The United Nations Development Programme together with the Algorand Foundation are set to launch a blockchain academy in the first quarter of 2024. The objective of the academy is to provide the UNDP's employees “with knowledge and insights into the applications of blockchain technology.”
The United Nations Development Programme (UNDP) recently announced that it will launch the Algorand Blockchain Academy in 2024. The academy aims to provide the UNDP's 22,000-plus employees “with knowledge and insights into the applications of blockchain technology.”
Robert Pasicko, the agency's expert for alternative finance and low-carbon development, said that the academy will offer a curriculum that is comprised of “recorded lectures, interactive workshops, and hands-on assignments.” The course will also be available to staff members of other UN agencies.
Remarking on the academy's potential role in helping to bring UNDP workers up to speed with modern technologies, Pasicko said:
“The Algorand Blockchain Academy will be instrumental in equipping our team with the tools needed to address complex global challenges using blockchain technology.”
Doro Unger-Lee, the head of education and inclusion at Algorand Foundation, stated that his organization considers the education initiative as an important first step “toward identifying and delivering actionable” blockchain solutions. Lee added that these solutions can potentially help the United Nations Development Programme (UNDP) “achieve the sustainable development goals [SDGs] in a number of areas.”
According to the press statement, the academy's initial phase or beta iteration is set to begin in the first quarter of the coming year. Some of the focus areas of the academy's course include the use of blockchain in narrowing the financial exclusion gap, supply chain transparency, real-world asset tokenization, and universal digital identity solutions.
What are your thoughts on this story? Let us know what you think in the comments section below.
Overview: The US dollar is mixed today. The dollar-bloc currencies are firmer, while the euro and yen are softer. We had anticipated a recovery of the dollar on ideas that the market has too aggressively pushed down US rates, and pricing in more Fed easing with higher confidence than seems to be warranted by the recent data. However, US rates have not recovered, but the dollar has. Partly, this reflects that rates have fallen as faster if not faster elsewhere, and especially in the eurozone after last week's preliminary CPI. Among emerging market currencies today, the Mexican peso's 0.20% gain is leading a few currencies higher, but most have a softer tone.
Equities are firmer across the board. Nearly all the markets in the Asia Pacific region were higher, led by a 2% rally in the Nikkei. Europe's Stoxx 600 is extending yesterday's 0.4% gain with another 0.25% increase. US index futures are trading higher. Benchmark 10-year bond yields, on the other hand, are 2-3 bp firmer in Europe. The 10-year US Treasury yield is a about three basis points higher near 4.20% and the two-year yield is up four basis points to about 4.61%. Gold is consolidating inside yesterday range after the extreme price action on Monday. January WTI has slipped lower. It reach almost $71.40, its lowest level since July.
Asia Pacific
Australia reported that Q3
GDP expanded by 0.2%. Consumer
spending and net exports drags. Economists look for more of the same this
quarter. Tomorrow, Australia reports October goods trade figures. This year, the trade surplus is running about 10% less than
last year. Exports have fallen by an average of about 0.8% a month this year
through September. In the first nine months of 2022, exports rose by an average
of 3.1%. Imports have risen by an average of 0.9% a month through September. In
the same period last year, imports for by an average of 1.8% a month. Remember,
these are nominal measures and there reflect price changes as well as volume
changes.
The US dollar is inside yesterday's range against the Japanese yen and Australian dollar in quiet consolidative activity. The greenback looks comfortable in a JPY146-JPY148.20 range. The soft Australian GDP did lead to a weaker Aussie as it seemed within expectations. It held the 20-day moving average near $0.6540. A close above $0.6580 would be constructive. The US dollar reached a two-week high against the Chinese yuan near CNY7.1590. The PBOC set the dollar's reference rate at CNY7.1140 (vs. CNY7.1127 yesterday).
Europe
The eurozone reported that
retail sales in October increased for the first time since May. The 0.1% increase was slightly below
expectations. Recall that last week, Germany reported a dramatic 1.1% increase
in its October retail sales. The median in Bloomberg's survey was for a 0.4%
gain, and September's 0.8% drop was revised to -0.1%. French consumer spending,
a broader measure fell by 0.9% (median forecast in Bloomberg's survey was for a
0.2% decline). Adding insult to injury, September's 0.2% gain was revised to
flat. Spain's retail sales softened by 0.2% in October after posting a 0.2%
gain in September. Italy reports its retail sales tomorrow. They are expected
to have slipped by 0.1% after a 0.3% decline in September.
Germany reported an unexpectedly large decline in October factory orders. The 3.7% decline compares with expectations for a small gain, and the disappointment was not diminished by the upward revision in September's series to 0.7% from 0.2%. There was a 20.2% surge in transport equipment, but was offset by a 13.5% plunge in orders for machinery and equipment. The rise in German retail sales is helpful, but the drop in factory orders suggests the industrial sector is still weak. The economy contracted by 0.1% in Q3 and may be doing the same this quarter.
At the end of last week,
Switzerland reported a 0.5% decline in the EU-harmonized measure of CPI, bringing
the year-over-year rate down to 1.6% from 2.0%. This is the lowest since January 2022. On
December 14, the Swiss National Bank meets (the same day as the ECB and BOE). The
swaps market has about 62 bp of easing priced in over the next 12 months, which
is roughly 2 1/2 quarter-point cuts. While the SNB may temper its September
warning about inflation, it may be in no hurry to claim victory. Energy prices
will increase sharply (18%) in January and the value-added tax will be raised. The
euro has approached the CHF0.9700 area around the third week in November but
turned lower before peaking against the dollar. The euro has returned to the
CHF0.9440 area this week. The year's low was recorded on October 20 near
CHF0.9420. In September 2022, it saw a seven-year low around CHF0.9410.
The euro is lower for the sixth consecutive session. Last week's unexpectedly soft preliminary November inflation report and policy consequences is the key development. Still, today it is confined to about a narrow quarter-cent range mostly below $1.08. Nearby support is seen near $1.0750. Sterling is faring a bit better. The BOE has seemed less dovish and market position adjustment seems less extreme. Sterling is also in about a quarter-cent range (~$1.2590-$1.2615).
America
The ADP private sector jobs
estimate is due today. The
median forecast in Bloomberg's survey is for a 130k increase after 113k in
October. The question is whether it helps in anticipating the BLS figures. In
the last three-months ADP's estimate has averaged 127.3k and year-to-date
222.9k. The BLS report shows the private sector has averaged 153k jobs a month
and 183k over so far this year. The US also reports the October trade balance. The
advanced goods balance deteriorated to $89.8 bln from $86.8 bln and was the
largest shortfall since July. Economists look for around a $3 bln widening in
the overall deficit to $64.2 bln. Through September, the US trade deficit was a
little more than $590 bln, down from almost $738 bln in the same period last
year. Lastly, Q3 productivity and unit labor costs are subject to revisions. These
are derived from GDP and the small upward revision may translate into stronger
productivity and low unit labor costs.
Before the Bank of Canada's
decision at 10:00 ET, Canada's October merchandise trade balance and Q3 labor
productivity is due. Both
have deteriorated this year. Through September, Canada reported a goods trade
deficit of about C$4.2 bln. In the first nine months of last year, Canada
reported a nearly C$20 bln surplus. Labor productivity is expected to have
fallen by 0.6% in Q3, the same as in Q2. It will be the six consecutive
quarterly contraction. In fact, outside of a small gain in Q1 22 (0.1%),
Canada's labor productivity has fallen since H2 20. Turning to the Bank of
Canada, it is widely expected to standpat. The question is how much does
Governor Macklem push back against the market, which is pricing in about a 67%
chance that the first cut is delivered by the end of Q1 24 and the 4 and 1/3 cut
discounted by the end of October 2024.
The US dollar stalled near CAD1.36 yesterday and is holding slightly below today. Initial support, though, is also holding near CAD1.3550. Yesterday's low was near CAD1.3535. A break of it could spur a retest on CAD1.35. The greenback successfully tested its 200-day moving average against the Mexican peso yesterday near MXN17.5650. It was rejected and the dollar is near MXN17.34 in the European morning. Nearby support is seen around MXN17.25-30.
The British pound is showing limited movement on Wednesday. GBP/USD is trading at 1.2582 in the North American session, down 0.10%.
UK Construction PMI barely moves
The UK Construction PMI ticked lower to 45.5 in November, compared to 45.6 in October and shy of the consensus estimate of 46.3. The construction sector has been in contraction for most of the year and the November print marked a third straight month in contraction. The weak housing market has resulted in a decrease in house building and chilled activity in the construction industry.
There was better news from the UK Services PMI on Tuesday, which was revised higher to 50.9 in November, up from the preliminary estimate of 50.5. The PMI accelerated from the October print of 49.5 and indicated expansion for the first time in four months, with a reading above the 50 level which separates contraction from expansion.
The Bank of England has held rates at 5.0% since August, leading to growing speculation that the BoE is done with rate hikes. This has led to expectations of rate cuts in 2024, but Governor Bailey pushed back against such expectations today, stating that interest rates would need to stay at current levels for an “extended period to bring inflation back to target on a sustained basis”.
This was a very clear message that the central bank plans to stick with the “table mountain” approach (higher for longer) and is not considering rate cuts. Inflation fell to 4.6% in October, a sharp drop from the 6.7% gain in decline. Still, that is more than double the 2% target and the BoE is unlikely to trim rates until inflation is significantly lower.
In the US, the ADP employment report showed little change in the November report. ADP is not a very reliable indicator for job growth but is nonetheless closely monitored as it precedes nonfarm payrolls by just two days. ADP eased to 103,000 in November, slightly lower than the downwardly revised 106,000 in October and well off the consensus estimate of 130,000. Nonfarm payrolls is expected to rise to 185,000 in November, up from 150,000 in October.
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GBP/USD Technical
BoC remains committed to hiking if necessary, markets price in March cut
The Bank of Canada continued to insist it remains prepared to raise rates again if needed despite acknowledging that inflationary pressures have eased and higher rates are weighing on the economy and demand. Markets continue to focus on the latter, pricing in a greater than 50% chance of a rate cut in March which will be quite a sharp u-turn from the central bank. I do wonder whether others will take a similar approach next week which leaves very little time to pivot if a March cut is realistic.
Further evidence of cooling US labour market pressures
US stocks are off to a decent start again on Wednesday, buoyed by data ahead of the open that pointed to further weakness in the jobs market and additional disinflationary pressures.
There’s no getting around the fact that the data at the end of the week – US jobs report – is the one everyone is eagerly waiting for but the releases in the interim both fill and void and help to build the case that the economy is a little softer and price pressures are subsiding.
In this case, ADP reported employment gains of 103,000 from a downwardly revised 106,000 in October. As ever, this data should be taken with a pinch of salt when it comes to Friday’s NFP and has at times been a wildly unreliable indicator for it, but it still suggests employment is trending lower.
Revised data on productivity and unit labor costs also surprised positively, with the former exceeding expectations and the latter falling short. This suggests we’re seeing further disinflationary pressures building in the economy which will further enable the Fed to adopt a far less hawkish approach next week.
USDCAD bounces back
We’ve seen a rebound over the last couple of sessions after running into support around the 200/233-day simple moving average band. It’s stabilised after the BoC decision and resistance may now lie around the 55/89-day SMA band.
USDCAD Daily
Source – OANDA on Trading View
The Canadian dollar is steady ahead of today’s Bank of Canada rate decision. Early in the North American session, USD/CAD is trading at 1.3526, down 0.22%.
BoC expected to pause
The Bank of Canada has held the cash rate at 5.0% for two straight times and another pause is widely expected at today’s meeting. With inflation continuing to fall, the markets are pricing in rate cuts in mid-2024 and investors will be combing through the rate statement, looking for a shift in language from the BoC regarding the economy and inflation.
Inflation has fallen to 3.1%, a notch above the central bank’s target range of 1%-3%. A decrease in gasoline prices has helped push inflation lower and barring any major surprises, inflation could hit the 2% target in mid-2024. The BoC has declared inflation its number one priority and as inflation falls closer to target, speculation about a rate cut has increased. The fly in the ointment is services inflation, which accelerated to 4.6% y/y in October, up from 3.9% a year earlier. The BoC is unlikely to consider rate cuts until services inflation shows clear signs of heading lower.
The BoC’s tightening cycle is likely over, with inflation falling and the economy cooling down. Canada’s GDP contracted by 1.1% in the third quarter and unemployment has been moving higher. Central bankers don’t want to be pinned down in case things go sour, and Governor Macklem has repeatedly said that rate hikes remain on the table, but this seems to be lip service as current economic conditions do not warrant further tightening.
The US kicked off several days of employment reports with ADP employment earlier today. ADP is not all that reliable an indicator but can set the tone for what to expect from nonfarm payrolls, which will be released on Friday. ADP eased to 103,000 in November, below a downwardly revised 106,000 in October and well off the consensus estimate of 130,000. Nonfarm payrolls is expected to rise to 185,000 in November, up from 150,000 in October.
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USD/CAD Technical
This is a follow-up analysis of our prior report, "Germany 30 Technical: Bullish momentum remains intact" published on 24 November 2023. Click here for a recap.
The price actions of the Germany 30 Index (a proxy for the DAX futures) have continued to surge upward since our last analysis and cleared above the 16,200 short-term resistance as highlighted in our prior report.
Yesterday, 5 December it managed to have a daily close (closed at 16,534) above the 16,300 major range resistance in place since November 2021 that was tested in July 2023 where it printed an all-time high of 16,530 before it staged a decline of -11.8% in the next three months to print a low of 14,585 on October 2023.
Fig 1: Germany 30 long-term secular trend as of 6 Dec 2023 (Source: TradingView, click to enlarge chart)
The risk of a failure bullish breakout above 16,300 has a lower odd this time round because the long-term monthly RSI momentum indicator has exhibited a bullish momentum reading as it shaped a higher low right at the 50 level and still has further room to manoeuvre to the upside before it reaches its overbought region (above 70 level).
All in all, the Germany 30 Index may be undergoing a major impulsive upmove sequence in place since the October 2022 low of 11,795 within its long-term secular uptrend trend phase from March 2009 low of 3,585. The intermediate major resistance zone stands at 17,780/18,170 (upper boundary of the long-term secular ascending channel & Fibonacci extension cluster).
Fig 2: Germany 30 minor short-term trend as of 6 Dec 2023 (Source: TradingView, click to enlarge chart)
Based on the shorter-term hourly chart, the Germany 30 Index has continued to oscillate within the upper half of a medium-term ascending channel in place since the 27 October 2023 low, and today's price action has ticked higher to print a fresh intraday all-time high of 16,597 at this time of the writing.
The recent exit from its overbought region as depicted by the hourly RSI momentum indicator has not flashed out a prior bearish divergence condition that highlights a higher probability of a minor pull-back in price actions rather than a steeper bearish reversal.
If the 16,440 key short-term pivotal support (also the median line of the medium-term ascending channel) manages to hold, the short-term bullish tone is likely to remain intact with the next intermediate resistances coming in at 16,660/700 and 16,780/850.
However, a breakdown below 16,440 negates the bullish tone to expose the next intermediate support at 16,215 (the lower boundary of the medium-term ascending channel).
The Australian dollar has bounced back on Wednesday and snapped a two-day losing streak. In the European session, AUD/USD is trading at 0.6574, up 0.34%.
Australian GDP eases to 0.2%
Australia’s GDP rose 0.2% q/q in the third quarter, below the consensus estimate of 0.4% and the second quarter print of 0.4%. This was the weakest rate of expansion since Q3 2022, as household consumption showed no growth and exports dropped for the first time since Q1 2022. Despite the weak release, the Australian dollar is higher today.
The soft GDP report points to weak consumer spending, as consumers are being squeezed by elevated borrowing costs and high inflation. In October, headline inflation eased to 4.9% y/y, down sharply from 5.6% in September. The trimmed mean, a key core inflation indicator, ticked lower to 5.3%, down from 5.4% in September. Inflation has been heading in the right direction but consumers are still seeing pricing rising, albeit at a slower pace.
The drop in exports is a worrisome event and is largely due to the slowdown in China, which is Australia’s largest export market. China’s growth has been slowing, debt is rising and the property sector is in crisis with some of the largest construction companies facing bankruptcy. On Tuesday, Moody’s rating agency cut its credit outlook for China from stable to negative. Moody’s maintained China’s credit rating at A1, but the credit outlook downgrade reflects deep concern about the state of China’s economy.
On Tuesday, China’s Caixin Services PMI improved in November to 51.5, up from 50.4 in October. This indicates weak growth, with the 50 line separating contraction from expansion. The manufacturing sector has been a drag on the economy, with manufacturing PMIs indicating contraction in eight of the past nine months.
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AUD/USD Technical
This is a follow-up analysis of our prior report, "USD/JPY: Japan's inflation accelerated, a struggle for bulls at the 50-day moving average" published on 24 November 2023. Click here for a recap.
Yesterday Japan's statistical government agency released November's CPI data for Tokyo, which tends to be a leading economic indicator for Japan's nationwide inflationary environment.
The headline Tokyo's CPI print for November has continued to decelerate to 2.6% y/y from 3.3% y/y in October which indicated the lowest inflationary growth reading in around one and a half-year due to the recent drop in oil prices since late September 2023.
In addition, the Tokyo core-core CPI (after stripping out fresh food and energy components), a closely watched inflationary gauge by the Bank of Japan (BoJ) also slowed to 3.6% y/y from 3.8% y/y in October.
Fig 1: Tokyo CPI readings for November 2023 (Source: Reuters, click to enlarge chart)
In contrast, service prices in Tokyo rose at their fastest pace since 1994 to a record gain of 3% y/y in November, indicating an increase in the odds of sustainable wage-driven inflationary growth that BoJ is monitoring to justify more tweaks to normalize its current ultra-accommodative monetary policy.
BoJ Governor Ueda has stressed in his public speeches that the recent cost-push inflation needs to be replaced by a sustainable demand-driven increase in prices backed by wage gains before BoJ can consider exiting its current short-term negative interest rate policy, an outlier among developed nations.
Another encouraging sign of a potential uptick in demand-driven domestic spending is the recent uptick in consumer sentiment in Japan where it rose to 36.1 in November from 35.7, surpassed consensus expectations of 35.6, and has been on an increasing upward trend since August 2023.
Given the "conservative modus operandi" of BoJ, it is likely that it will not make a significant policy change in the upcoming 18 December monetary policy meeting but keep a lookout on the next meeting on 23 January next year where BoJ will release its latest economic outlook report that highlights latest inflation and growth forecasts.
A rise in inflation forecast for 2024 and 2025 is likely to bring BoJ closer to ending its short-term negative interest rate policy which in turn may kickstart a herding behaviour that favors a potential further strengthening of the JPY.
Fig 2: USD/JPY medium-term trend as of 6 Dec 2023 (Source: TradingView, click to enlarge chart)
The current four-week decline seen in the price actions of the USD/JPY since a test on its major resistance level of 151.95 on 13 November 2023 has reached the lower boundary of a medium-term ascending channel in place since 24 March 2023 low, now acting as a near-term support at 146.20.
The medium-term momentum indicator as represented by the daily RSI is still showing a bearish momentum condition (has not reached its oversold region of below 30 & continued to flash out lower lows since its bearish breakdown below the 50 level).
Hence, the ascending channel support at 146.20 may not be impregnable.
Watch the 148.40 key short-term resistance
Fig 3: USD/JPY minor short-term trend as of 6 Dec 2023 (Source: TradingView, click to enlarge chart)
The short-term downtrend phase of the USD/JPY remains intact as price actions continue to oscillate within a minor descending channel in place since the 13 November 2023 high.
The recent retest near the upper boundary of the minor descending channel on last Friday, 1 December has led to a bearish reaction in price actions that has been accompanied by a short-term bearish momentum reading seen in the hourly RSI momentum indicator (capped by a parallel descending resistance after it hit overbought reading on last Thursday, 30 November).
Watch the 148.40 short-term pivotal resistance and a break below 145.90 may trigger a medium-term downtrend phase towards the next intermediate support at 144.95/80 in the first step.
On the other hand, a clearance above 148.40 negates the short-term bearish tone to see the medium-term resistance coming in at 149.70 (also the downward sloping 20 and 50-day moving averages).
Equity markets in Europe and the US continued to edge higher on Tuesday despite many now questioning whether investors are getting too carried away.
The rally appears to be based on the view that central banks from the Fed to the ECB and BoC will start cutting interest rates in March and then do so another three times over the rest of 2024. That’s quite the difference from what policymakers have insisted on for many months but there has undoubtedly been a change in tone recently.
Whether that’s been enough to warrant such optimism is what many are now questioning and what, I’m guessing policymakers will address at the December meeting. Regardless of whether they push back against the scale of cuts next year, it’s clear now that there’ll be quite a shift from central banks at their meetings this month, based on recent commentary.
Whether that will be enough to constitute the pivot that’s been so talked about this year may well determine whether markets continue to price in a March cut as a u-turn of that magnitude will have to be clear from the meeting. The Fed in September indicated it expected to raise rates again, after all.
Services PMIs revised higher but outlook remains relatively unchanged
There were a lot of upward revisions to the PMI surveys from Europe and the US today and in the all-important services sector. While the revisions don’t really change the outlook in any considerable way – euro area still facing a mild recession, UK flat growth, US resilient – it is encouraging that a soft landing is still attainable.
Nasdaq nears all-time highs
The NAS100 appears to have stalled around 16,000 over the last couple of weeks which may be what’s making investors a little nervous.
NAS100 Daily
Source – OANDA on Trading View
The momentum indicators don’t look particularly healthy either, with both the stochastic and MACD making lower highs during the recent new peak in the price. A negative divergence doesn’t necessarily mean the price has peaked but it may suggest the rally is running on fumes.
In the early hours of Wednesday’s Asian trading session, trading crude oil experienced a decline, reflecting ongoing scepticism surrounding the effectiveness of OPEC+ production cuts. The market also responded to growing concerns about China’s economic outlook. This pushed both Brent crude and US WTI crude futures to their lowest levels since July 6.
Despite OPEC+ agreeing to voluntary output cuts totalling 2.2 million barrels per day for Q1 2024, doubts persist about the full implementation of these measures. n Deputy Prime Minister Alexander Novak’s reassurances failed to sway market sentiment. The upcoming visit of n President Vladimir Putin to key OPEC members is going to include discussions on pure oil market cooperation.
Market concerns deepened with Moody’s downgrade of China’s A1 rating to negative. The downgrade cited increased risks associated with lower medium-term economic growth and ongoing downsizing in the property sector. The upcoming release of China’s preliminary trade data, including trading crude oil, is awaited on Thursday.
Adding to the negative sentiment, reports from market sources revealed an increase in US crude oil and fuel inventories in the week ending December 1. Crude stocks surged by 594,000 barrels, gasoline stockpiles rose by 2.8 million barrels, and distillate inventories climbed by almost 1.9 million barrels. Official US government data on inventories is scheduled for release on Wednesday.
After four consecutive days of losses, oil prices inched up during Wednesday’s Asian trade. Investors grappled with the potential impact of extended OPEC+ cuts on tightening supplies while weighing apprehensions about a deteriorating demand outlook in China.
Recent statements from Saudi and n officials suggesting the possibility of extending or deepening OPEC+ cuts based on the prevailing oil trading platform provided a glimmer of positivity. However, industry experts remain cautious, stating that beyond these statements, no immediate positive catalysts for oil prices are evident.
Worries about the Israel-Hamas conflict’s potential spillover effect on the cheapest oil and renewed concerns after the US attributed an attack on its vessels to Iran offered a temporary respite to earlier price declines.
Despite the marginal rebound, some analysts express bearish sentiments, emphasizing the weak strength of the current uptick. A bearish trend is anticipated, with predictions that oil prices may fall below the $70 per barrel mark.
Ongoing concerns about China’s economic health, which could limit overall fuel demand, coupled with an increase in US crude oil and fuel inventories, contribute to the challenging landscape for trading crude oil. The upcoming release of China’s preliminary trade data and official US government inventory data will likely impact market dynamics.
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