Trump’s expectation, Bitcoin rally and crisis forecasts

15 мая 2019 г.

Trade war discussion is been #1 on the financial markets. However, the tension has been falling down so far. Tramp has decided to change the tactics. He said that takes a positive attitude towards meeting with Xi Jingping (will take place next month at the G-20 summit). Therefore, the markets were confused. And have no idea what to do next.

The apocalyptic predictions were made by analytics in case of extraordinary scenario.

On Morgan Stanley’s strategist Mike Wilson point of view, the escalation of trade dispute boosted the likelihood of economic slowdown. John Normand (JPMorgan Chase & Co) believes that “the risk is that some important indicators that are influenced by the exchange of tariffs, approach crisis levels. These are an industrial activity, business indices, capital costs and corporate profits.”

Recall that Wall Street analysts have been signaling of a recession, but so far they have not received actual confirmation.

Cryptocurrency market has been enveloped in inspiration and optimism. The price for Bitcoin has raised above 8000$, giving a fresh boost to the cryptocurrency market. However, there were no reasons for that. Just because a huge amount of those was said like the flight of investors in cryptocurrency after the trade war’s intensification, a general decrease in investor anxiety about cryptocurrency or market resilience to negative news - after a series of scandals around the cryptocurrency market, including hacking and hacker attacks, cryptocurrency prices did not come down. On the other hand, those reasons could not boost a cryptocurrency market’s sharp rise.

Another reason might be “loss of profit syndrome ”. Investors still remember l how Bitcoin rose from 800 to 20,000 over the course of a year, literally and are afraid of being late with entering the position. That is, the rush demand for a cryptocurrency this week is the result of a set of fundamental factors as the effect of the crowd multiplied by greed and fear of being late for the departing train. We do not practice trading on emotions and behavioral deviations. Therefore, we are extremely skeptical about the current rally.

meanwhile, the pound continues to be under pressure. The reasons are the lack of progress in Brexit. Yesterday, wage growth in the UK was a problem for the pound, which turned out to be much worse than expected. Our positions on the pound are on pause so far - we are waiting for the end of its sales, to buy cheaper.

Following Tuesday, our trading preferences have changed: we will look for points for buying the euro against the dollar, sale oil and the Russian ruble, as well as buying of gold and the Japanese yen, but so far we will wait a little with buying the Australian and Canadian dollars.