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BITCOIN HALVING

2020-04-18T03:14:00.000-07:00

After every 210,000 blocks, Bitcoin goes through a process called “halving.” This mechanism was integrated into the protocol by Satoshi Nakamoto himself. After a protocol goes through “halving,” it cuts the supply of new Bitcoins in half, halving the miner’s block production rewards, as well.

What is the Bitcoin Halving?
Specifically, the Bitcoin protocol cuts the bitcoin block reward in half. Every time a Bitcoin halving occurs, miners begin receiving 50% fewer BTC for verifying transactions.

Bitcoin – The 21 million upper cap
As you already know, Bitcoin has a 21 million upper cap. In other words, there will only be 21 million Bitcoins that will ever exist. So, why does Bitcoin have an upper cap in the first place? Ripple CTO David Schwartz says that there are three reasons:

Fiat currency is extremely inflationary in nature. The Federal Reserve controls the US Dollar. Any time they want to regulate the supply, they can simply inject more cash into the system. Many people see this as a highly unethical practice. This is why Nakamoto hard-coded an upper cap to make sure that nobody can randomly inflate Bitcoin’s supply as they see fit.
When Bitcoin was first designed, it wasn’t clear whether it would be adopted in the first place or not. By fixing the supply, prospective investors were incentivized to acquire Bitcoins before it runs out.
Finally, some way was needed to distribute the currency. Miners will initially use their computational power to distribute Bitcoin. After all the coins have been mined, transaction fees could take over to secure Bitcoin’s tokenomics.
Bitcoin – Understanding mining and deflation
Having a 21 million cap ensures that Bitcoin is a deflationary asset, as opposed to an inflationary one. At the very core of Bitcoin lies the concept of mining. We are pretty sure that you must have heard the term and may even be familiar with what it means in the context of Bitcoin.

For those who don’t know, mining is a process with which certain nodes, called “miners,” use specialized mining equipment to solve cryptographically hard puzzles.

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2017-01-07T00:20:00.001-08:00

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Yen off 6-week low after "helicopter money" mania shot down

2016-07-22T00:09:00.000-07:00

The yen hovered above six-week lows on Friday after comments from Bank of Japan Governor Haruhiko Kuroda dented speculation Japan may be preparing a radical "helicopter money" economic stimulus.

The yen bounced back to 105.88 yen per dollar from 107.49, its six-week low against the U.S. currency touched on Thursday.The rebound was triggered by Kuroda's comments on a BBC Radio 4 interview on Thursday playing down the idea of helicopter money, essentially a policy of injecting cash directly to the economy in some form by printing money.

With Prime Minister Shinzo Abe crafting a massive spending package worth about $190 billion to bolster the economy, some speculators had bet the BOJ could be financing the additional spending - likened by economists to dropping large amounts of cash from a helicopter.

The BBC later said its interview with Kuroda had been conducted in mid-June, helping to cool the yen's gains.Certainly his comments have not dispelled expectations of easing. I suspect a rough consensus in the market is increase in buying of ETFs and REITs as well as 0.10 percentage point cut in interest rates," said Koichi Takamatsu, head of forex at Nomura Securities.

Few market players take Kuroda's words at face value after he introduced negative interest rates in January only days after he said publicly that he was not considering such measures.

A small number of market players, however, think the BOJ may opt to ease later to keep its dwindling fire power.

"I think the BOJ is more likely to ease in November when the government's supplementary budget will be ready, rather than now. I'm not sure if the BOJ feels it needs to act now, when even the Bank of England has not eased," said Minori Uchida, chief currency analyst at the Bank of Tokyo-Mitsubishi UFJ.

FOMC minutes: Fed to 'wait and see' for even longer due to Brexit

2016-07-07T02:41:00.001-07:00

Little news in the minutes from the June FOMC meeting, which took place just eight days before the UK's EU vote. Most of the information we already got in the FOMC meeting statement and Fed chair Yellen's press conference after the end of the meeting.

The Fed was already in a wait and see' mode before the UK's EU vote due to the mixed signals from data (strong pickup in activity growth in Q2 but weak employment growth). With Brexit this is even more true and we think the Fed will 'wait and see' for even longer.

Market participants agree that the Fed is on hold for now as markets only price in a fifty-fifty chance of a Fed hike before year-end next year.

The minutes confirm the message Fed chair Janet Yellen sent at the press conference, where she said that a Brexit ' could have consequences ' for the US economic outlook and financial markets developments. The minutes state that the Fed will have to 'wait for additional data regarding labor market conditions as well as information that would allow them to assess the consequences of the U.K. vote for global financial conditions and the U.S. economic outlook '.

Now that we know the UK voted to 'leave' the EU, we have lowered our growth forecasts for the US economy from 1.9% to 1.7% this year and from 2.3% to 1.9% next year. The reason is that the US economy is not immune to a slowdown in Europe. Hence, we also expect the Fed to be on hold until June 2017 and only to hike twice next year (we expect the following hike in December 2017) . As we have argued for some time, most voting FOMC members have a dovish-to-neutral stance on monetary policy and would rather postpone the second hike than hike prematurely.

We think the risk to our Fed view is balanced so the next hike could come sooner if the impact of Brexit on the economy is smaller than we currently expect (or later if bigger).

Otherwise, the FOMC mainly discussed how to interpret the mixed data, especially the weak jobs reports. The minutes state that the FOMC ' discussed a range of interpretations of these data '. ' Many ' FOMC members think that the jobs growth in recent months have been lower than the ' underlying pace ' due to transitory factors as noise and strikes. ' Some ' noted that other labour market indicators have been stronger while also ' some ' thought that it could be ' indicative of a broader slowdown ' in the economy.

The next important data release is on Friday when the June jobs report is due. Even if we see a rebound after the weak reports in April and May, this would probably not be enough to bring back the Fed hiking theme due to Brexit. The Fed needs data from after Brexit to analyse the impact of Brexit on the economic situation in the US before moving on. Since PCE core inflation is still below 2%, inflation expectations (both survey-based and market-based) have fallen and wage inflation is still subdued, the Fed can afford to stay patient.

Brexit Outcome Stuns Markets – What Comes Next?

2016-06-27T05:10:00.001-07:00

The outcome of Thursday’s historic EU referendum, in which nearly 52% of UK voters opted to leave the European Union, stunned markets globally in its immediate aftermath on Friday morning. The vote counting began with a surprisingly sizeable lead for Leave at over 60% of voters in Sunderland, and the pro-Brexit camp never looked back as it continued to maintain a modest advantage throughout the vote tally, even after the expectedly pro-Remain London votes came in.

Prior to the voting results being known, most of Thursday and the previous several days were characterized by the financial markets’ strong conviction that Remain would prevail. Despite an extremely tight contest in pre-vote polling, this was partly due to betting odds-makers predicting an overwhelmingly high probability of a Remain victory. To say that financial markets were caught off-guard when the Leave camp began early in the vote count to show its strength would be an understatement. After the referendum’s outcome, when UK Prime Minister David Cameron announced his upcoming resignation as a result, the market impact was even more pronounced.

As it became increasingly clear during the vote count that a Brexit outcome might actually occur, markets experienced exceptionally high volatility, most notably in the currency markets. In particular, the British pound and Japanese yen underwent vast and rapid swings throughout the course of the vote count. As expected, the British pound was most heavily pressured due to the widely-projected, negative economic implications of a Brexit, with GBP/USD plunging at one point to more than a 30-year low of 1.3226 in the aftermath of the referendum outcome. Also as expected, the Japanese yen surged strongly due to its status as a safe haven currency in times of market turmoil, with USD/JPY dropping to a new multi-year low just below 99.00.

When the pound and yen were pitted against each other in the form of GBP/JPY, the results were even more dramatic. The currency pair dropped by a massive 20 big figures to a new 3½-year low just above 133.00. Finally, although the euro rose sharply against the even more heavily-pressured pound, the common currency had its own fair share of trouble after the referendum results. EUR/USD plunged to a low of 109.10 before paring much of its losses on Friday morning.

The market impact was not limited to currencies, however, as gold spiked due to its status as a safe haven asset and global equities experienced large initial drops on the news. By Friday afternoon in Europe, most of these reactions had been cut back significantly, but exceptional pressure on sterling continued to define the financial markets.

Now that the news is out and the immediate market reactions have occurred, what might be next with respect to the Brexit outcome? The process of separation between the UK and European Union is expected to be long and drawn-out, likely taking at least a couple of years with many negotiations, both political and economic, occurring in the process. On the near-term horizon, however, Brexit implications will probably be felt relatively quickly and on a global basis. The obvious question now is which EU countries might be next in holding their own referenda for leaving the European Union. If this becomes an increasing occurrence amongst current EU countries, the viability of both the European Union and the Eurozone (and in turn, the euro currency) could become even more questionable.

But even more pressing at the moment is Brexit’s potential impact on major central banks. Bank of England Governor Mark Carney made a televised appearance on Friday morning stating that the central bank “will not hesitate to take measures as required” with respect to the extreme volatility in the pound as a result of the referendum. The other major currency most affected by Brexit, as noted, has been the Japanese yen. There have been numerous warnings in the recent past and the immediate run-up to the referendum from Japanese officials touting Japan’s readiness and willingness to intervene should the yen become too strong or experience exceptional volatility. If the yen spike continues, given that the USD/JPY dropped well below 100.00 at one point on Friday, this could very well fulfill the prerequisites for an impending currency intervention by Japan in attempts to stem the yen’s rise.

Finally, the Brexit outcome is very likely also to have a substantial impact on the US Federal Reserve. Since the results of the referendum have been announced, the implied probability of a Fed rate hike any time this year has plunged dramatically, with some market participants now even speculating on a possible rate cut. If this actually comes to pass, the Fed will have finally relented by joining other major central banks on the prevailing global trend of monetary easing.

As the Brexit outcome continues to be digested and through the next few weeks, the markets should continue to exhibit lingering volatility as the trends going forward are being determined. For both the pound and euro, this could mean persistent pressure for the time being, particularly for the euro if other EU countries begin to take the UK’s lead. Safe haven assets like gold, the yen and the Swiss franc, should also remain supported as markets fluctuate and find direction. The noted prospect of Japanese (and possibly Swiss) intervention, however, could potentially help to limit the yen’s gains if it occurs. As for the US dollar, if Brexit affects the Fed’s prior monetary stance as much as might be expected, the greenback could also come under significant pressure going forward.

There is an incredible theory that a Brexit won't actually happen even if the public votes for it

2016-06-15T03:04:00.000-07:00

A really crucial detail about the upcoming EU referendum has gone virtually unmentioned and it is probably the most crucial detail: Parliament doesn't actually have to bring Britain out of the EU if the public votes for it.

That is because the result of June 23 referendum on Britain's EU membership is not legally binding. Instead, it is merely advisory, and, in theory, could be totally ignored by UK government.

Instead, what will happen next if the public votes for a Brexit will be purely a matter of parliamentary politics.

The government could decide to put the matter to parliament and then hope to win the vote, Green says. Alternatively, ministers could attempt to negotiate an updated EU membership deal and put it to another referendum. Finally, the government could just choose to totally ignore the will of the public.

Pro-EU MPs could even argue that ignoring the public's will would be parliamentary sovereignty in practice - something that Leave campaigners argue has been conceded to Brussels.

The only way that a Brexit vote would have weight in law would be if the government decided to invoke Article 50 of the Lisbon Treaty. This is when an EU member state chooses to activate the process of withdrawing from the 28-nation bloc.

Article 50 would make Britain's EU membership a legal matter. However, even if the June 23 referendum produces a Leave majority, the government would not be obliged to invoke the legislation.

A vote for Brexit will not be determinative of whether the UK will leave the EU. That potential outcome comes down to the political decisions which then follow before the Article 50 notification. The policy of the government (if not of all of its ministers) is to remain in the EU. The UK government may thereby seek to put off the Article 50 notification, regardless of political pressure and conventional wisdom.

This has to go down as one of the largest pieces of small print in British political history.

The overwhelming majority of the British public is probably totally unaware of this legislative loophole. As far as most Brits understand, Britain will no longer be an EU member if Leave wins next week's referendum.

Interestingly, parliament choosing to ignore the British public isn't as unthinkable as conventional wisdom leads us to believe. In fact, according to the BBC, MPs have already discussed the possibility.

Speaking to the BBC earlier this month, an unnamed pro-EU MP said: "We would accept the mandate of the people to leave the EU. But everything after that is negotiable and parliament would have its say. The terms on which we leave are entirely within my remit as a parliamentarian and that is something for me to take a view on."

SNB Braces for Brexit Tsunami as Officials Prepare Franc Defense

2016-06-14T08:36:00.001-07:00

If Thomas Jordan finds himself in the midst of a foreign-exchange tsunami this month, it won’t be of his own making.

Brexit Watch: The pound, the polls, and the probability of Brexit, all in one place

In January 2015, the Swiss National Bank shook markets when it gave up its cap on the franc. Now central bankers the world over are casting a nervous eye toward London amid fear the U.K.’s departure from the European Union could upset investors, disrupting economic growth and forcing officials to maintain their extraordinarily loose policy even longer. SNB President Jordan warned back in April that a so-called Brexit would cause “enormous stress” in Europe.

A British vote to leave the EU on June 23 would practically guarantee a surge in the franc, popular among investors at times of market stress, according to a Bloomberg survey of 23 economists. The SNB will counter that appreciation with more aggressive interventions, the majority of those polled said. Some even expect a cut to the deposit rate, already at a record low of minus 0.75 percent.

“Obviously Brexit would be a game-changer,” said Alan McQuaid, chief economist at Merrion Capital Group Ltd. in Dublin. “If the franc appreciated back to the 1.00-1.05 range and held there for a prolonged period, then the SNB would have to consider its options, with cutting the deposit rate further the most likely initial response.”

Having dropped its 1.20-per-euro ceiling on the franc -- described by Swatch Group AG Chief Executive Officer Nick Hayek as a “tsunami” at the time --, the SNB spent the past year using negative interest rates and occasional interventions to take pressure off the currency, and succeeded in weakening it roughly 3 percent in the past 12 months.

Yet with the franc back on an appreciation course and the cost of hedging its gains on the rise, the Brexit vote is threatening to erodemonths of the SNB’s hard work. Last week, the Swiss currency appreciated past 1.09 per euro for the first time since mid-April. It traded at 1.08862 at 2:23 p.m. on Zurich on Monday.

One Week

The SNB’s next quarterly interest-rate decision is scheduled for Thursday. Given that’s a week before the U.K. plebiscite, it’s unlikely to make any adjustments to policy. In addition to keeping the deposit rate unchanged, economists see it holding its target for three-month franc Libor at between minus 0.25 percent and minus 1.25 percent, according to data compiled by Bloomberg.

The central bank’s announcement on June 16 will come with an updated growth and inflation forecast and Jordan and fellow rate setters Fritz Zurbruegg and Andrea Maechler will brief the press in Bern. That’s a few hours before the rate decision of the Bank of England, whose Governor Mark Carney has warned a vote to leave on June 23 could usher in a recession.

In the U.K., polls have been too close to call.

Another cut to the SNB’s deposit rate is “possible,” Zurbruegg, the SNB’s vice president, told Basler Zeitung in an interview published on June 4. Yet a few days later, his predecessor Jean-Pierre Danthine, who has retired from policy making, said that the effective lower bound was “very close to minus 75 basis points” and that to go much lower, “radical measures” that are “simply not democratically enforceable today” would be needed.

According to the 22 economists who answered the question, the SNB can go as low as minus 1.25 percent before investors begin to hoard cash in a bid to circumvent the charge. Concerning interventions, which the SNB uncharacteristically admittedto having done at the height of the Greek debt crisis a year ago, the central bank can grow its balance sheet to 140 percent of annual output, from just over 100 percent currently, the survey found.

SNB will be able to intervene a lot more before its credibility gets called into question,At the moment, the SNB’s policy is broadly supported -- even with a constantly growing balance sheet.

Market was caught off guard by hawkish FOMC minutes

2016-05-19T04:42:00.000-07:00

Market was caught off guard by hawkish minutes from the 27 April FOMC meeting and is all of a sudden reassessing its views on US monetary policy.

Following the release of the minutes, as the committee expressed support for a possible (data dependent) hike in June, the market implied-odds of a June hike jumped from roughly 15% to 35%; the odds stood at just 7.4% two-days ago before a number of hawkish Fed speakers.

This doesn't change the call for a September hike, but steers the market away—at least for now—from overly dovish US rate expectations that have largely dominated over other themes this year. This also means that the great support that EM assets have received since after the January selloff—which may not be entirely due to, but definitely is rooted in such implied odds—may start to falter, in the same way as oil prices are immediately feeling the heat of a stronger dollar.

European currency markets are trailing behind with the high yielders (TRY, ZAR and RUB) skewed towards weakness vs the CEE currencies flat or slightly positive. It’s still too early to say which direction may prevail, but we suspect that correlations with equities will continue to hold, and stock markets are currently in the red. So if the equity slump advances, there will be little in the way of further EM FX corrections. This is in line with our medium term view, but doesn’t reconcile with our more optimistic short-term one that is based on the assumption that the market would remain dovish on implied US rate expectations until the end of Q2.

If wrong on this assumption, however,the majority of EM FX are recovering rapidly bridging the gap between short term and medium term forecasts; in other words, we could see Q3/Q4 forecasts materializing a lot faster than we thought.

Australia's Central Bank Cuts Key Rate to 1.75% to Combat Disinflation

2016-05-02T22:37:00.001-07:00

Australia’s central bank cut interest rates to a fresh record low as it moves to counter the emergence of disinflation that’s swept the developed world and limit currency gains that could complicate an economic transition.

Reserve Bank of Australia Governor Glenn Stevens and his board lowered the cash rate by 25 basis points to 1.75 percent Tuesday, as predicted by 12 of 27 economists surveyed. Data last week showed quarterly deflation in the consumer price index and the weakest annual gain on record for core inflation -- which the RBA aims to keep between 2 percent and 3 percent on average.

“Inflation has been quite low for some time and recent data were unexpectedly low,” Stevens said in his statement. “These results, together with ongoing very subdued growth in labor costs and very low cost pressures elsewhere in the world, point to a lower outlook for inflation than previously forecast.”

The currency has risen as much as 15 percent since mid-January and is likely to further restrain import prices in Australia. The resurgent Aussie also casts doubt on the sustainability of both the Australian labor market’s improvement and the burgeoning tourism and education industries that led a 1 percentage point of gross domestic product turnaround in services exports.

Aussie Plunges

The Australian dollar fell after the decision, trading at 75.66 U.S. cents as of 3 p.m. in Sydney, from as high as 77.19 cents earlier in the day.

The RBA has also been monitoring the impact of tighter regulations on home loans as residential prices in Sydney and Melbourne surged on easy policy.

“In reaching today’s decision, the board took careful note of developments in the housing market, where indications are that the effects of supervisory measures are strengthening lending standards and that price pressures have tended to abate,” Stevens said. “At present, the potential risks of lower interest rates in this area are less than they were a year ago.”

Global policy is diverging and creating cross-currents as Europe and Japan move to negative rates and the U.S. tightens policy. That, together with a resurgent price for Australia’s biggest export, iron ore, has helped lift the Aussie dollar.

Iron Ore Rebound

The RBA reiterated that “an appreciating exchange rate could complicate” the economy’s transition. It also noted the rebound in the iron ore price in response to policy easing in China, Australia’s biggest trading partner.

“Commodity prices have firmed noticeably from recent lows, but this follows very substantial declines over the past couple of years,” Stevens said. “Australia’s terms of trade remain much lower than they had been in recent years.”

He also noted that China’s growth rate “moderated further” in the first part of the year.

Stevens was upbeat on Australia’s growth after the economy expanded 3 percent last year. “Indications are that growth is continuing in 2016, though probably at a more moderate pace,” he said. “Labor market indicators have been more mixed of late.”

Fed’s slipped up by delaying rate hikes. Here’s why

2016-04-28T22:23:00.000-07:00

The U.S. Federal Reserve has made a "policy mistake" by holding back further rate hikes in 2016 as the U.S. economy is growing strongly and a hawkish monetary policy is therefore needed, according to a report by London-based ETF Securities.
The Fed passed on raising its interest rate target at its March meeting this year citing global economic and financial situation as a risk. Policymakers had previously signaled in December that four rate rises were likely in 2016.
However, the report from ETF securities suggests the lack of hike in March was an error in judgment from the US policymakers. It seems like the Fed's board of governors has become more dovish since the December meeting and the market is now pricing in only one rate hike by the end of the year.
ETF Securities, however, believes the Fed has slipped up.
"Real GDP (gross domestic product) trends indicate that the pace of U.S. economic growth is solid. While the growth path of real GDP is not as strong as pre-crisis levels, there is no evidence of a slowdown. Such a growth path warrants tighter monetary policy," ETF securities said in a statement.

ETF Securities' stance is, however, contrary to what a number of economists believe. Official data shows the U.S. economic growth slowed to 1.4 per cent in the fourth quarter of 2015, down from 2 per cent in the third quarter of 2015. A number of banks have already revised their outlook for the year due to factors such as global economic uncertainties.
Citigroup, for example, recently downgraded its outlook for the U.S. for 2016-2017, saying the risks were very evident. The revised figures show that the GDP will grow by 0.9 percent in the first quarter and 1.7 percent for the year. "Despite such tepid growth prospects, we project a slow decline in the unemployment rate to 4.7 percent by end-2016, and 4.5 percent by end-2017," William Lee, head of North America economics at Citigroup said in his research outlook. He predicted inflation to remain subdued.
However, James Butterfill, head of research and investment strategy at ETF Securities says while the Fed is currently stuck in a liquidity trap, the U.S. economy is strong to sustain another rate hike.
"Looking at the key factors that have historically defined rates hikes, namely the non-accelerating inflation rate of unemployment (NAIRU), wage growth and nonfarm payrolls, all suggest a rate hike should occur. Delaying hikes will likely have a much more negative impact on asset classes and the global economy," Butterfill told CNBC
He further explains that current real GDP has recovered and the quarterly dip in the figures is very common during rate hike periods.
"Investors and industry leaders become very concerned with the impact that the first rate hike will have on the economy – a short term negative fund. This in turn leads to lower corporate confidence and consumer confidence, leading to a temporary dip in GDP growth, this is history repeating itself."

The report also says that currency volatility remains elevated as investors continue to worry over the potential for rate hikes derailing the U.S. economic recovery. However, the ETF Securities report says there is no danger of modest rate hikes impacting economic growth with the threat actually coming from uncertain policy guidance from the Fed.
"Such a situation seems circular, with markets fretting over Fed decisions and the Fed concerning themselves with market volatility – an issue outside the scope of its mandate," the report says, predicting that the U.S. recovery will continue in 2016.
The minutes of the March meeting highlighted the consensus within the Fed around a cautious outlook for the economy.
"If the Fed's global concerns diminish in the near term, their worries about the U.S. economy should also lessen," David Kelly, chief global strategist at JP Morgan Asset Management told CNBC via email. "The U.S. economy, like the global economy, faces challenges ranging from a very volatile and unpredictable race for president to uncertainty about the strength of any potential bounce-back in corporate earnings. Moreover, equity valuations look close to fair value rather than cheap in absolute terms. "

This is what could create some turbulence Friday

2016-04-08T07:33:00.002-07:00

Fed officials from different camps speak ahead of Friday's Wall Street open, and they could make some waves in already seasick markets.

Market nerves are starting to get a little frayed right now. You can see it in the risk markets there's potential (for market impact). What's been interesting to me is you've had a parade of Fed officials some of whom are extremely dovish, and they've been a whole lot less pessimistic and a lot less dovish than (Fed Chair) Janet Yellen, since the last meeting."

Speaking on Friday is New York Fed President William Dudley, who is seen as closely aligned with Yellen — in the dove camp. He speaks at 8:30 a.m. EDT on the regional and national economy in Connecticut. Philadelphia Fed President Patrick Harker gives remarks at an investment conference in Camden, New Jersey, at 9 a.m. EDT, and he has recently called for the central bank to get on with rate hikes. Dallas Fed President Rob Kaplan speaks later on the political economy of Texas and Mexico at 9:30 a.m. EDT.

Unfortunately they seem in muddled message mode right now,. Markets will also digest the comments of more hawkish Kansas City Fed President Esther George, who was to speak Thursday evening. George is the one member who dissented at the last central bank meeting, when it voted to keep rates unchanged.

There will also be comments to consider from Yellen herself, plus her last three predecessors, at an unprecedented panel discussion Thursday evening.

Yellen said Thursday that the U.S. economy is strong and said it is not a bubble economy. She reiterated that the Fed is taking a cautious approach on raising rates and said the Fed's rate hike in December was not a mistake.

Her comments Thursday evening were viewed as more optimistic than in her appearance last week, and they helped support risk markets, including oil. Now the question is which way will the next speakers lean

Brexit: GBP COULD FALL A FURTHER 15-20% vs USD

2016-04-05T03:02:00.000-07:00

A Brexit vote could lead investors to worry about the UK’s ‘twin deficits’. To date, these have largely been ignored by the FX market. Brexit could raise concerns and Mark Carney, the BoE Governor, recently warned that Brexit could leave the UK reliant on “the kindness of strangers” in an environment of global economic volatility.

Already a gap has opened up between the observed level of sterling and the level implied by interest rate differentials. If the currency market is pricing in around a 33% probability of a Brexit vote, GBP-USD could fall by around another 15-20% should a Brexit vote occur (i.e. if the probability shifted from 33% to 100%). This would see GBP-USD falling to levels not witnessed since the early 1980s. We also think that the GBP would come under pressure against the EUR. Indeed, EUR-GBP could move towards parity in the aftermath of a Brexit vote.”

WELCOME BACK

2016-04-04T20:55:00.001-07:00

Hello dear,It is my sincere pleasure to welcome you back to our darling blog website,doing what we always enjoy .My sincere apologies for the long absence, I know readers and well wishers would have missed my post a great deal.As Business Entrepreneur,I have been busy working on some vital projects,but notwithstanding my love,determination and doggedness trading the capital market,sharing and networking,remains unwavered and I am absolutely committed to contributing my own quota in trading experience geared towards making consistent profits and at the same time reducing flaws to the barest minimum.

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CALENDER OF KEY EVENTS FOR JANUARY,IN THE EURO ZONE

2012-01-04T23:28:00.000-08:00

As the euro approaches its 10th anniversary – fighting for survival – France will start the year with its first debt auction.

5: France will kick off a mad dash to financial markets by eurozone governments: Italy alone needs to raise €450bn (£375bn) in the next twelve months. France's first debt auction of the year comes as Paris anxiously awaits a long-expected credit downgrade.

• 6: The US releases its key monthly unemployment report for December, the non-farm payroll. A strong reading would underpin confidence; a weak one could create panic.

• 8: The deadline set by the new Spanish government has for deciding a package of labour market reforms as the latest part of Madrid's attempt to show investors it is serious about kick-starting its economy.

• 9: Germany will try to borrow €4bn from the financial markets in short-term loans. It will be watched closely as a measure of investors' confidence in the Euro after a failed auction in November.

• 11: Germany will be back to the markets, trying to sell €4bn-worth of 5 year Bunds, or government bonds, on the same day that the government reveals official GDP figures. A decline could point to the onset of eurozone-wide recession.

• 12: Italy auctions short-term bonds. Technocratic prime minister Mario Monti will hope to repeat last month's stunt of appearing before a chart of declining Italian bond yields.

Senior officials from europe will start a two-day meeting in Copenhagen; the Americans will no doubt repeat Washington's demand that eurozone leaders resolve the crisis.

Official figures will show what happened to industrial production in November in the UK and the eurozone.

The Bank of England will decide whether to increase its quantitative easing programme.

• 13: Italy will be back in the markets, to borrow money over 5 years.

• 16: Inspectors from the European Commission, the IMF and the ECB(Troika) will return to Greece to assess its progress towards resolving its debt crisis. Rumours are emerging to suggest they could recommend an even bigger debt writeoff.

• 17: Spain will be raising short-term debt, over a period of 12 and 18 months, while in Germany the key monthly survey from thinktank the ZEW will test the country's economic strength at the turn of the year.

• 18: Germany will be back in the markets to auction €4bn-worth in 2 year notes.

• 19: Two-day meeting of deputy finance ministers from G20 countries in Mexico City, giving eurozone governments another chance to urge developing countries such as China – and non-members such as the UK – to contribute extra resources to the IMF that could be used in the event of a euro meltdown.

Meanwhile back in Madrid, Spain will be auctioning (more) bonds.

• 20: Germany's turn – it will auction €3bn in 1 year bills, known as Bub ills.

Relief for Athens - or perhaps not - as the Troika inspectors depart.

Retail figures for the UK will give the official picture of Christmas shopping trends.

• 23: Finance ministers from euro zone member-countries will meet to hammer out the next steps in the battle to stabilize the currency; while Monti is scheduled to outline yet more austerity measures.

• 24: Spain auctions 3 and 6 month bills Eurozone ministers will be joined by their counterparts from non-members of the single currency – including George Osborne – to discuss the crisis.

•25: Germany will auction €3bn in 30 year bonds, while the ECB will offer the next batch of emergency loans to banks in its so-called long-term refinancing operation.

Official GDP figures from the UK will be released, revealing whether the economy contracted at the end of 2011.

• 26 and 27: Italy auctions (yet) more bonds as US GDP figures for the end of 2011 are released.

• 30: Italy is at it again, this time selling 3 and 10 year bonds, against the background of a major summit for European leaders, at which they hope to make progress towards shoring up their bailout fund and tightening tax and spending rules.

• 31: The troika is due to deliver its report on Greece and talks with the country's private creditors, under which Athens hopes they will volunteer to accept a hefty write down on the value of their bonds, are due to end.

To Your success

Fxtycoon....

Stevens Adeola,S.

EURO ZONE ! A WEEK OF RECKONING

2011-12-05T06:24:00.000-08:00

By week’s end, the EU heads of government and the ECB will have concluded a summit and announced a rate decision. Other central bank meetings by the BoC and RBNZ are expected to see policy left unchanged, while the market has priced in the RBA taking another step towards policy neutralization with a second consecutive-25bp ease. Currently, the growth and interest rate sensitive currencies seem well supported heading into the meetings, but, the risks are skewed towards disappointment.

The market believes Draghi and company will cut the rate by a further-25bp, with a “stronger” possibility of a larger move. They could be more proactive, some analysts expect them to announce a long-term repo operations of greater than one year, along with loosening of collateral requirements. However, it seems unanimous on the street that the ECB will “not” be offering definitive guidance on plans for sovereign bond purchases.

This is a big week for Merkel, Sarkozy and Draghi’s leadership. They now have limited opportunities to find a stabilizing solution. The market know that if Euro loses, the rest of the world loses. This week, from a policy stand point cannot be deemed a gamble, they have to deliver a concrete framework that the market at least perceives to be some sort of solution, otherwise there is the abyss! .

To your success.....

DEFXTYCOON

WHAT HAPPENS WHEN A CURRENCY COLLAPSES?

2011-11-29T06:31:00.001-08:00

Fifteen years ago, both Bulgaria and Romania went through rampant inflation linked to a financial crisis. Bucharest narrowly avoided the collapse, but Sofia was less fortunate and experienced a meltdown of the sort Greece is currently trying to prevent.

"Those were very bad times. Every day my salary was worth less and less, and there were fewer things I could buy with it," says Krassimira Komneva from the Sofia-based Most Foundation, an employment and education outfit.

Back in 1996, Komneva was doing office work in a construction company. She recalls how the salary was late when the currency collapsed. "When I received it one month later, it was worth much less than expected. We all hurried to buy food, bread, oil. The prices were just crazy," she recalls.

According to the International Institute of Finance, inflation in Bulgaria hit 174.4 percent in 1996 and a record of 1,077.5 percent the next year. Its curency, the lev, went from 500 per US dollar in late 1996 to 2,200 per US dollar in February 1997.

Food shortages and a harsh winter drove people to despair, with mass rallies ultimately forcing out the post-Communist government largely blamed for the disastrous policies that led to the currency collapse.

"For the average people, it was just terrible. Nobody really understood what happened, the only thing we could see was that it all ended in disaster," says Komneva.

The central bank was subsequently stripped of its powers as the country entered in a "currency board" agreement with the International Monetary Fund (IMF) and other international lenders in July 1997, with the lev being pegged to the German D-Mark. Aimed at lowering inflation, boosting national reserves and restoring market confidence in the country, the currency board nevertheless seriously dented Bulgaria's sovereignty.

Romania only narrowly avoided a similar fate in the same period.

According to former President Emil Constantinescu, elected to power in November 1996 as the first non-Communist leader of the country, the country's national reserves when he took over had just 600 million US dollars, compared to current levels of €20 billion. At the same time, Romania had taken up some 5 billion US dollars in loans, which had to be paid back during his mandate.

"All of this led the IMF to suggest Romania should declare default on its debt. The second day after Parliament had confirmed my mandate, I received international envoys who told me this and gave it to me in writing," Constantinescu said in a 2006 interview with Gardianul newspaper.

Like Bulgaria, Romania was struggling with failing banks - both state and private-owned. Taxpayers' money was poured into the ailing state giants to help save them after they had lent billions to former regime protegees and their respective companies.

Meanwhile, most so-called private banks were in fact pyramidal schemes "designed to steal the money from regular citizens, set up by the mafia of the former Securitate (Communist secret police)" Constantinescu recalled.

Inflation peaked at 150 percent in 1997 and Romania had to seek an IMF loan of 500 million US dollars. It also had to privatise and profoundly restructure its state enterprises. But it avoided the embarrassment of having its central bank replaced with a currency board.

Not everyone was miserable during those years in Romania. To 41-year old trader Paul Marian, those were lucrative times in Bucharest. He remembers people flocking to his exchange office to get rid of the quickly depreciating lei and turn them into more stable D-Marks, US dollars or Swiss francs.

"I made good money in those years, the exchange office was working well. Everybody was just crazy about buying foreign currency," Marian recalls.

A cap on 500 US dollars was put in place for each citizen and later on, "when things got crazy", traders were banned from selling or buying foreign currency at more than five percent above or below the central bank exchange rate, he says.

That put an end to the big profits earned by exchange offices which had mushroomed in every Romanian town.

To your success...

DETYCOON

STEVENS ADEOLA S.

BENEFICIARIES OF BILL GATES LOANS TO FOREX TRADERS IN PIX

2011-02-27T11:57:00.000-08:00

HELLO FOREX PALS,IF YOU HAVE BEEN FOLLOWING MY POST ON THIS
WEBSITE,CONSISTENTLY,I HAVE MENTIONED WITHOUT MINCING WORDS,
THE IMMENSE OPPORTUNITIES TO FOREX TRADERS IN NIGERIA THROUGH,
THE BENEVOLENT GESTURE OF BILL AND MELINDA GATES FOUNDATION.

YES ! AN ACCESS TO MOUNTH WATERING LOANS TO TRADE FOREX ....WHAT OFFER COULD BE BETTER?

ALAS WITH ME ARE THE PIX ,AS LIVING TESTIMONIES TO PROVE, ALSO TO WET YOUR APPETITE AND BELIEVE THAT ANYTHING IS POSSIBLE........

To your trading success

D cybertycoon

Stevens Adeola S.

BILL GATES OFFERS $100 MILLION WORTH OF LOANS TO NIGERIA FOREX TRADERS

2010-12-08T10:54:00.000-08:00

BILL AND MELINDA GATES FOUNDATION

Guided by the belief that every life has equal value, the Bill and Melinda Gates foundation works to help all people lead healthy,productive lives.In developing countries,it focuses on improving peoples health and giving them the chance to lift themselves out of hunger and extreme poverty.In Nigeria,it seeks to ensure that all people -especially those with the fewest resources-have access to the opportunities they need to succeed in school and life,Based in Seattle,Washington,the foundation is led by ceo Jeff Raikes and co chair William H.Gates Sr,under the direction of Bill and Mellinda Gates and Warren Buffet

When bill gate stormed Nigeria to share cash some months back,most people it was all about the eradication of polio and reduction of infant mortality rate alone.Bill Gates was in Lagos Kano and other part of Nigeria was amazed at the high rate of poverty among the working class and high level of unemployment among the youths, and even more alarming was the number of teenage persons going into "Yahoo Yahoo" - internet fraud, as a source of sustenance,thus the wealthy american is donating money to charity and social services in the way to put back into the society.

Bill Gates is dolling out an awesome cash of $100million to empower Nigerians who are interested in trading the FOREX MARKET.The several times world number one richest man has been in this game of giving cash to empower the economically disadvantage nations,but 2010 he decided to invade Nigeria with this free money,Its for those who are not employed and those who are employed but not earning enough

WHY IS MICROSOFT GIVING ALL THESE OPPORTUNITES?

Microsoft is giving out the training and funding opportunities because they have looked at the country and the crime rate in it.For instance instead of doing internet fraud -"Yahoo Yahoo" ,the youths can now do genuine online businesss that even warren buffet does

WHY YOU NEED TO PARTICIPATE?

It's a great opportunity for everyone,including housewives,bankers,fresh graduates,Its open to over 300,000 or more people.The money being doled out is over $100 million from Bill and Mellinda Gates foundation in collaboration with the Lagos state government on its poverty alleviation program.Microsoft has its representative right here in Lagos,your performance through your demo account trading in collaboration with the Lagos state form you would have filled before you start will be submitted to the microsoft office.Your performance can even make them give you an amount that surpasses your expectation.If your performance is poor you may get little ,but when its good,they can give you between one to five or even ten thousand Dollars to trade

So what are you waiting for ?If you are interested ,you can visit the facilitators at ...........

HEAD OFFICE

CLARRENTON CONCEPT LTD
32,TOYIN STREET, IKEJA...OPPOSITE
ST.LEOS CATHOLIC CHURCH.LAGOS STATE

MOBILE NOS...... 07031338186, 01-4350757

ANNEX OFFICE

STARDOM FOREX ACADEMY,
SUITE 3 2ND FLOOR,16 THOMAS SALAKO STREET
OGBA/IKEJA .LAGOS

MOBILE NOS...... 2348032249443,2348056578472

...........................................................................................................................................
Condition notice/CCN/B & MGF

9 . FAILURE TO TAKE PROFITS FROM YOUR ACCOUNT

2010-07-15T06:39:00.000-07:00

WELCOME BACK

It is almost a natural law that over a given period of time,the Forex markets will allow you to make only so much money and then you are going to have to start giving some back. Yet, probably no more than 1% of all Forex traders I know have a rule to take profits out of their account.(However, they are quick to deposit money into their accounts when funds drop to untradable levels).

You cannot believe how often I see traders leaving profits in their accounts and then go for the “big trade” – the one that will give them a real “killing,” which usually kills their profits.This problem can be overcome by predetermining an equity level at which you will remove profits from your account.When you make profits in the Forex markets, take some money out and put it somewhere else. Your trading will move in cycles. You will make some, lose some, make some,and lose some. By taking money out of your account whenyou are profitable, you will not make the mistake of losing larger amounts of money when a down cycle occurs.

To your online trading success
D FXTYCOON

8 . OVERTRADING YOUR ACCOUNT

2010-07-08T19:04:00.001-07:00

Assuming risk that is too large a percentage of your account balance on any single trade, either with too large a dollar
risk per contract or by trading too many contracts for any single trade or by trading too many currency pairs.This can also happen after a period of choppy market consolidation

when you “know” that the market is going to do something. You are so certain that this is going to be a big
move that you risk much more than the maximum 8% of your account balance. Already emotionally out of balance,
all it takes is a couple of limit moves against you and you
are bust.

To prevent this mistake from occurring, you must have a hard and fast rule that you can risk no more than a certain
percentage of your account balance on any trade regardless of how good the trade looks. My personal hard and fast
rule is to only have one position on at a time period. This does not count if I am hedged because with most brokers
hedging does not take up margin. This limits any possible overtrading. Overtrading is the quickest way to lose the
capital in your account.

OVERTRADING YOUR ACCOUNT

2010-07-08T19:04:00.000-07:00

7 . INCREASING YOUR RISK FOR SUCCESS

2010-07-07T02:39:00.000-07:00

One of the most common mistakes I see Forex traders make is increasing risk exposure because of a perceived winning or losing streak. Just by being successful on a few trades,more dollars will be risked per trade because more money is in the trading account. Because you have more money (and confidence) when successful, you are also likely totake larger percentage risks. Not surprisingly, this ruins more Forex traders than a series of small losses.

Not allowing the risk percentage to unreasonably increase as profits are realized and discipline in maintaining protective stop losses can overcome this mistake. What I mean by ‘unreasonably increase’ is this – on a typical trade, your risk should be in the range of 3% to10% of your account size depending on trade confidence. As you see yourself on a winning streak, you are tempted to increase risk percentages.Never increase your risk percentage to more than
10% of your account balance on any single trade.

I have also seen traders risk more after a losing streak and risk less after a winning streak. Their thinking is that after a string of winners, a loser has to come at any moment so it is time to reduce risk. The other side of this is increasing the size of their risk after a string of losses thinking that a winning trade is imminent. Do not fall into this ‘thinking’trap! Those percentages of 3% to10% for me because of my high level of confidence in trading my proven system. If you are new to trading, your risk should be between 1% and 3% for a typical trade and 8%
maximum loss on any one trade.

AVERAGING A LOSS

2010-07-05T03:00:00.000-07:00

This mistake is usually a holdover from trading equities or futures. In Forex trading, with 100 to 1 or greater margin,averaging a loss can be disastrous to say the least. A typical approach is that once you have entered a long position in the market and it drops lower, you might figure that since it was a good buy then, it is a better buy now. You may justify averaging down by figuring you will have a lower average entry price and require a smaller move to break even.

Unfortunately, you will lose twice as much if the market continues against you, as it almost always does. There are approaches that allow you to buy a market at one price level, add to the position at a lower level and add on again at even a lower level, as long as this was your predetermined game plan before you entered the trade initially.

Personally, I never trade this way but it is some manager’s strategy. You must also have an unmovable protective stop loss order that takes you out of the entire position.This mistake is easily overcome by having a strict rule to never average a loss unless your predetermined plan calls for averaging the trade in the case the market moves against you. This can be done with a pending unmovable protective stop loss order to exit the entire position if it is hit.

5..OVERSTAYING YOUR POSITION

2010-07-02T02:06:00.000-07:00

One of the most common mistakes of trading currencies is overstaying a position, or simply failing to take profits at a predetermined level. There seems to be a natural law that the market is only going to allow one individual so much money before it starts to take it back. Yet, it is when you have these profits, especially real profits in your account that you often try to get the last nickel out of a trade. If the market meets your profit objective and you are in the trade without an exit order, then you are overstaying your position... period!

All too often the market breaks sharply through your “mental stop” and you watch as your profits disappear before your eyes. Then, you decide to hold the trade hoping for a small rally and the market never rallies enough. The trade profits fall back to break-even, and now you really begin to hope. Next thing you know, you are sitting on a loss. Be aware that a large profit can turn into an even larger loss.

The only exception to this would be if price action were moving strongly in your direction. In this case, you can move your protective stop to your profit target or use a
trailing stop.

4.TAKING SMALL PROFITS AND LET TING YOUR LOSSES RUN....

2010-06-30T02:01:00.000-07:00

Welcome back to our series...........

A very common mistake among Forex traders is taking small profits and letting losses run. This is often the result of not having a trade plan. After one or two losing trades,you are likely to take a small profit on the next trade even though that trade could have turned into a large winner
that would have offset your previous losses. Letting losses run often happens to new traders and is not an uncommon problem among even professional Forex traders.

After entering a trade, you do not know where to get out. Once you start losing money on a particular trade, the tendency is to let the loss get larger and larger as you hope that the market will retrace to let you break even – which of course, it seldom does.

This mistake is overcome by using pre-determined protective stop loss orders or hedging to prevent your losses from running, and following your trade plan to take profits at
your profit targets.