Watching the images come in from Spain over the weekend it’s difficult to get over the shock. Government forces in black riot gear firing rubber bullets and beating the crowds back with batons. Men in masks forcefully entering polling stations and violently confiscating ballot boxes.
These are not the scenes we’re used to, not in Western Europe. The Prime Minister of Spain was quick to defend the actions of his Police force but by doing so he has played right into the hands of the Catalonian separatists. Every time he uses the term “illegal” to describe the referendum people are reminded about who makes the laws.
Polls from one week ago showed the chances of this referendum voting against independence. However, seeing an elderly citizen beaten with a stick has a way of swaying public opinion.
The separatists are now prepared to declare their own independence in the coming days. After all, now that the world has just seen a clear demonstration of their reason for wanting independence they have the upper hand and would be foolish not to press the advantage.
Sometimes the harder you try to stop something the likelier it is to happen.
All things considered, the stock markets are doing quite well. Most major indices surged into the closing bell on Friday and are even opening the weeks with some gaps higher.
As we’ve discussed in the past, the stock markets used to be a good barometer for risk and an event like we saw over the weekend would have a tendency to push things down. However, due to central bank interference in the markets, this risk metric is now broken and European stocks will keep going up as long as they are supported by the ECB.
Gold has dropped almost $10 an ounce since opening last night. The world’s favorite precious metal has also ceased to be a barometer of market sentiment and is simply reacting to the strength in the US Dollar.
Many portfolio managers are still advising to store a percentage of your assets in gold on low leverage as a hedge against the USD weakness that we’ve been seeing since Trump took office. So the lower prices may provide a few excellent entry points for this strategy over the coming days or possibly weeks.
Crypto’s make another dash
Bitcoin and the crypto market is having a good start to the week. After a long weekend of mostly nothing, BTC has busted through $4300 a coin early during the Asian session this morning with volumes coming mainly from Japan and South Korea.
The next point of resistance on the chart is $4,500 (dotted yellow line). If we get beyond that it’s clear skies to the all time high of $5,000.
eToro is very proud to announce that we have recently added the option to trade Dash!
This unique cryptocurrency is currently the sixth most valuable network with a total market cap of $2.4 Billion. Dash is a champion of online payments and even allows for small amounts to be sent completely anonymously.
Let’s have an amazing week ahead!!