1 Minute Market Rundown – 15th August 2022
Equities Continue to Rally
USD Exceptionalism
ETH Sells Off as BTC Tops Out
Happy Monday all, I hope everyone had a great weekend.
Equities continued their impressive rally on Friday with the S&P now back toward 4300 and the Nasdaq back above 13000. Commodities, in particular oil prices, remained under pressure which helped boost risk markets.
This year thus far has been characterised by high inflation, negative risk sentiment and a stronger USD – i.e. USD positive stagflationary momentum. One would be forgiven for expecting in this period of positive risk sentiment, we find ourselves in, that the USD would come under pressure. Alas, the market is not here to please us. It seems the USD exceptionalism story is still here to stay. When I truly take a step back, I guess that is just not that surprising. Compare the US economy to that of the UK or the Eurozone or even China, zero covid policy just isn’t conducive to an economy’s improvement, and the USD remains appealing. The USD play has been, dare I say, easy this year but it is now much more two way.
As such I find myself wanting to avoid the USD for now and instead trade the crosses. I am short EUR/CHF and am looking to enter a EUR/AUD short. Data last week showed Australia registered a new record monthly trade surplus which will benefit the AUD. Their economy’s strong supply side performance will also support the currency.
Crypto finds itself under pressure this morning. The moves are being attributed to the news on twitter that an Ethereum Genesis ICO giant whale address just became active after 3 years of dormancy. Now I am not saying this isn’t the case but I will also draw your attention to the fact BTC traded to a high of $25,200 – bang on its resistance level. I feel it is also a market that is just tired and has lost a bit of upward momentum – especially in ETH. ETH’s show stopping run of late has been due to the merge and it is unlikely it continues at that pace. We have bought BTC/EUR on the dip this morning with a very tight stop through 23,300 looking for a move to 24,200.
As always, good luck out there.
Lux Thiagarajah – Head of Markets
BCB Group comprises BCB Prime Services Ltd (UK), BCB Payments Ltd (UK), BCB Digital Ltd (UK) and BCB Prime Services (Switzerland) LLC. BCB Payments Ltd is regulated by the Financial Conduct Authority, no. 807377, under the Payment Services Regulations 2017 as an Authorised Payment Institution. BCB Prime Services (Switzerland) LLC, a company incorporated under the laws of the Swiss Confederation in the canton of Neuchâtel with business identification number CHE-415.135.958, is an SRO member of VQF, an officially recognized self-regulatory organization (SRO) according to the Swiss Anti-Money Laundering Act. This update: 14 Oct 2020.
The information contained in this document should not be relied upon by investors or any other persons to make financial decisions. It is gathered from various sources and should not be construed as guidance. The information contained herein is for informational purposes only and should not be construed as an offer, solicitation of an offer, or an inducement to buy or sell digital assets or any equivalents or any security or investment product of any kind either generally or in any jurisdiction where the offer or sale is not permitted. The views expressed in this document about the markets, market participants and/or digital assets accurately reflect the views of BCB Group. While opinions stated are honestly held, they are not guarantees, should not be relied on and are subject to change. The information or opinions provided should not be taken as specific advice on the merits of any investment decision. This document may contain statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, new legislation and regulatory actions, competitive and general economic factors and conditions and the occurrence of unexpected events. Past performance of the digital asset markets or markets in their derivative instruments is not a viable indication of future performance with actual results possibly differing materially from those stated herein. We will not be responsible for any losses incurred by a client as a result of decisions made based on any information provided.
