Bitcoin Futures Begin Trading

Both the Dow Jones and S&P 500 climbed approximately 0.5% on Friday. The ASX 200 also climbed on Friday, closing just below the 6,000 level at 5,994. US markets are again breaking record highs and are set to finish the year with substantial gains barring a calamity in the final couple weeks of trading. The S&P 500 is currently up 18% year to date.

Bitcoin futures begin trading today with the Cboe the first US exchange company to get its futures to market. CME group will be launching its bitcoin futures at the beginning of next week. The launch of futures will make bitcoin easier to trade, and in particular, easier to short sell, but it remains to be seen whether this reduces the extreme volatility of the cryptocurrency. Weekend trading saw the cryptocurrency drop around US$4,000 before partially recovering to US$14,500, highlighting how extreme the price swings can be. This level of volatility will likely see the futures contract regularly hit its daily price move limits which will cause a two-minute trading halt if the price moves more than 10% and a five-minute halt if it move more than 20%.

The final FOMC meeting occurs later this week at which the board is due to raise interest rates by 0.25%. This would bring the cash rate to 1.25% and mark the fourth interest rate increase for this cycle. This will likely be Janet Yellen's second last meeting before handing over the reins to Jerome Powell. Also later in the week, on Thursday, Australia releases employment data for the month of November.  

Data Releases:

–    No Significant Data

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This article was written by William O'Loughlin – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via william.oloughlin@rivkin.com.au or by phoning +612 8302 3633.