The charts that matter: China upsets cryptocurrency markets

Bitcoin slid again this week after China declared all cryptocurrency transactions illegal. Here’s what’s happened to the charts that matter most to the global economy.

Welcome back. 

On the cover of this week’s magazine we’ve got Boris Johnson in the dark feeding the electricity meter. With the wind refusing to blow, cross-channel electricity cables exploding and gas prices going through the roof, we could be in for a very tough winter. Simon Wilson looks at what’s going on and weighs up the possibility of the lights going off this winter.

Elsewhere, Dr Mike Tubbs looks at the university spin-out companies involved in cutting edge science and picks the best ways to invest in them. And in our other big feature this week, John Chambers outlines how to cash in on the “beautiful game”. You might think football is just for the oligarchs, but football clubs are also huge global brands. He looks at how you can get in on the action. If you’re not already a subscriber, sign up here and get your first six issues free

This week’s “Too Embarrassed To Ask” video explains what a “contagion” is. It’s a term we’re all probably familiar with in its epidemiological sense these days, but what does it mean in terms of financial markets? Find out exactly what it means here

And in this week’s podcast, Merryn’s joined by Rob Arnott of Research Affiliates. They talk about some of the unexpected consequences of Covid and the opportunities for investors, plus the “wonderful safe haven” of UK value stocks, and the attractions of energy companies. Listen to the episode here.

Here are the links for this week’s editions of Money Morning and other web articles you may have missed:

Now for the charts of the week. 

The charts that matter 

Gold attempted a rally early on in the week, but ended on a depressed note, partly because the Federal Reserve was more hawkish than expected (ie monetary tightening could be coming sooner than investors had hoped).

Gold price chart

Gold price chart

(Gold: three months)

That said, the US dollar index (DXY – a measure of the strength of the dollar against a basket of the currencies of its major trading partners) slipped, which isn’t necessarily what you’d expect in the context – although it might be partly because other global central banks look set to tighten still faster than the Fed.

US dollar index chart

US dollar index chart

(DXY: three months)

The Chinese yuan (or renminbi) continued to tread water (when the red line is rising, the dollar is strengthening while the yuan is weakening). 

USD/CNY currency chart

USD/CNY curency chart

(Chinese yuan to the US dollar: since 25 Jun 2019)

The yield on the ten-year US government bond perked up at the idea of interest rates rising. 

US Treasury bond yield chart

US Treasury bond yield chart

(Ten-year US Treasury yield: three months)

The yield on the Japanese ten-year bond fell back, however.

Japanese government bond yield chart

Japanese government bond yield chart

(Ten-year Japanese government bond yield: three months)

And the yield on the ten-year German Bund continued its gradual rise.

German bond yield chart

German bond yield chart

(Ten-year Bund yield: three months)

Copper continued to trade sideways, rattled by China’s economic and financial system woes, of which Evergrande is the most obvious symptom. 

Copper price chart

Copper price chart

(Copper: nine months)

The closely-related Aussie dollar edged up a little.

AUD/USD currency chart

AUD/USD currency chart

(Aussie dollar vs US dollar exchange rate: three months)

Bitcoin had a miserable end to the week after China basically banned cryptocurrency transactions (although it’s hardly the first time China has demonstrated hostility to cryptocurrencies).

Bitcoin price chart

Bitcoin price chart

(Bitcoin: three months)

US weekly initial jobless claims rose by 16,000 to 351,000. The four-week moving average fell by 750 to 335,750. 

US initial weekly jobless claims chart

US initial weekly jobless claims chart

(US initial jobless claims, four-week moving average: since Jan 2020)

The oil price rose to more than $77 a barrel as spiking energy prices hit the headlines.

Brent crude oil price chart

Brent crude oil price chart

(Brent crude oil: three months)

Amazon recovered some of its recent losses.

Amazon share price chart

Amazon share price chart

(Amazon: three months)

Tesla had a remarkably similar week.

Tesla share price chart

Tesla share price chart

(Tesla: three months)

Have a great weekend. 

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