Macroeconomics and financial markets
In the US NY stock market on the 3rd, the Dow Jones Industrial Average fell 270 dollars (0.8%) from the previous day, and the Nasdaq Index closed at 55 points (0.46%) lower.
The US Federal Open Market Committee (FOMC) has decided to raise interest rates by 0.25 percentage points, as many expected. The target range for the Federal Funds (FF) interest rate has been further raised to 5.00-5.25%, the highest level since 2007.
“Inflation is still high and will not come down too quickly,” he said, ruling out the possibility of an early rate cut.
On the other hand, in the midst of a series of bank failures and the rise of financial instability, the Bank hinted at the possibility of suspending interest rate hikes, and deleted the phrase “expecting additional interest rate hikes” in previous statements.
FRB Chairman Jerome Powell has indicated that the US financial system is sound and robust, and has indicated his intention to strengthen regulations, but the market is skeptical.
On the 3rd, stocks of US regional bank PacWest, which had raised concerns about bankruptcy, plunged nearly 40% from the previous day in after-hours trading. This comes after Bloomberg reported that it would consider strategic options, including a sell-off.
On the 2nd, the bankruptcy of First Republic Bank, which was found to have a large deposit outflow, and the acquisition by JP Morgan were just announced. Concerns about small and medium-sized banks that are facing financial difficulties are growing as the number of customers withdrawing money increases due to the spread of credit uncertainty.
connection:US stocks: Is it a temporary sense of security with the acquisition of First Republic? Pay attention to Apple’s financial results and FOMC interest rate announcement this week |
connection:Stock investment recommended for cryptocurrency investors, representative cryptocurrency stocks of Japan and the United States “10 selections”
Virtual currency market
In the crypto asset (virtual currency) market, Bitcoin rose 1.8% from the previous day to $29,051.
Ethereum (ETH), the second largest market capitalization, also rebounded by 2.03% from the previous day.
New York gold futures prices soared to $2,079 per troy ounce at one point, surpassing the all-time high set in August 2020.
The announcement of the results of the FOMC strengthened speculation that interest rate hikes would be halted, and US long-term interest rates declined. Crude oil futures were sold and gold was bought. This is partly due to US Treasury Secretary Janet Yellen’s warning about the risk of a default on the US debt ceiling, and the rapidly growing financial uncertainty in the US and Europe.
The Global Investment Research Division of Goldman Sachs also expressed a pessimistic outlook, saying that “the default of the United States may come as early as June.” It has a history of leading to risk-off in financial markets and rising gold prices.
In addition, in response to the US economic sanctions (asset freeze) in the Ukraine situation, there is a strong view that Russia and China are reducing their US dollar foreign exchange reserves (reserve assets) and further increasing their gold holdings. is.
De-dollarization is real and is happening fast.
— Wall Street Silver (@WallStreetSilv) April 24, 2023
According to data from the World Gold Council, an international research organization, reported by the Nihon Keizai Shimbun at the end of January, net purchases by central banks around the world, led by China, will reach the highest level in about 50 years in 2022. bottom.
Russia, a gold-producing country, does not disclose its foreign exchange reserves, but “it is highly likely that it is stockpiling gold as foreign exchange reserves,” he said.
Especially after 2023, the US dollar, which has dominated international transactions as a key currency, is accelerating. US Treasury Secretary Janet Yellen also acknowledged in April this year that the US financial sanctions had weakened the dollar’s hegemonic position, showing a sense of crisis.
While the US stock index fell, Bitcoin, which tends to correlate with gold, also rose compared to the previous day.
Bitcoin is highly scarce with an upper limit of issuance of 21 million BTC, and the market supply will decrease due to the “half-life” that occurs once every four years. It is sometimes referred to as “Digital Gold”.
connection:Bank of America: Changes in Correlation Coefficients Suggest Bitcoin Is Starting to Become Digital Gold Again
According to data from research firm Kaiko, the correlation coefficient (monthly average) between Bitcoin and gold has surged since March of this year, reaching 57%. It is the highest value in the past two years.
—Kaiko (@KaikoData) April 26, 2023
Bitcoin’s year-to-date rise and fall rate is +74.5% as of the 4th. Ethereum gained +58.2%.
Click here for a list of market reports published in the past
[Recruitment]Recruitment of new personnel due to Web3 business expansion
Japan’s largest cryptocurrency media CoinPost is looking for full-time employees and interns as it expands its Web3 business.
1. Media Business (Editorial Department)
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4. Open Position (students welcome)
Details https://t.co/UsJp3v8mSH pic.twitter.com/B98JZmoQbW
— CoinPost-virtual currency information site-[app delivery](@coin_post) February 14, 2023