FINANCIAL NEWS – HOT TAKE 23.04.2021

There’s been some very interesting headlines in financial markets this week, and it can be difficult focusing on the important facts through all the noise. Let’s have a look over what has happened in the markets this week!

BTCUSD TAKES A DIVE ON HEADLINES

Bitcoin has taken a large tumble this week, testing support at 50,000 USD following a series of headlines aimed at the largest crypto currency. 

  • Copyright Claims:  Craig Wright, an Australian computer scientist claims that he created BTC, under the pseudonym Satoshi Nakamoto in 2008, serving a copyright claim in London’s high court. The case will require the court to make a ruling on who created Bitcoin, a mystery that has been hotly debated for years.
  • Rumours of Crypto Tax: The rumour mill is at work, with ForexLive reporting rumours for a US 80% tax on Crypto Currencies. Whilst this sounds quite sinister for crypto markets, one of the beautiful aspects of crypto currencies is the ability to easily move them internationally (to tax lenient nations). 

COVID 19 & VACCINE UPDATES

There have been a number of updates this week in global efforts to quash the pandemics spread, and speed up the vaccine’s spread. A quick vaccine rollout is considered key to economic recovery from Covid 19, especially in hard hit areas such as the USA, EU & India. 

  • USA Updates: Johnson & Johnson’s vaccine expected to be approved again for use as early as this weekend. The approval may come with some restrictions or product warnings. A CDC advisory Panel will be meeting today US time. 
  • Australia: Currently last in population weighted vaccine rollout performance. That said, Australia has very low community transmission cases, and economic data has measured a healthy economy.
  • EU: Lagarde confirms pandemic restraining economic recovery, near term outlook is uncertain. Fiscal measures should be targeted & temporary in reaction to the changing pandemic cases.

US CAPITAL GAINS TAX DEBATE

The next phase of Biden’s $4 trillion move to revamp the US economy will raise taxes on millionaire investors to fund education and other government spending plans. There has been no mention of expanded health care or attention to the broken American pharmaceuticals industry.

  • Increases top marginal income tax rate to 39.6% from 37%
  • Capital gains tax to 39.6% from 20% (for those earning over 1 million USD)
  • Goldman Sachs finds a 28% capital gains tax most likely.

In other news google searches for “Cayman Islands banking” have doubled this week (Only kidding!).

FOREX MARKETS UPDATES

So far this week we’ve seen most major FX pairs move sideways in medium size ranges. There has been a slight USD & JPY weakness.

  • AUDUSD -0.10%
  • EURUSD +0.40%
  • GBPUSD +0.23%
  • NZDUSD +0.62%
  • USDCAD -0.12%
  • USDCHF -0.23%
  • USDJPY -0.72%
  • XAUUSD +0.61%

There have also been some large moves this month:

  1. XAGUSD +7.56%
  2. XAUUSD +4.71%
  3. NZDUSD +2.65%
  4. EURUSD +2.48%
  5. EURGBP +1.96%
  6. EURCAD +1.86%
  7. AUDUSD +1.66%
  8. USDCHF – 2.82%
  9. USDJPY – 2.48%
  10. CADJPY – 1.88%

Markets have reduced volatility in recent months compared to 2020 trading, however there have been large moves in TRY pairs, due to the sacking of the Turkish Central Bank president. Let’s hope we see some strong trends carry through May!

Published by Tom Stewart

Head of data analytics at TradeProofer. Analyst at Opes Trading Group. FX enthusiast.

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