What a Blast! Draghi this week

When we think about what makes money money, aside from the perception of value, we also need to have liquidity. Meaning, that it’s not enough for people to believe something has value, it also needs to be easily exchangeable for goods and services in order to be considered a viable store of wealth.

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In Japan, the government has already declared that bitcoin is a valid form of money and we know that hundreds of thousands of stores there are already accepting or are in the process of making bitcoin acceptable.

Recently it was announced that Australia will be installing 3000 brand new bitcoin ATM machines. The machines will allow people to exchange both ways so people can buy and sell bitcoin instantly for Australian Dollars. This type of activity exponentially increases the liquidity of Bitcoin in a strategic region that is key in the war on government money.

Thanks a lot to @etorowiz for sending this to me. Keep up the excellent trading Neville!

Just when we thought the dust was safely under the North Korean rug a huge blast sent it flying all over the place once again.

Kim Jong Un claims that the 6.3 magnitude blast at their testing grounds on Sunday was indeed a Hydrogen Bomb and that they have the technology to attach it to a long range missile, the kind that they flew over northern Japan last week.

For those of us that are less up on our intricate knowledge of nuclear fission, a Hydrogen Bomb can be up to 1000 times more powerful than an Atomic bomb. Experts are currently debating whether Kim is telling the truth about both outrageous claims but what is clear is that the international community is now extremely nervous.

Markets in Asia are down significantly this morning as are the European stocks.Though timing for such an event is never good, this blast comes at a particularly bad time both for Xi Jinping who is hosting the BRICs summit and for Donald Trump who is fighting a number of ciritcal battles at home

The NFP Jobs report that came out on Friday was really poor. Not only did the numbers fail to meet analyst expectations, but the numbers for July were revised down as well.

Stocks on Wall Street were seemingly unphased by the bad news and even managed to close the day on green. At this point, the only thing the US equity markets can really think about is the upcoming tax reforms. If there is any room for any other thoughts we could see it on the opening today due to the Geopolitical mess mentioned above.

The US Dollar, on the other hand, is a bit more vulnerable and did spike down following the announcement but managed a remarkable recovery by the end of the day.

We can see the action quite well against the Japanese Yen…Of course, the North Korean nuclear test on Sunday overshadowed the NFP and the Yen started out this week in a much stronger position.

Many crypto currencies reached new all time highs on Friday before a fierce pullback that we’re still in at the moment.

Bitcoin briefly breached the $5000 per coin mark just before the pullback began.Remember, the overall crypto industry gained 84% during the month of August. At this point, we’re about 11% from the peak. So if the pullback stops at this moment it would be considered quite small in the grand scheme of things.

Momentum traders should keep a close eye on how things progress today.

What else?

Today is Labor Day in the US and Canada. Make sure to check the Market Hours page for opening times on the assets you are trading.

The Reserve Bank of Australia will be setting their interest rate early tomorrow morning, which is always fun for Forex traders.

Investors are already getting excited about the ECB meeting this Thursday, which will be followed by a press conference from Mario Draghi. Euro is on track for one of it’s best years ever against the US Dollar and it’s making European Bankers nervous. Draghi will no doubt be willing to do “whatever it takes” but what will it take? We’ll find out soon enough.

Wishing you an amazing week ahead!