Cupcakes & Rainbows

Traditional Markets

Adding to the concerns of a trade war, US politics seem to have taken a turn for the worse.

This drew some pretty sharp criticism from the President's political opponents who pointed out that according to Trump's campaign promise, Mexico was supposed to pay for the wall. So it seems Trump is now at a Mexican standoff.

With just two months before the current budget expires on September 30th, this could play a big role in financial forecasts over the next few weeks.

For now, the stock markets have opened slightly negative, but volatility is still subdued as we await...

Policy Week

This week we'll get critical policy guidance from three major central banks.

It all starts in Japan where we have a much-anticipated interest rate decision and press conference with the Bank of Japan (BoJ) Governor Haruhiko Kuroda.

Kuroda has intentionally surprised markets in the past, so we'll need to watch very closely. Going into the meeting tomorrow morning in Japan, there's a lot of speculation that we could indeed see some sort of snap policy decision.

Their recent bond purchases have been getting a bit erratic causing some to believe that an interest rate hike could be in the cards sooner than was previously anticipated.

At the moment, Japan maintains a policy rate of -0.10%. Even a hint that this will be raised, could impact the Yen. An outright adjustment could really shake things up. However, it also seems likely that we could be looking at is some sort of shift in policy that changes the way they make their monthly (QE) bond purchases.

An interest rate hike would very likely serve to strengthen the Yen. However, a strong Yen is counter to what the BoJ is trying to accomplish. This is going to be a fun one.

What's more interesting to me though is the potential impact that the coming meeting could have on....

Bitcoin

With the SBI Group's virtual currency desk coming online it's going to be very difficult to gauge Japanese volumes going forward.

Until now, we were able to see fairly openly the trading volumes from Japan's top crypto exchange bitflyer. However, SBI group is far less likely to publish their volume figures and even if they do, it could take a while to understand how and where to find them. Hoping that I'm wrong on this one but this is the indication we're getting at the moment.

So for the meantime, we may need to check the actual blockchain a lot more to get an understanding of volumes. Here we can see the average transactions per second on the chain, which has sustained above 2.5 for the past week.