HSBC has said it will prevent clients from purchasing and moving shares of MicroStrategy into their InvestDirect accounts, according to a March 29 message viewed by Reuters that referred to the stock as a “virtual currency product.”
The decision comes amid a broader move by HSBC to limit cryptocurrency trading.
“HSBC has no appetite for direct exposure to virtual currencies and limited appetite to facilitate products or securities that derive their value from VCs (virtual currencies),” HSBC said in the same statement viewed by Reuters.
HSBC did not immediately respond to Insider for comment.
HSBC’s move goes against the wave of institutions and major corporations adopting bitcoin. Heavyweights including Goldman Sachs, Bank of New York Mellon, Tesla, PayPal, and Visa have started facilitating transactions in the coin, or accepting it as payment.
HSBC closed its main office in Hong Kong until further notice on Tuesday after three people working there tested positive for COVID-19.
The region’s Centre for Health Protection (CHP) published a formal notice asking people who spent more than two hours in the building between March 3 and 16 to be tested at a government-approved center by March 19, according to an internal memo HSBC sent to staff on Wednesday seen by Bloomberg.
The new infections followed a COVID-19 outbreak last Thursday at a gym in Sai Ying Pun, which has spread to the region’s financial district.
The CHP said Tuesday it was investigating 18 additional confirmed infections of the virus, taking the total number of cases in Hong Kong to date to 11,340.
“It is our understanding that HMB can return to normal business when virus testing of colleagues and deep cleaning of the facility are complete,” HSBC said in the memo. “The exact timing is yet to be confirmed.”
Around 30,000 HSBC employees now have no access to the lender’s flagship office, located at 1 Queen’s Road Central, in the center of Hong Kong’s business district.
Guards wearing masks, face shields and protective clothing were standing in front of the building’s entrances and a poster stuck on the door told customers to visit another HSBC branch in the local area, Bloomberg reported.
Insider approached HSBC for comment but did not immediately receive a reply.
A spokeswoman from the bank told Bloomberg that HSBC was following advice from health authorities and taking the necessary steps so the building can reopen when it’s safe.
“For banking services, we have well-developed contingency measures that ensure our services and critical processes continue to be maintained,” she said.
Hong Kong, with a population of 7.5 million, has kept coronavirus cases low thanks to strict contact tracing, testing and quarantine measures. There have been 203 deaths in the city, according to the CHP data.
The US dollar immediately jumped after Friday’s blowout US jobs report for February. HSBC says that the move suggests prospects for US economic growth — or a theme of “US exceptionalism” — rather than risk appetite, are beginning to gain influence over the direction of the greenback.
Risk appetite, or RORO, — the investment bank’s shorthand for “risk on-risk off” — was the dominant influence over the dollar throughout 2020, leaving the safe-haven greenback down relative to other currencies. But the battle during 2021 has turned “finely balanced” following hints that the US exceptionalism theme that stokes dollar buying and strength appeared to be growing in sway.
“One of the key aspects of the dollar is normally ‘the trend is your friend’. And, of course, if that trend is ebbing or that momentum is not what it used to be, it’s causing a little bit of head-scratching and maybe an identity crisis for the dollar as to what matters,” Daragh Maher, head of FX strategy at HSBC, told Insider, outlining the bank’s new method of tracking what’s driving the dollar.
“So what we tried to do is say, ‘Let’s be dispassionate and just see how the dollar is actually behaving. What is the FX market telling us?” he said. The new DRIVERS (Dollar Response In Various Economic Release Surprises) signal includes measuring the dollar’s price action for 60 seconds against seven other currencies after an upside data surprise then comparing that with a level recorded a minute before a data release.
“What you’re trying to catch is people’s reflex rather than their more measured assessment,” Maher said before the Labor Department on Friday released its monthly employment report.
Jobs climb, dollar leaps
The report showed the US economy added 379,000 jobs in February, trouncing expectations of 200,000 new jobs.
“The USD rallied initially after stronger US employment data, suggesting the theme of US exceptionalism is becoming more influential,” HSBC said in a statement to Insider on Friday.
The rally underscored RORO’s stalled momentum this year in guiding the dollar’s direction. RORO is built on the theme of global reflation and is characterized by broad selling and weakness in the dollar after strong US economic data.
“What’s going on is people are thinking, ‘Hey, the US economy is doing much better, which means the global economy must be doing much better. So I’m going to start buying some riskier assets, which means I don’t need to hold a safe haven like the dollar,'” Maher said.
RORO’s influence last year in weakening the dollar had risen so much that its hold on the greenback tightened to levels not seen since 2013, HSBC said in a March 1 research note.
Separate from HSBC’s analysis, the widely watched US Dollar Index ended 2020 by sliding 13% from mid-March 2020. That month, the index hit a three-year high on surging demand for dollars as the pandemic accelerated. So far in 2021, the index has gained more than 2%.
But the dollar’s leap after Friday’s jobs reports highlighted that traders were reacting to greater optimism about US growth partly as the US government moves toward unleashing a $1.9 trillion fiscal stimulus package to combat the economic pain inflicted by the pandemic.
Growth prospects, in turn, can fuel speculation about the Federal Reserve’s next move on monetary policy. That perhaps “brings forward that taper conversation again. It brings forward people’s expectations of when US rates might go up,” said Maher. An interest rate hike by the Fed and tapering, or reducing, of the central bank’s bond purchases, could boost the dollar’s value and appeal.
Maher said HSBC is not forecasting outright dollar strength this year. “What we’re suggesting is that this shift in relative influence will put a floor under dollar selling.”
The US exceptionalism theme took a brief hold over the dollar early in 2021 after some Fed officials indicated upside data surprises could lead to bond tapering this year. However, other Fed officials, including Fed Chairman Jerome Powell, pushed back against the taper talk.
“Over the next six months or so, we would expect to see some additional modest dollar weakens,” Maher said. “But as the US economy continues to recover — potentially boosted by additional fiscal stimulus – the narrative of Fed tapering and US exceptionalism is likely to become more influential towards the tail-end of this year.”
The DRIVERS signal tracks the dollar’s performance against the euro, the Japanese yen, the British pound, the Australian dollar, the Canadian dollar, the Swiss franc and the Mexican peso. HSBC tracks 30 data constituents of its US Economic Activity Surprise Index for DRIVERs.
His Royal Highness The Prince of Wales has unveiled a new sustainability charter, named “Terra Carta,” backed by leading international businesses, including Bank of America, BlackRock, Unilever, AstraZeneca and BP.
The charter, designed by Apple’s former Chief Design Officer Sir Jony Ive, is a 10-point roadmap to 2030 for businesses, supporting the likes of the Paris Climate Agreement. With nearly 100 actions for businesses, the plan should act as a “basis of a recovery plan that puts Nature, People and Planet at the heart of global value creation,” according to a press release. Each actor was given a framework for their individual plans, it said.
This publication is the latest endeavour by Prince Charles to support sustainable practices in the private sector, following his speech at Davos in January 2020 and the creation the Sustainable Markets Initiative.
“The ‘Terra Carta’ offers the basis of a recovery plan that puts Nature, People and Planet at the heart of global value creation – one that will harness the precious, irreplaceable power of Nature combined with the transformative innovation and resources of the private sector,” HRH The Prince of Wales will say at a One Planet Summit event.
One of the initiative’s aims is to drive investment into Nature-based and engineered solutions that address the climate and biodiversity crises. To that end, Prince Charles’ SMI created the Natural Capital Investment Alliance, which seeks to increase natural capital allocation by $10 billion by 2022.
Natural capital is the term used to describe the stock of combined resources that make human life on Earth possible. For example, plants, animals, minerals, soil, air and water.
The alliance, founded alongside HSBC Pollination, Lombard Odier and Mirova, will also pursue natural capital investment through corporate offsetting and carbon pricing prospects.
Terra Nova’s supporters already include some of the biggest businesses in the world, with Brian Moynihan, Bank of America’s CEO and Chairman, calling it “a comprehensive roadmap for the private sector to help drive toward a sustainable future.”
“By aligning development objectives within our operating models the private sector can marshal the resources that will be needed to reach the development goals. HRH Prince of Wales’s leadership and commitment has created a spirit of possibility that business leaders are proud to join,” he added.
Commit to rapidly accelerating the world’s transition towards a sustainable future.
Recognize that ensuring the integrity of all ecosystems, on land and under water, requires that climate, oceans, desertification and biodiversity be treated as one common system and addressed simultaneously.
Acknowledge that we need to make health our goal; individual health, community health, economic health and the health of our Natural resources (e.g. soil, air and water).
Recognize the importance of ‘local’ – local traditions and culture, local products, local jobs and local sustainability – and how these ‘locals’ connect and support each other in the wider tapestry of regional and global systems.
Acknowledge that Nature underpins the inherent prosperity, wellbeing and future of all people and the one planet we share. Further, that the restoration of the natural world is of common benefit to all humankind irrespective of borders.
Acknowledge that the required global trajectory is a sustainable one, where the private sector has a critical role to play. To accelerate along this trajectory, a ‘future of industry’ and ‘future of economy’ approach must be taken.
Take into account the need to ensure a skilled workforce and cadre of leaders that are prepared to participate in a fair, equitable and just transition towards a sustainable future.
Recognize that to scale sustainable solutions and investment, cross-border and longer-term ‘mega’ projects need to be explored underscoring the importance of public, private and philanthropic collaboration.
Acknowledge the need for net zero commitments to be achieved by 2050 or sooner. Setting more ambitious timelines, such as 2035, emphasizes and catalyzes immediate action, continuous innovation and improvement.
Undertake to collaborate, share knowledge and ideas to propel the world towards sustainability at a faster pace through public, private and philanthropic collaboration.