Bitcoin Surges Past $4,000

US markets closed virtually unchanged overnight as the North Korea induced volatility has subsided. The VIX index, a measure of volatility, briefly spiked above 16 but has now retreated back below 12, further confirming that the market is much less concerned about North Korea than it was a few days ago. Gold retreated to $1,272 per ounce overnight but is still in a longer term uptrend that started in early July. A close below $1,250 would signal that a period of sideways trading is likely.

US retail sales data was released for the month of July with growth significantly beating consensus expectations. This came at the same time as a strong empire state manufacturing index release significantly beat consensus. However, US stock markets barely reacted to either piece of good news.

Bitcoin, the most well-known of the digital currencies, has surged over the past few days to reach a high of US$4,450, a gain of around 350% since the start of the year. Interest in digital currencies has spiked recently as proponents tout benefits such as a lack of centralised control and limited supply. Many buyers of bitcoin are simply speculating on future price rises, however, and anyone thinking of buying the currency should realise that it is incredibly volatile and could fall in value as quickly as it rose.

API oil inventory data for last week was released showing a large 9.2 million barrel decline in crude inventories while gasoline inventories showed a small build. The market took this as a mildly bullish report which helped WTI move into the high $47’s but the rally stalled leaving crude at $47.66 per barrel.

Data Releases:

–    AU Wage Price Index 11:30am AEST

To view the Rivkin economic calendar and Local Markets matrix, members can click here.

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.