The following article is the rework of the thoughts put forward by Mati Greenspan, the Senior Market Analyst at eToro.
The announcement made by Germany’s largest bank on 7th July 2019, speaks for more than just one banking institution. Reportedly, Deutsche Banks’ investment bank has been reeling under a lot of pressure due to the low rates. Around 18,000 employees are marked for the culling that will take place over the next 2.5 years.
In the past decade, the interest rate set by global central banks has been effectively near or below zero when accounted for the inflation. Hence, imminently it has affected the global trading desks and hedge fund managers. When even a 2% annual return starts to look incredibly attractive, it’s clear that there’s very little meat on the bones.
The Good Bad News
Nevertheless, the Non-Farm Payroll (NFP) is very high compared to the Fed’s estimation; the US market is entering a paradoxical situation. To what economists are hailing as good bad news, has created a very tight position for the US Federal Reserve Chairman, Jerome Powell.
Furthermore, the Turkish President has sacked the head of the Turkish Central Bank as the sovereign currency Lira continues to decline.
There is a bigger evil at play here. The old financial system is dying a slow death. Let’s hope the new one is brighter.
Bitcoin Reaches Tipping Point
The crypto market continues to consolidate the massive gains that have been accumulated so far this year; it seems like the pattern is coming to a point. As reported on CoinGape, analysts see massive volatility in Bitcoin price in the near future.
Many traders will take a breakout of this classic chart formation as an indicator for the next direction. Moreover, while the buying interest in Bitcoin is on the rise, traders have also been trying to catch the bottom since the beginning of the year. However, Bitcoin’s rise has followed only one direction for the most parts of Q2 in 2019.
The trading volume on Bitcoin is also increasing on the peer-to-peer platform, Local Bitcoins. It now spiked to its highest levels since November.
What are some of the significant reformations you expect in the new financial system? Please share your views with us.
Mati Greenspan is the Senior Market Analyst at eToro, a global social trading and investment platform. Mati is a licensed portfolio manager in the European Union and his main focus is on macroeconomic analysis, portfolio diversification and cryptocurrencies. Follow him on Twitter at @matigreenspan