidity days, and following the rebalances we expect liquidity to dwindle into year-end,” Wells Fargo & Co. strategist Chris Harvey said. “In other words, Friday is likely the last opportunity to make major portfolio shifts before the 2020 liquidity window closes.”

    Quadruple witching typically fuels trading as large derivatives positions roll over. While spikes in volume usually occur around the open and close, providing windows of robust liquidity, large price swings can happen suddenly at any time of the day.

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    US 'Has Evidence Russia Breached Its Nuclear Networks' in Massive Cyber Attack

    This article by Matthew Field for The Telegraph may be of interest to subscribers. Here is a section:

    President-elect Joe Biden issued a statement Thursday on “what appears to be a massive cybersecurity breach affecting potentially thousands of victims, including US companies and federal government entities.” “I want to be clear," Mr Biden wrote.

    "My administration will make cybersecurity a top priority at every level of government -- and we will make dealing with this breach a top priority from the moment we take office.”

    Federal investigators have been combing through networks in recent days to determine what hackers had been able to access and how much damage might have done in one of the most serious cyber attacks on the US government in recent years.

    Thomas Bossert, Mr Trump's former homeland security adviser, warned that a Russian cyber attack on the US government could take more than six months to resolve and will require a “staggering effort” to rebuild existing IT systems.

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