Mati Greenspan, Senior Market Analyst at FX broker eToro, has provided his daily commentary on traditional and crypto markets for January 2, 2019.
Highlights include:
- Markets Start 2019 on Sour Note: Stocks in Asia and Europe are taking a hit on poor manufacturing data in China. Seasonal low trading volumes and the continued US government shutdown will continue to spark volatility this week.
- Investors Continue Cautious Positions: Gold continues to climb following a strong month, as global politics continue to face uncertainty and the US Dollar weakens. Meanwhile, crude oil is testing downside resistance as OPEC struggles to maintain influence over its price.
- Crypto Investors Await Bakkt Launch: Investors and crypto enthusiasts are eagerly awaiting the launch of Bakkt, a crypto holding service started by the owners of the NYSE. Its launch had already been delayed, and has been delayed once again due to the government shutdown.
Traditional Markets
The stock markets are not off to a great start this year. Some sour manufacturing data in China was released this morning and stocks in Asia and Europe are taking a hit.
Still, the new year hangover hasn’t yet completely worn off. It won’t be until Monday that markets really return to full strength. The New York session may prove exciting, though. As we saw last week, low volume trading can often turn volatile, especially as we head into the 12th day of a partial government shutdown.
President Trump’s all caps new years tweet also carried what some have interpreted as a hidden message for the financial markets.
On the Safe Side
The US President’s reassurances have done very little for investors this morning though, who do seem to be erring on the side of caution.
Gold continues to climb, both on the current uncertainty of global politics and the weaker US Dollar. We’re now testing the psychological level of $1,300 per ounce. This level probably won’t be very easy to breach, especially coming off the strong run we’ve seen over the last month.
Crude oil is also testing a boundary at the moment but on the downside. It’s becoming clear to all now that OPEC simply does not enjoy the same level of influence over the price that they used to. This new free market has a lot more competition, which is spurring on more production and more supply.
The level of $45 a barrel is being watched very closely.
Building up Crypto
Now that it seems the US is unlikely to approve any bitcoin backed ETF any time soon, the number one event on the watchlist of many cryptotraders is the launch of Bakkt.
For those of you who are not familiar, Bakkt is a new crypto service that was started by the owners of the New York Stock Exchange, which plans to offer a crypto holding service and debit card that it will make it very easy for everyday customers to store and spend bitcoin.
Over the weekend, Bakkt announced an extremely succeful funding round of $182.5 million that has come from various Wall Street institutions and should ensure a smooth launch of the new service.
However, the launch of their platform was supposed to be on December 12th but was later delayed to January 24th. Possibly due to the US government shutdown, it seems that the launch has again been delayed, this time without a confirmed launch date.
We know that it’s going to happen and that it’s very likely to be a great step forward for crypto adoption but it seems we’ll need to continue being patient while they get set up.
This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.
Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.
The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.