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Please note: All data, figures & graphs are valid as of July 30th.
Today is the calm before the Fed. Usually, markets are pretty docile ahead of a big central bank meeting and with the Fed expected to cut rates tomorrow, this meeting is HUGE.
That’s not to say we won’t get any action. There are plenty of other drivers that can shake things about. The Pound, for example, is tanking this morning and is now close to testing the postreferendum levels of early 2017 (red line). A drop below 1.20 would be particularly nasty as there are no support levels beyond this point.
Also, today will be one of the busiest days for earnings announcements with dozens of companies reporting their revenues for Q2. The cherry on the top is Apple of course, who has been shifting focus away from iPhone sales and attempting to position themselves as a services company. So, today we’ll get a good indication of how that’s going.
Policy of Truth
It’s too late to change events. It’s time to face the consequences. For delivering the proof. The Policy of Truth. Yesterday, Citi Bank was the first US Bank to announce layoffs as they cut deeply into their investment and trading desks.
You’ll recall that not too long ago we saw a similar move from Deutsche Bank. According to analysts, this is just the beginning and many more banks are about to make deep cuts to these divisions as they are simply less profitable these days.
In an investment landscape that is plagued by low yields across the board, it’s becoming harder and harder for financial institutions to make money.
The term ‘canary in the coal mine’ is often used in financial circles to mean an indicator for problems ahead. It goes back to the days when coal miners used to bring an actual canary with them to work so that if poisonous gasses would leak, the canary would die and thereby warn them of the danger.
I do hope that this does not apply to our current situation but what we do know is that Everything Counts in large amounts.
Enjoy the Silence
Volumes continue to decline in the crypto market as the cooldown seems to be coming to completion. In our weekly interview with CoinTelegraph, I made the case for bitcoin breaching below the $9,000 level. My hope is that it does not happen, but there is certainly a good chance that it will. Make sure to review the video right now at this link here: https://youtu.be/GhNbIngIf_g
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Mati Greenspan, Senior Market Analyst, eToro