The G20 summit took place in Bali, Indonesia, on November 2022…
Bewitching predictions for 2022
Information is not investment advice
Hello from the far 2022! FBS analysts have used some magic to travel to the future and brought you some hilarious predictions. Enjoy the readthrough and remember: there's a grain of truth in every joke!
Traders and the Golden Stone
Do you know that the limits we face are in our minds? Most traders dream of opening a buy trade in XAU/USD and then chilling until they have enough money to buy a Golden Globe and other shiny stuff. And yet: what if such a thing is no longer possible? Will you give up or try to argue with the market almighty?
The truth is that the golden stone rolled down in 2022. Cryptocurrencies and the booming stock market had already stolen the spotlight from gold. The virus recedes, and the Fed starts raising interest rates. The story of 2013 is repeating: back then, XAU/USD dropped by almost 30%. Now we are at $1600, and it’s not 30% down yet!
Don’t panic, young apprentices of trading wizardry! Remember that buy trades and sell trades are equally good, so consider selling when prices decline. You need to follow the market! And if you don’t like downtrends, you can always turn your chart around so that you’ll be looking at the bottom and not the top. Don’t forget to choose the correct order button, though.
Always select the right button in the New Year!
Oil, gas, and the storage of secrets
Elon Musk made a revolution and became the world leader. His followers and crypto fans are his people and his army! Now the main goal of humanity is to move to Mars, and nothing else matters. This is what the great Musk said. He is already at the final step of building a rocket to transport people to the Red Planet. What is rocket fuel? The cleanest gas. So, you might guess what happened. Gas prices skyrocketed faster than Bitcoin on its best days! Does it reach $100, $200, $300? No, $1000000 for a gallon! Whereas, oil dropped to its lowest as nobody needs it anymore…
Enjoy the rest of 2021, and see you in 2022!
Turkish lira and the Prisoner of Erdogan
The world has changed more than ever. After Turkish President Erdogan replaced the central bank’s governor ten more times, the bank rate is now 0%, just like in Europe. Oh, wait, the inflation is 69% now. How is that even possible? Do Turkey’s citizens have a way out of economic collapse? Yes, of course, they have.
Turkey tried to move on to the dollar as the main currency in the country, but… You better not know what the Fed’s monetary policy in 2022 was. Anyway, the dollar is not an option as well. What to do?
Bitcoin is here to save the day! I mean, the year! The best crypto to fight inflation is the one that has a limited maximum amount of coins. So now every Turkish citizen uses Bitcoin, and lira’s inflation is not a problem anymore. You can make the rate negative, and no one carries about it anymore.
Diversify your portfolio, and have an excellent year!
Ethereum and the Network of Fire
The year 2022. Proof-of-work is now out of fashion. Miners moved to staking. But Vitalik Buterin, the creator of the Ethereum, finally found out how to write code fast, so from Proof-of-stake ETH moved to proof-of-time, then to proof-of-space, and eventually, to proof-of-proof, сonsensus mechanism that works without any complex explanations. You need to say that the transaction is fantastic and everything is fine from now. Also, fees for transactions are extremely low. How cool is that!
But what is up with the deflationary model? It has become so deflationary that every ETH that is mined gets burned. Moreover, you need to burn your ETH to mine ETH. Of course, this created astonishing supply slack, and now 1 Ethereum is worth way more than 1 Bitcoin. And you need to see it by yourself!
Everything is now working on Ethereum. Supply chains, smart contracts, video games, even the Internet itself. It is a great time to live with complete decentralization, the absence of restrictions, a free market, and no Covid whatsoever.
Buy only trust-worthy coins in 2022. Happy New Year!
Mr. Powell and the Order of the Hawks
How about a fairy tale?
Jerome Powell is sitting on a cozy sofa in his old-style cottage in Silver Spring. The weather is gloomy, and a mixed waterfall of snow and rain was knocking into the window. Behind the JJ (this is how his wife called him), a huge monitor is live-streaming the size of the US budget’s debt.
It seems like JJ is asleep. However, his mouth is murmuring words with his eyes shut.
“Inflation, jobs, coronavirus…”
He is not sleeping; he is mind traveling into 2022. Only true Chairs of the Federal Reserve can do that. So, what does he see?
Unsurprisingly to everyone, consumer prices kept rising in 2022. After ending the year with 6.8% in November, the US CPI accelerated and reached more than 7% in February – a crazy figure unseen from 1990. The economic activity was rebounding as well. The actions of the Federal Reserve were definitely needed. So, the Fed doubled the pace of its taper. However, inflation rose even more in April. So, the Fed tightened its policy even more. In May, inflation skyrocketed to 10%. Woah! EUR/USD hit the 1.0500 level! All media is panicking! “Does it mean that the US entered hyperinflation? What should we do? What should the Fed do?”
“HIKE! HIKE! HIIIKE!” – The Fed Powell wakes up screaming. The snow is falling outside, and everything looks peaceful, despite the red letters counting the US Debt on the wall. JJ exhales. It is December 31, 2021.
Elon Musk and Half-blooded Dog Coins
Long story short:
And then, this will happen:
So, we expect that in 2022 we will see more tokens being pumped by Elon Musk’s tweets. Will they be dogs, or maybe he will choose cats this year (the Year of Tiger)?
S&P500 and the Margin Hallows
January CPI in the US broke above 50%, and it is flying towards 100%. Groceries are growing in price while customers are reaching the checkout. The Fed keeps announcing that inflation is under control and it is still too early for tapering.
March The 20th strain of Covid-19 was spreading around the world. To stay healthy, people need to take an everyday injection. That is how the world became drug-addicted.
May Sell in May and go away? Not in 2022. More than 100 hedge funds got margin calls. It was a bad idea to “short” S&P500. The main US index broke through 8000.
August Moderna and Pfizer became the world’s largest companies with capitalizations over 40 trillion each. Moderna purchases Apple, Pfizer buys Tesla. The rally keeps going… Facebook finally released the Metaverse. The Crypto market outstripped the US economy by capitalization. However, Microstrategy corp got bankrupt. CEO’s should have been buying SAND instead of Bitcoins.
December Correction finally happens because you bought US500 ahead of the New Year rally.
By the way: Happy New Year! Enjoy the next ordinary year in the market!
The deafening news shocked the whole world yesterday: the British Queen Elizabeth II died peacefully at the age of 96…
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.
Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?