Weekly Market Recap
A quiet place
Week in review
- U.S. consumer confidence falls marginally to 117.2
- RBNZ holds rates, indicates possible earlier path for rate hikes
- Australia capital expenditure rose 6.3% 1Q21
- Australia 1Q21 Real GDP
- RBA official cash rate
- U.S. nonfarm payrolls
Thought of the week
When there is little tier one economic data, corporate news or policy announcements to digest, markets can lack direction. At these times, focus turns to other possible indicators of risk sentiment, the latest being the movement in the price of crypto currencies. As the value of crypto currencies rose earlier in the year there was a growing chorus of folks advocating their role in portfolios as another potential source of diversification. However, falling prices and momentum degradation, ie selling leading to more selling, has calmed some of those voices. Investors that have dipped their toe into crypto markets may be rotating towards more traditional diversifiers such as gold, and be more wary of the volatility that comes with new assets, such as crypto currencies (see chart). There may be a role for crypto currencies in portfolios, but the size of the allocation may depend on what you are prepared to lose.
Volatility in crypto currencies dwarfs that of equities
30 day realized volatility, annualised
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