Crypto currencies: perspectives and risks (3)

Almost all well-known investors, including Warren Buffett and George Soros, and global investment companies, including JP Morgan, Morgan Stanley (NYSE: MS), Goldman Sachs, spoke about the prospects of bitcoin. In general, the attitude of classical investors to cryptocurrencies is cautious - many call the crypto-market a "bubble" and wait for its fall. In bitcoin and the prospects of blockchain technologies, a new wave of young investors believe, mainly. The number of medium and large investors in bitcoin is only a few million. In the future, the "pool" of investors in bitcoin should grow (and with it the cost of bitcoin), but so far this jump has not occurred. It is possible, in a few years, bitcoin will change its status in the eyes of people - it will not be an asset (a means of investing funds), but a means of payment.

Crypto currencies: perspectives and risks (2)

Another problem for bitcoin - scalability. At the end of last year, due to this, the time and cost of transactions using bitcoin increased. If the bitcoin community resolves this problem, it will be a positive for the bitcoin rate.
Quite possible scenario is that the world will come up with a new digital currency that will solve all the problems of its predecessors and take a place under the sun among the cryptocurrencies. This will try to swing the crypto currency Gram, which is associated with the personality of Pavel Durov. It is planned that Gram will be given a guarantee of making payments and solved the problem of lack of space for storing all records. If this is implemented, the system will be able to process a million transactions a second, and commissions will be low - a real breakthrough in the financial world. ICO Gram is scheduled for the coming months.

Oil rises for the third quarter, for the first time since 2010

Oil rose and traded more than $70 a barrel for a third consecutive day as a result of backing tensions around the Middle East. And while oil production grows fast, investors remain cautious.
Brent added 28 cents, or 70.4 dollars a barrel, while US crude rose 19 cents to 65.74 dollars a barrel.
Oil prices rose by more than 7 percent since the beginning of the month, following an increase of 5.3 percent in the first three months of the year. This allows it to register a third consecutive quarter of growth, something the market has not seen since 2010.
Geopolitical tensions and expectations of trade wars largely support the cost of raw material.
Brent traded at levels above $70 a barrel for the second time this year, from the end of 2014. Experts say this high oil price may not last too long.

Crypto currencies: perspectives and risks (1)

After increased volatility last year, in recent months the bitcoin rate has stabilized in the $8000- $11000 range. In February-March the amplitude of fluctuations decreased - at the current moment bitcoin found a stable level in the $9000 area. Stabilization in the crypto-currency market may last several months, but then the exit from the "outset" with a sharp rise up or down is inevitable anyway. Where goes bitcoin - up or down - will largely depend on the position of the world authorities in relation to the cryptocurrency.
Since the end of last year, we have seen how the Chinese and US regulators tried to introduce some regulation in the sphere of crypto-trade. Their example was followed by other countries. In particular, we recall that the US exchanges introduced verification of all users, after which investors began to prefer Asian crypto-exchanges. Because of anonymity and decentralization, it seems impossible to completely drive crypto-world into a rigid regulated framework. The authorities have a choice: either follow the path of tightening regulation, or lead that which can not be defeated. Exactly how the comma in the sentence "To prohibit can not be resolved" will be put, the dynamics of bitcoin this year will depend.

Exceptional growth for indices, the yen is cheaper

US indices rose sharply, and the dollar appreciated against the Japanese yen as a result of moderate optimism to find a way out of the potential trade war between the US and China.
More and more reports are being made of "quiet diplomacy" between the US and China to find a compromise on trade relations between the two countries.
The dollar index, which measures the performance of green money against the six major currencies, fell to 89.208, down from 89.49 at the end of last week.
The euro returned again at trading levels above 1.2400 against the dollar, while the British pound traded at 1.4221, compared to 1.4133 late on Friday.
Concerns about potential trade wars between the US and China, and other markets have triggered a rise in rescue currencies such as the yen and the Swiss franc.
However, with lower fears, investors reversed the dollar again to the Japanese yen. This led to a significant rise and three-digit growth in US indices, including the Dow Jones blue chip index.
US indices were close to "over-sold territory," after their fall in recent days, prompting many investors to target them in search of upward correction, according to market observers.

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OPEC disputes

These days the oil segment has received a new food for thought, which makes players think about longer-term prospects for black gold. In particular, within OPEC there were contradictions in the question of the relevant price. Iran's oil minister believes that the cartel should support quotes at around $60 per barrel, explaining this by the fact that higher levels will lead to an even more active increase in production in the US shale fields. According to some estimates, if the average price of oil is $70, next year, Americans will produce 600 thousand barrels per day more.
Meanwhile, his Saudi colleague stands for oil at $70. Recall that the kingdom pursues its internal interests - the government needs larger oil revenues to finance large-scale economic reforms and IPO of the state oil giant Saudi Aramco. By the way, recently there were rumors that the initial public offering of the company's shares will be postponed to 2019, which means that Saudi Arabia will fight for higher prices longer than previously thought.
The emerging split in the cartel does not predict good news for energy prices. If Iran finds like-minded people in its initiative, which implies easing of restrictions in the deal, high discipline in the format of OPEC+ may be threatened. Then the level of $70 per barrel, above which Brent did not rise since the beginning of February, will become illusory for the market if the Saudis do not take measures that will strongly impress buyers or there will not be a large-scale supply disruption on a geopolitical basis.

Analysis on pound

While the pound remains below 1.3950, it is vulnerable to further downturn, but if it breaks above this important level, it can expect more substantial recovery. Negotiations on the withdrawal of the UK from the EU are not going well, as the parties are still unable to reach an understanding on the single market, the customs union and the border between Ireland and Northern Ireland. Last week, there was no progress, and neither side is going to step back. The next important date for negotiations is March 22, when EU leaders will meet in Brussels to sign an agreement on the beginning of the transition period. They will also discuss the basic principles of conducting further negotiations on a number of issues, including trade.
The British economic data was not bad: activity in the service sector accelerated, judging by the latest index, and although the trade balance deficit has slightly increased, the volume of industrial production fell back at the beginning of the year. As there will be no fresh data in the UK this week, the GBP outlook is entirely dependent on the demand for the euro and US dollar. I expect that EUR/GBP will continue to fall in price.

Forecast on USD/CAD

The Friday report on employment in the non-agricultural sector of Canada was mixed: the unemployment rate declined, the number of employed dropped, the number of full-time employees declined. Nevertheless, after five months of relatively strong growth in the number of full-time employed, this drop is very modest. This week in Canada, there will be no fresh data, so the focus will be the speech of Bank of Canada Chairman Steven Poloz today. If his rhetoric is more "hawkish" than the rhetoric of a monetary policy decision, USD/CAD can quickly reach 1.2700.

AUD/USD forecast for the week ahead

Australia's GDP growth slowed in the fourth quarter, and retail sales grew less than expected, but investors are optimistic because of the statement by Reserve Bank Chairman Philip Lowe that the next change in rates will be more, and not less, as the economy moves in the right direction. This, in particular, indicates that the growth in spending in non-extractive industries is now the largest since the financial crisis. Nevertheless, for the time being, the central bank adheres to a neutral position. This week, the focus will be the speeches of RBA officials Michelle Bullock, Christopher Kent and Guy Debell. From a technical point of view, higher highs and lows indicate further strengthening of AUD/USD, which should reach at least 0.79.

Forecast on USD/JPY

The Friday report on employment in the US did not have a significant impact on the currency market, only confirming the presence of positive changes in the economy of the country. In February, 313,000 jobs were created, which was the biggest monthly increase in 3,5 years. Although the unemployment rate has risen, and wage growth has slowed, the main thing is that these figures are high enough for, the Federal Reserve to raise interest rates later this month. Activity in the service sector continues to grow at a healthy pace, and judging by the Beige Book, the economy to grow modestly or moderately from January to February, and the narrowing of the gap between supply and demand in the labor market to lead to higher wages and inflation.
This week, the focus will be on inflation and consumer spending for February. It is expected that the costs will roll back after the fall at the beginning of the year. As in the case of the employment report, if data on consumer prices or retail sales are not horrible, Fed Chairman Jerome Powell will raise interest rates this week for the first time after his promotion. USD/JPY rose at the end of last week and could reach 108 if US stocks continue to strengthen.

$800 for 1 hour and 24% for two weeks - the bitcoin reminded of itself

The cost of a bitcoin reminded investors how volatile it could be. Yesterday, the bitcoin lost $800 for an hour, momentarily reaching $9,000 a coin. Subsequently, the bitcoin recovered some of the lost, returning to levels of 9,300 dollars.
According to CoinDesk, the cost of the bitcoin fell to the lowest value of $9,075 before it recovered.
The yesterday's depreciation in price was exceptional as the cryptocurrency was traded at about $10,000 earlier.
In addition, it happened on a day after the fall of $1,000. Or, the investors were reminded of a very painful way, how volatile the price of cryptocurrency might be.
However, the decline in the bitcoin has not been limited to the last two days. The cryptocurrency continued its way down and was trading this morning at $8,700 a coin. Thus, from the beginning of the week, the largest digital coin lost 24% of its value.
According to market observers, the depreciation of the bitcoin on Wednesday was predetermined by several factors. First of all, the news that $400m worth of bitcoins were liquidated by a representative of the failed Mt Gox stock market, which has flooded the cryptocurrency markets.
However, it is much less clear what caused yesterday's $900 depreciation, in a very short period of time.
More and more analysts are predicting a further depreciation to $7,000.

The ether is on its way to $700

The cryptocurrencies restored their fall with full force after the bitcoin fell back below the psychological limit of $10,000.
As Jeffrey Gundlach says, if you want to look for the direction of the US indices, turn to the bitcoin. And what happens in the bitcoin is definitely not good for the US indexes.
The latter declined after the news that Trump's economic advisor resigned and raised the fears of cruel trade wars.
Yesterday the ethereum fell by more than 7% and traded at levels of 740 dollars per coin. Tech analysts, who think we are going to see a test at the $700 psychological limit for a coin, are becoming more and more.
The strong recovery of the ethereum from last month lost its energy at the highest value of $982 for a coin on February 18th. Since then, the cryptocurrency has lost 19% of its value.
According to technical analysts, however, the bad news about the ethereum may not end here. It is quite possible to see a test of psychological support at 670 dollars per coin.
The decline of the ethereum was largely determined by the depreciation of the bitcoin. The latter did not overcome the $12,000 psychological limit, after two attempts, and pushed down strongly.
Now, the cryptocurrencies traders still have to hope that the bitcoin will not be reduced to less than $9,300 to keep the potential flag figure. Otherwise, we may witness further severe impairment, with the bottom at $7,000.

The EU responds to Trump

The President of the US, obviously, thinks he can do whatever he wants without consequences. It turns out, however, that this is not the case and the EU is about to respond in the most unprecedented way.
EU countries intend to target imports of goods worth 2.8 billion euros from the US, ranging from T-shirts and whiskeys to bikes, if Trump continues his plan to impose a 25% import duty on imported steel.
EU countries are planning to impose reciprocal duties on consumer goods imported from the US, including agricultural and steel products.
These tariffs have been discussed between the European Commission and the EU government on Monday in Brussels.
European regulators target imports from the US, including t-shirts, jeans, cosmetics and other consumer goods, bikes and boats, worth around 1 billion euros. Targets include orange juice, bourbon, corn and other agricultural products worth 951 million euros, including $854 million in steel and industrial products.
Trump's plans to levy import duties on foreign steel products, has already met serious opposition, even in his own party. Such actions, according to political observers, risk starting a trade war as well as triggering a number of complaints in the World Trade Organization against the United States.

The Yen - the greatest winner of future trade wars

Last week, President Trump shook the market with the imposition of imported duties for steel and other products. This immediately triggered talks about potential trade wars that have affected currency markets.
The potential US involvement in a trade war with other countries around the world has led to serious sales of US stock markets.
One currency, however, wins against all the tensions and has seen a serious appreciation over rivals. And that was the yen. According to investors and analysts, however, the appreciation of the yen is just beginning.
These events are largely reminiscent of what happened in the early 1990s when the US took protectionist measures against Japan.
The yen reached a record high of 79.75 yen per dollar in 1995, when similar protectionist actions were taken by the United States.
The proposed tariffs can reduce the US economy's growth by 0.2 percentage points next year, posing additional threats as to how US trading partners will react, analysts at Barclays Plc say.
In search of security, the traders turned to the yen, the Swiss franc and the euro. Trade-sensitive currencies, like the Canadian dollar, also declined.

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