ETF Securities Research Blog

Is Bitcoin a reversion to the gold standard?

“We have gold because we cannot trust governments.” President Herbert Hoover famously commented. Many investors are buying bitcoin for precisely this reason and feel that central bank intervention is devaluing fiat currencies. Others invest because the potential widespread acceptance and usability of Bitcoin will see prices rise over time.

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Is dovishness dead at the Fed?

Economists are notorious for sitting on the fence and Federal Reserve (Fed) Chair Yellen is no different: her latest speech spent part of the time focussing on the possibility that the Fed underestimated the weakness of the price and labour market dynamics and the other part highlighting that policy shouldn’t move too slowly to offset potential inflation pressure. However, the more hawkish tone of Chair Yellen’s comments underpinned a rise in bond yields and the US Dollar (USD): two trends which we expect to continue.

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Deflating the ECB’s bond ‘balloon’

European bond yields are hovering near the lowest levels in history, but we believe it is not a bubble in the traditional sense. Yields are artificially low, driven by extraordinary levels of stimulus from the ECB. In this framework, we would characterise the situation as a bond balloon, not a bond bubble. Read more…

If Bank of England doesn’t hike rates in 2017, then when?

One year on from the last rate cut, the Bank of England has kept rates on hold, with the MPC voting 6-2 in favour of the decision (roughly the same as last month). Although policy remains unchanged, GBP should remain supported by what is expected to be a tighter policy path in 20-17/2018. Indeed, Governor Carney indicated that policy may need to be tightened at a faster rate than the market is currently pricing. Read more…

Is the Canadian Dollar signalling an oil price bottom?

The Bank of Canada (BOC) raised rates for the first time in seven years this week, the second major central bank to do so after the Federal Reserve. The BOC indicated that its economy ‘is approaching full capacity’. As a result, the Canadian Dollar, the so-called Loonie, jumped to the highest level against the US Dollar in 13 months. A rising CAD could be signalling a bottom for oil prices. Read more…