Market Brief May 16th: Bitcoin viewed more seriously by policy makers
Bitcoin – A major news outlet, CNBC, reports that a top U.S. policy maker commented positively on the crypto currency as a potential threat to the almighty U.S. dollar. A major advantage over the greenback has been stressed the ease of transaction and trade facilitation seen by Bitcoin so far. On the other hand, the dollar has always had the solid support of the largest economy in the world, the United States. There are pros and cons to both forms of exchange. The question is which one would receive higher support and trust from the financial sector and people.
JPY, 00:50 a.m. GMT + 1 GDP (QoQ) (Q1) P – GDP measures the change in the total production of goods and services for the first quarter of 2018. Market analyst expectations show a decrease in gross domestic product at 0.0% compared to 0.4% that came in for the last quarter of 2017. If the actual performance is higher than projected, this should be read as a bullish sign. Inversely, a considerable slowdown should be seen as bearish for the Japanese yen.
EUR, 10:00 a.m. GMT, ECB President Draghi Speaks – the president of the European Central Bank has the power and influence to set short-term interest rates. Interest rates, as you know, are a direct reflection of the state of the economy. A stronger (i.e. higher rate) suggests a stronger currency. And vice versa, lower rates (or even negative ones) should be seen as having a negative impact on the common Euro Zone currency.
The United States
USD, 13:30 p.m. GMT, Building Permits (Apr) – a key indicator of demand in the housing sector, Building Permits measures the change in the number of permits issued by the government for the month of April. Forecast suggests a decrease in the number of permits at 1.350M compared to 1.379M for the month of February. If the event is reported to miss expectations and permits have gone down even lower, this should be read as a bearish sign for the dollar. A much stronger result, on the other hand, is to be read as a positive factor for the dollar.
USD, 15:30 p.m. GMT, Crude Oil Inventories – WTI now trades above $70 for a barrel of crude oil. Prices have been accelerating and they’ve been accelerating fast. Analyst forecast for the change in the level of inventories shows an expected increase at -1.467M compared to the reading report which came out the week before at -2.197M. The higher the level of inventories, the larger the supply and consequently the prices should go lower as the value of oil would drop due to an oversupply. If, however, there is a large cut to oil production, this should send prices surging higher (as supply would be scarce and demand a lot higher).
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