Crypto crisis!
By Arnaud Masset
Cryptocurrencies sold off sharply this week. Bitcoin dropped from $7,370 to $6,420 in less than 24 hours. Ethereum fell off a cliff to hit $210 this morning, its lowest since September. Total market capitalisation slid to $202 billion, down $37 billion in the last day. The legal environment for cryptos seems to have soured. Regulators persistently refuse Bitcoin a legitimate status. This convinced Goldman Sachs to reduce its ambitions for a crypto exchange. The bank has not closed the door but is readjusting its scope.
Technically, the top of the multi-month downtrend continues to resist (currently around the $7,500 level), while on the downside, the $5,600-$5,700 support area is still holding. In the short-term, we expect Bitcoin to continue grinding toward $6,000 before bouncing back toward $7,500.
Swiss economy robust, but threats loom
By Vincent-Frédéric Mivelaz
Switzerland’s economy is on the rise and appears unaffected by geopolitics. GDP is up 3.4% annually, a pace not seen in the last 8 years! The quarterly GDP advance of 0.7% remains above average (0.4%) for the fifth consecutive time. Key contributors are manufacturing and energy, which benefited from exports and a favourable exchange rate. The CHF has depreciated against the Euro, from 1.09 in September 2015 to 1.13 now, a boost for Switzerland’s export-oriented businesses.
However, the trend is turning. Risks include Turkey’s plunging lira, Italy’s budget deficit and US duties on EU auto imports. The Swiss National Bank expects GDP growth to slow to 2% by the end of the year (still, a rate not seen since 2014). With solid growth and a strong franc, the SNB is not expected to raise interest rates any time soon. Currently trading along 1.1282. EUR/CHF is declining further, heading to 1.1265 in the short-term