Short-Term Buy on Bitcoin?

Traders' Opinions

Summary:

The narrative behind BTC’s meltdown is the continuous institutional outflows on crypto--following the averse attitude of investors on risk assets.

The crypto winter has certainly placed Bitcoin at such a disadvantaged situation following its fall to the $20,000 level. The narrative behind BTC's meltdown is the continuous institutional outflows on crypto--following the averse attitude of investors on risk assets.

However, opposite to my prediction on the previous weeks, we just may see Bitcoin start a subtle climb to poster some losses on what has transpired for the past few weeks. As seen in the 4 hour chart, Bitcoin has just tapped into a wide supply area--however, to no avail, price has failed to provide a dominant bearish response.

In addition to that, Bitcoin has finally shown willingness to go further up as it has broke structure twice last week in the 4 hour timeframe. Furthermore, it is nearing a hidden demand zone--which may very likely provide a good long opportunity targeting recent highs.

As of the moment, should Bitcoin provide bullish signs along $21,028.98, I will be forecasting that there is a possibility for price to reach an upside target of $22,400.

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Owen Li

The ruling coalition of Liberal Democratic Party and its junior partner Komeito scored a strong victory in Japan's upper house elections. There might be sympathetic votes for the tragic death of former Prime Minister Shinzo Abe. But it's also seen as a nod to Abe's legacy on bringing Japan back as a "normal" country with stronger military and alliance with the U.S. Dollar is currently the stronger one, followed by Swiss Franc and then Kiwi. On the other hand, Aussie is the second weakest following Yen, followed by Sterling.

Technical, a major focus for the week is on whether EUR/USD's down trend would pick up more momentum from the current level. The key level to watch is parity. Break of 1.0348 support turned resistance will be the first sign of stabilization, and bring consolidations. But sustained break of parity could prompt even deeper selloff, risking more downside acceleration. Yen Selloff Resumes, RBNZ and BoC to Hike This Week_1

Yen Selloff Resumes, RBNZ and BoC to Hike This Week_1

In Asia, at the time of writing, Nikkei is up 1.26%. Hong Kong HSI is down -2.74%. China Shanghai SSE is down -1.46%. Singapore Strait Times is up 0.06%. Japan 10-year JGB yield is down -0.005 at 0.246.

BoJ Kuroda: We won't hesitate to take additional monetary easing steps as necessary

BoJ Governor Haruhiko Kuroda warned of the "very high uncertainty" on economic outlook due to surging commodity prices. While the economy is showing some signs of weakness, overall it's still picking up as a trend.

"We won't hesitate to take additional monetary easing steps as necessary," he added, repeating that short- and long-term interest rate targets to "move at current or lower levels."

Released from Japan, M2 rose 3.3% yoy in June versus expectation of 3.4% yoy. Machine orders dropped -5.6% mom in May, versus expectation of -5.5% mom.

NZD/USD in tight range, eyeing support from 0.6098 projection level

NZD/USD is staying in tight range above 0.6123 temporary low, looking forward to RBNZ rate hike later in the week. There is prospect of a rebound from medium term projection level at 0.6098 (100% projection of 0.7463 to 0.6528 from 0.7033). But break of 0.6251 minor resistance is needed to be the first sign of bottoming, while firm break of 0.6395 resistance is needed to confirm. However, sustained break of 0.6098 would risk more downside acceleration to 161.% projection at 0.5520, which is close to 0.5467 (2020 low). Yen Selloff Resumes, RBNZ and BoC to Hike This Week_2

Yen Selloff Resumes, RBNZ and BoC to Hike This Week_2

Yen Selloff Resumes, RBNZ and BoC to Hike This Week_3

AUD/CAD staying in down trend, risks more downside

Canadian Dollar has been outperforming other commodity currencies recently and stays generally firm. There is prospect of further rally in the Loonie if BoC opts for a 75bps rate hike this week, instead of 50bps.

Looking at AUD/CAD, it's staying well in the down trend from 0.9991 (2021 high). Outlook stays bearish as long as 0.8916 minor resistance holds. Break of 0.8744 temporary low will indicate down trend resumption. Next medium-term target will be 100% projection of 0.9991 to 0.8906 from 0.9514 at 0.8429.

Nevertheless, firm break of 0.8916 will indicate short term bottoming and bring stronger rebound first. Yen Selloff Resumes, RBNZ and BoC to Hike This Week_4

Yen Selloff Resumes, RBNZ and BoC to Hike This Week_4

RBNZ and BoC rate hike, U.S. CPI and retail sales

Two central banks are expected to deliver rate hikes this week. RBNZ should raise the official cash rate by another 50bps to 2.50%. According to RBNZ's own forecast variables in May, OCR could reach as high as 3.9% in Q2 2023, before gradually falling back in the second half of 2024. There is little that suggests RBNZ would deviate from is. So, a hawkish stance should be maintained.

Opinions on whether BoC would hike by 50bps or 75bps this week is divided. Governor Tiff Macklem noted back in June 9, "we may need to take more interest rate steps to get inflation back to target. Or we may need to move more quickly, we may need to take a larger step." But ti's unsure whether that would really translate into a larger hike this time. BoC will also publish new monetary policy report with economic projections.

On the data front, U.S. CPI and retail sales will probably catch most attention. But attention will also be on Germany ZEW, UK GDP, and a batch of data from China, including trade balance, GDP, retail sales and industrial production. Here are some highlights for the week:

· Monday: Japan machine orders; Italy retail sales.

· Tuesday: Japan PPI; Australia Westpac consumer sentiment, NAB business confidence; Germany ZEW.

· Wednesday: RBNZ rate decision; China trade balance; Germany CPI final; UK GDP, productions, trade balance; Eurozone industrial production; U.S. CPI; BoC rate decision; Fed's Beige Book.

· Thursday: Australia inflation expectations, employment; Swiss PPI; Canada manufacturing sales; U.S. PPI, jobless claims.

· Friday: New Zealand BusinessNZ manufacturing; China GDP, retail sales, industrial production, fixed asset investment; Japan tertiary industry index; Eurozone trade balance; Canada wholesales sales; U.S. retail sales, Empire State manufacturing, import prices, industrial production, U of Michigan consumer sentiment, business inventories.

USD/JPY Daily Outlook

Break of 136.99 suggests up trend resumption in USD/JPY and intraday bias is back on the upside. Sustained trading above 136.99 will confirm and target 100% projection of 114.40 to 131.34 from 126.35 at 143.29. For now, outlook will remain bullish as long as 134.73 support holds, in case of retreat. Yen Selloff Resumes, RBNZ and BoC to Hike This Week_6

Yen Selloff Resumes, RBNZ and BoC to Hike This Week_6

In the bigger picture, current rally is seen as part of the long term up trend from 75.56 (2011 low). Next target is 100% projection of 75.56 (2011 low) to 125.85 (2015 high) from 98.97 at 149.26, which is close to 147.68 (1998 high). This will remain the favored case as long as 126.35 support holds. Yen Selloff Resumes, RBNZ and BoC to Hike This Week_7

Yen Selloff Resumes, RBNZ and BoC to Hike This Week_7

Source: ActionForex

Risk Warnings and Disclaimers

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Damon

Bitcoin has historically seen its price down from previous highs for more than three years, and the latest peak took place just seven months ago.

Bitcoin (BTC) experienced one of its most brutal crashes ever in 2022, with the BTC price plummeting below $20,000 in June after peaking at $68,000 in 2021.

June 2022 has become the worst month for Bitcoin since September 2011, as its monthly losses mounted to 40%. The cryptocurrency also posted its heaviest quarterly losses in 11 years.

However, the current market sell-off doesn't make Bitcoin crashes and bear markets exclusive to 2022. In fact, Bitcoin has survived its fair share of crypto winters since the first Bitcoin block, or the genesis block, was mined back in January 2009.

As we zoom out the Bitcoin price chart, Cointelegraph has picked up five of the most notable price declines in the history of the seminal cryptocurrency.

Bear market No. 1: Bitcoin crash from $32 to $0.01 in 2011

Time to retest previous high: 20 months (June 2011–February 2013)

The Bitcoin price broke its first major psychological mark of $1.00 back in late April 2011 to start its first-ever rally to hit $32 on June 8, 2011. But, the joy didn't last long, as Bitcoin subsequently plummeted in value to bottom at just $0.01 over the course of a few days.

The sharp sell-off was largely attributed to security issues at the now-defunct Mt. Gox, a Japanese crypto exchange that traded the majority of Bitcoin at the time. The exchange saw 850,000 BTC stolen due to a security breach on its platform, raising major concerns about the security of Bitcoin stored on exchanges.

With BTC losing about 99% of its value in a few days, Bitcoin's June 2011 flash crash became a big part of Bitcoin history. The event opened a long period before the BTC price recovered to the previous high of $32 and climbed to new highs only in February 2013. A Brief History of Bitcoin Crashes and Bear Markets: 2009–2022_1

A Brief History of Bitcoin Crashes and Bear Markets: 2009–2022_1

It's difficult to track the pre-2013 Bitcoin price when compared to more recent charts. Popular price tracking services and sites like CoinGecko or CoinMarketCap do not track Bitcoin prices before April 2013.

"Bitcoin was very much in its infancy pre-2013 and there were not that many places trading Bitcoin back then," CoinGecko chief operating officer Bobby Ong told Cointelegraph. He added that CoinGecko has not received many requests for pre-2013 data, so it is low on the priority for the platform.

Bear market No. 2: Bitcoin tanks from $1,000 to below $200 in 2015

Time to retest previous high: 37 months (November 2013–January 2017)

According to BTC price data collected by Cointelegraph, Bitcoin price reached $100 in mid-April 2013 and then continued surging to briefly hit $1,000 in November 2013.

Bitcoin entered a massive bear market shortly after breaking $1,000 for the first time in history, with the BTC price tumbling below $700 one month later. The price drop came as the Chinese central bank began to crack down on Bitcoin in late 2013, prohibiting local financial institutions from handling BTC transactions.

The cryptocurrency continued plummeting over the next two years, bottoming at around $360 in April 2014 and then dropping even further to hit a low of $170 in January 2015. A Brief History of Bitcoin Crashes and Bear Markets: 2009–2022_2

A Brief History of Bitcoin Crashes and Bear Markets: 2009–2022_2

The long cryptocurrency winter of 2014 became associated with the hacked Mt. Gox crypto exchange, which halted all Bitcoin withdrawals in early February 2014. The platform then suspended all trading and eventually filed for bankruptcy in Tokyo and in the United States.

Some major financial authorities also raised concerns about Bitcoin, with the U.S. Commodity Futures Trading Commission claiming that it had power over "Bitcoin price manipulation" in late 2014.

The general sentiment around Bitcoin was mainly negative until August 2015, when the trend started a long-term reversal. Amid the strong bullish market, Bitcoin eventually returned to the $1,000 price mark in January 2017. This was the longest all-time high price recovery period in the history of Bitcoin.

Bear market No. 3: Bitcoin plunges below $3,200 after hitting $20,000 in December 2017

Time to retest previous high: 36 months (December 2017–December 2020)

After recovery to $1,000 in January 2017, Bitcoin continued to rally to as high as $20,000 by the end of that year.

However, similar to Bitcoin's previous historical peak of $1,000, the triumph of $20,000 was short-lived, as Bitcoin subsequently dropped and lost more than 60% of its value in a couple of months.

The year 2018 quickly became referred to as a "crypto winter" as the Bitcoin market continued shrinking, with BTC bottoming at around $3,200 in December 2018.

The crypto winter kicked off with security issues on Coincheck, another Japanese cryptocurrency exchange. In January 2018, Coincheck suffered a gigantic hack resulting in a loss of about $530 million of the NEM (XEM) cryptocurrency.

The bear market further escalated as tech giants like Facebook and Google banned ads for initial coin offerings and token sales ads on their platforms in March and June 2018, respectively.

Global crypto regulation efforts contributed to the bear market as well, with the U.S. Securities and Exchange Commission rejecting applications for BTC exchange-traded funds. A Brief History of Bitcoin Crashes and Bear Markets: 2009–2022_3

A Brief History of Bitcoin Crashes and Bear Markets: 2009–2022_3

Bear market No. 4: BTC slumps from $63,000 to $29,000 in 2021

Time to retest previous high: six months (April 2021–October 2021)

Bearish sentiment dominated the crypto market until 2020, when Bitcoin not only came back to $20,000 but entered a massive bull run, topping at higher than $63,000 in April 2021.

Despite 2021 becoming one of the biggest years for Bitcoin, with the cryptocurrency passing a $1 trillion market cap, Bitcoin also suffered a slight drawback.

Shortly after breaking new all-time highs in mid-April, Bitcoin drew back slightly, with its price eventually dropping to as low as $29,000 in three months.

The mini bear market of 2021 came amid a growing media narrative suggesting that Bitcoin mining has a problem related to environmental, social and corporate governance (ESG).

The global ESG-related FUD around Bitcoin had been exacerbated even further with Elon Musk's electric car firm Tesla dropping Bitcoin as payment in May, with the CEO citing ESG concerns. Just three months later, Musk admitted that about 50% of Bitcoin mining was powered by renewable energy.

The bear market didn't last long despite China starting a major crackdown on local mining farms. The bullish trend returned by the end of July, with Bitcoin eventually surging to its still-unbroken all-time high of $68,000 posted in November 2021.

Bear market No. 5: Bitcoin plummets from $68,000 to below $20,000 in 2022

Time to retest previous high: to be determined

Bitcoin failed to break $70,000 and started dropping in late 2021. The cryptocurrency has slipped into a bear market since November last year, recording one of its biggest historical crashes in 2022.

In June, the cryptocurrency plunged below $20,000 for the first time since 2020, fueling extreme fear on the market. A Brief History of Bitcoin Crashes and Bear Markets: 2009–2022_4

A Brief History of Bitcoin Crashes and Bear Markets: 2009–2022_4

The ongoing bear market is largely attributed to the crisis of algorithmic stablecoins — namely the TerraUSD Classic (USTC) stablecoin — which are designed to support a stable 1:1 peg with the U.S. dollar through blockchain algorithms rather than equivalent cash reserves.

USTC, once a major algorithmic stablecoin, lost its dollar peg in May. The depegging of USTC triggered a massive panic over broader crypto markets as the stablecoin had managed to become the third-largest stablecoin in existence before collapsing.

The collapse of Terra caused a domino effect on the rest of the crypto market due to massive liquidations and uncertainty that fuelled a crisis in cryptocurrency lending. A number of global crypto lenders like Celsius had to suspend withdrawals due to their inability to maintain liquidity amid brutal market conditions.

Bitcoin has historically seen its price trade below previous highs for more than three years. The previous peak of $68,000 took place just seven months ago, and it's yet to be seen whether and when Bitcoin would return to new heights.

Source: cointelegraph

Risk Warnings and Disclaimers

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Owen Li

There is little sign that India will ease new windfall taxes on domestic oil production and fuel exports any time soon.

As a result, oil companies will be significantly affected and there will be ripple effects in the global market, analysts say.

India's government this month slapped a 23,250 rupee ($293) per tonne levy on local crude oil sales, in addition to imposing increases on petrol, diesel and aviation fuel exports, to take away the massive gains that Indian companies have been reaping from the rally in global crude oil prices.

The steps are aimed at shoring up domestic supplies and government revenue, as the South Asian country tries to keep its fiscal deficit under control. India is the world's third-biggest importer of oil, meeting 85 per cent of its requirements.

The windfall taxes "would hit the incomes, profits and profitability of some Indian companies", says Manoranjan Sharma, chief economist at New Delhi-based Infomerics Ratings.

"This measure would adversely impact global fuel supply to a limited extent," he adds, as fuel supplies around the world have already been squeezed by Russia's war in Ukraine.

Companies affected by the taxes include Reliance Industries, India's biggest fuel exporter, controlled by billionaire Mukesh Ambani, and state-run Oil and Natural Gas Corporation (ONGC), which produces crude domestically.

The impact has already been reflected in the companies' share prices. Since the move came into effect on July 1, Reliance's share price fell about 8 per cent to 2,391.40 rupees, while ONGC's stock price plunged 20 per cent to 121.50 rupees a share.

"The key downsides of these would be on the earnings of oil companies who earned premium in global markets on rising oil prices," says Niraj Bora, founder and director of Pune-based Surmount Business Advisors.

"For the economy as a whole, I think this will be good to contain inflation. One might disagree that level playing fields are disrupted by the government imposing such duties. However, these are unusual times and my view is that the overall benefits outweigh the losses.

"This is certainly a net positive decision, while oil companies take a bullet for the public."

When India's Finance Ministry announced the windfall taxes this month, it said such action was needed to ensure domestic supplies and ultimately keep prices in check for its population, as the country grapples with high inflation. Retail inflation stood at 7.04 per cent in May, above the central bank's upper threshold of 6 per cent.

"The refiners export these products at globally prevailing prices, which are very high," the ministry said. "As exports are becoming highly remunerative, it has been seen that certain refiners are drying out their pumps in the domestic market."

The ministry raised export duties by 6 rupees per litre on petrol and 13 rupees per litre on diesel.

The government's move is positive for the country, Mr. Sharma says.

"Given the high price differential, it is no wonder that private refiners were increasingly taking the export route rather than doing local sales," he says.

"These well-conceived measures would thus help to boost domestic supplies of petrol, check abnormal profits of a few firms, reduce sectoral arbitrage and the inherent asymmetry in the system."

India's introduction of windfall taxes is in line with steps being taken globally as oil prices have risen. In the nine months remaining of the current financial year, the measures could potentially raise 1.1 trillion rupees ($12.6bn), according to Japanese investment bank Nomura.

"The measures are positive for the centre's fiscal finances," says Sonal Varma, chief India economist at Nomura.

The government has set a fiscal deficit target of 6.4 per cent of the gross domestic product for the current financial year to the end of March, and the taxes aimed at avoiding exceeding this.

The Finance Ministry cut excise duty on petrol and diesel last month in an effort to cool prices in the domestic market, and new taxes will replace these losses in revenue to the government.

However, some analysts question whether the negative effects of the windfall export taxes on refiners will outweigh the potential benefits.

Analysts at Kotak Institutional Equities, Anil Sharma and Hemang Khanna, describe these duties as "irrational" and "ill-advised".

"Even as India has been deficit in domestic crude production, the successive governments have incentivised setting up of refining capacity to make India a refining hub," they explain in a research note.

Over the years, the refining industry had been given several tax incentives by central and state governments to boost output.

"Over the past two decades, this has led to India becoming a refining hub and an exporter of petroleum products. In our view, the imposition of taxes on exports of petroleum products goes against this historic policy of incentivising refining," the Kotak report says.

The government has said it will review these taxes every two weeks but this provides little clarity on for how long they will be in place.

"The indefinite period of the new taxes on petroleum products will create large uncertainty about government revenues and companies' earnings," analysts at Kotak wrote in a separate note.

There are downsides to the move but the Indian government is currently grappling with several economic challenges, which it is looking to alleviate with the new duties.

These include the slide in the rupee, which has plunged to a series of record lows against the U.S. dollar, fuelled by factors including the U.S. Federal Reserve raising interest rates and the outflow of funds from Indian markets amid liquidity tightening globally. High crude oil prices are also stressing India's current account deficit further.

Given that a wider current account deficit is linked to currency depreciation, the windfall taxes are aimed at stemming the rupee's plunge, says Sugandha Sachdeva, vice president of commodity and currency research at Religare Broking.

"Apart from the active intervention strategy by the RBI [Reserve Bank of India] in the forex markets, these are further steps taken by the government through duty hikes to ease the pressure on the current account deficit and slow down the pace of currency decline," she says.

India's current account deficit widened to 1.2 per cent of the GDP in the financial year to the end of March 2022, compared with a surplus of 0.9 per cent in the previous year. Official data released this month showed that the trade deficit reached a record high of $25.63 billion last month, partly driven by oil imports.

India's demand for costly oil imports is increasing as the economy has opened up after easing of Covid restrictions.

With the windfall taxes, "as there has been a shortage of fuel supplies for almost a month, the administration has taken a huge step to meet the rising domestic fuel demand and ensure an ample supply of petroleum products", says Ms Sachdeva.

"This will eventually decrease the import of oil at a time when oil prices are holding steady around multi-year highs, on the back of sanctions imposed by western countries on Russian oil."

On July 4, Reuters reported that India would remove its windfall tax for oil producers and refiners only if crude prices drop by $40 a barrel, citing India's Revenue Secretary Tarun Bajaj.

Other factors may come into play alongside international oil prices, including inflation and currency depreciation, in a decision to roll back the duties, says Infomerics Ratings' Mr. Sharma.

But as global turmoil continues, there is no certainty on when this might be.

"In the event of crude prices crashing because of a prolonged global slowdown, windfall gains will cease and there could conceivably be a rollback of these creative measures," Mr. Sharma says.

Source: The National News

Risk Warnings and Disclaimers

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Devin

Case in point, for those calling for an imminent recession, the fact US businesses added 372k jobs in June, after 384k in May, has some believing that if the US is indeed in the early throes of a truly protracted recession. However, we're not seeing much evidence of it just yet – at least in the hard data. The US payrolls report has seen US Treasury yields rising again and the Fed are all but assured of hiking by 75bp in the 27 July FOMC meeting, hell-bent on getting the fed funds rate to 3% by November at the latest.

The week that was brought out USD buyers, with EURUSD losing 2.2% last week to touch 1.0072 and everyone is asking when we get to parity. Interestingly, the daily candle on EURUSD (or the DXY) shows increased signs of fatigue and a bullish break above 1.0191 (Friday's high) holds the potential for 1.0279 – as the volatility matrix shows, above 1.0300 and the price moves into the breakeven territory on options vol strategies – so the prospect to sell rallies on the week into here looks compelling.

Daily chart of the EURUSD

(Source: TradingView – Past performance is not indicative of future performance.)

We watch US CPI as the core driver of risk this week – the form guide over the past 12 months suggests the risks of a beat to consensus expectations (8.8%) is high – For the quants out there, since August 2021 we have seen the NAS100 has fallen every time in the six hours after the CPI drops (except for January 2022) by an average of 0.7% – they say history doesn't repeat but it rhymes.

It, therefore, wouldn't surprise to see 8.9%, maybe even 9% and that should keep US bond yields headed higher, potentially providing the catalyst to push USDJPY through the consolidation range of 136.70. A strong CPI print would also guide the AUDUSD lower, although we have Aussie employment data this week that should only offer a momentary element of volatility (vol) to the AUD before the AUD reverts to being a proxy of global growth and sentiment. Chinese data is also a potential driver of copper and the AUD.

If bullish AUD, I'd be focusing away from the USD, where AUDCHF is a better bullish momentum trade, but it needs an upside break of 0.6700. While EURAUD has seen a decent fall although saw indecision in the price action on Friday and that needs to rectify itself.

Clearly, the shock comes from a weak CPI print – what's weak? I guess we can only say 'weak' relative to consensus, but a fall below 8.5% would see bond yields lower and risk a negative response in the USD – Conversely, crypto and gold find buyers and the NAS100 breaks out as we head into Q2 earnings season, with JPM the release to focus on this week.

The UK political situation makes fascinating viewing – maybe not from a market's perspective, with GBPUSD 1-week implied vol at the 57th percentile of the 12-month range. However, the events that shaped Boris Johnston's exit will long be remembered. We'll learn more about the candidates who will run for PM, and while we may see some traders targeting EURGBP as the political play, unless we see a greater risk of a snap general election or a far bigger fiscal stimulus than the market has as its base case then GBP should have limited political variance. It's hard to see how any of the candidates can turn this ship around anytime soon, although, they may be able to galvanise the Tory party, something that is certainly needed as we begrudgingly trundle towards what could be a miserable winter for the UK.

For FX traders we have central meetings from the RBNZ and BoC and you can see what's priced and expected below in the Interest rate matrix. 1-Week USDCAD and NZDUSD implied vols are higher than other G10 FX pairs but by no means at extremes – position sizing should be modest, but I have limited concerns holding positions over the meetings.

So, we have built a base for risk, but can it follow through? I guess we watch US real rates, the USD, and earnings – that should drive other markets.

Weekly Volatility Matrix – we look at the market's implied volatility for the week ahead and derive the expected move. Replicating the 'straddle' breakeven rate we can see where the market feels price could get to with a 68.2% and 95% level of confidence. Use for mean reversion purposes and risk exposure.x

(Source: Pepperstone – Past performance is not indicative of future performance.)

The week ahead calendar – I've cherry-picked what I believe to the marquee event risks of the week and shared some brief thoughts to help guide risk. A Trader's Week Ahead Playbook – Events that Should Move the Dial_3

A Trader's Week Ahead Playbook – Events that Should Move the Dial_3

(Source: Pepperstone – Past performance is not indicative of future performance.)

Interest rate matrix – Here we look at the interest rate and swaps pricing to see what is already discounted. This is dynamic but offers insights that help to know where the distribution of outcomes plays out. A Trader's Week Ahead Playbook – Events that Should Move the Dial_4

A Trader's Week Ahead Playbook – Events that Should Move the Dial_4

(Source: Pepperstone – Past performance is not indicative of future performance.)

Source: Pepperstone

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Owen Li

The global community is running towards a digital economy, and Sarawak does not want to lose out in this race. Thus, it has heightened its efforts to achieve its goal of becoming a digitalised state by 2030, guided by two blueprints: the Sarawak Digital Economy Strategy 2018-2022 and Post Covid-19 Development Strategy 2030.

Sarawak Premier Tan Sri Abang Johari Tun Openg is proud to share that the state government has achieved remarkable progress since the first International Digital Economy Conference Sarawak (IDECS) in 2017.

Some of the agencies that were formed to catalyse the state's digitalisation efforts are the Sarawak Multimedia Authority (SMA) and the Sarawak Digital Economy Corporation (SDEC). The state government has also established digital hubs in rural areas.

Abang Johari acknowledges that the youth is the most volatile community in this era due to the ever changing technology. Hence, training has become an essential part of Sarawak's digital economy strategy.

Several efforts that have been undertaken by the Centre of Technical Excellence (CENTEXS) were collaborations with industry partners such as Huawei to provide micro-credential courses, focusing on key digitalisation areas such as Web3 and hardware and software development.

Despite the achievements, Abang Johari does not deny that digitalising Sarawak has its challenges. "The real challenge that Sarawak faces is our terrain because the moment you have a hill [in an area], it will disrupt [connection] signals. A lot of investment has to be made for our infrastructure and we have spent our own money to do that, besides the assistance from the Malaysian Communications and Multimedia Commission (MCMC)," he says.

Abang Johari points out that the state is rarely highlighted and sometimes ignored by the world. "In order to solve that, we have to be on our own. We have to spearhead whatever policies we have."

IDECS 2022 was held using a hybrid mode on June 21 and 22 at the Borneo Convention Centre Kuching (BCCK). The prestigious event attracted more than 40,000 local and foreign attendees.

Drive for data

Throughout IDECS' five-year run, data has been highlighted as one of the greatest components to drive digitalisation. This year, the theme "Decoding Big Data for Environmental and Energy Sustainability" anchored the conference in the light of the environmental, social and governance (ESG) fundamentals that have become the state's priority.

Abang Johari asserts that Sarawak is focused on positioning itself as a data-driven state and emphasises the importance of fellow leaders tapping into it as well.

"It is our responsibility as leaders to continuously improve our products and services to our stakeholders. In order to improve products or service delivery, we must embrace the use of data analytics and build capable teams to turn big data into a competitive advantage," he says.

As a state blessed with an abundance of resources, the data collected can be turned into a means of revenue. For example, the geospatial and land data that the state has compiled can be monetised whenever it is requested locally and internationally. Additionally, the data can be adopted by local businesses and talents such as farmers to improve farming techniques to generate better yields in crop production.

Apart from data, IDECS 2022 also focused on sustainability and the adoption of renewable energy such as hydrogen and biofuel. Abang Johari had been invited to the World Hydrogen Summit in Rotterdam, the Netherlands, in May. He has confirmed that the Southeast Asian summit will be held in Kuching in the next couple of years.

As the pioneer of hydrogen production in Southeast Asia, Sarawak is looking to produce 100,000 tonnes of hydrogen by 2025 and export it to South Korea and Japan. While there are not many use cases of hydrogen in Malaysia, the state is taking a step further by exploring the production of alternative aviation fuels such as sustainable aviation fuel (SAF).

According to Abang Johari, the Petronas Resource Centre Bangi has done research on SAF. He affirms that the state is open to collaborating with Petroliam Nasional Bhd (Petronas) to produce biofuel.

While the price of hydrogen is a concern to some people, Abang Johari is optimistic that with greater acceptance, the price will come down over time. "I believe that in five to 10 years, the cost of producing hydrogen will be cheaper, but you must get the right water to produce green hydrogen as the quality of water is important. I think we are blessed with this one [quality water]," he says.

Sarawak is looking to invest in regenerative renewable and sustainable feedstock and algae biomass. It is also exploring the potential of geothermal repurposing of its depleted onshore oil and gas wells to generate power for its northern region. But this requires in-depth feasibility studies.

Source: Theedgemarkets

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Devin

Boris Johnson has left the Conservative party in policy la-la land. "Cakeism" has run riot – vast, incoherent ambitions detached from political, economic and business realities. Thus, the aim is to be "Global Britain" but an ultra-hard Brexit ensures shrinking exports, falling inward investment, dwindling financial muscle and inevitably global retreat.

Britain is to be a high-wage, high-innovation economy but there is only one hi-tech company in the FTSE 100, and no strategy to add any more. We are to be a science superpower but there is little chance when we are excluded from the biggest transnational scientific organisation on earth – the EU Horizon programme. There are targets to level up Britain's glaring geographical inequalities but with scant resources – with what little there is directed at Tory constituencies.

As the cost-of-living crisis intensifies, the government consistently offers too little, too late. A mid-ranking European power must collaborate with others to have leverage over any significant policy area: instead, rancour, rows and delusions of a capacity to go it alone dominate. There are commitments to fiscal responsibility while simultaneously advocating more spending and lower taxes. It is an intellectual black hole.

The incoming PM's problems start with the legacy of Johnson's Brexit – the unchallenged, sacred verity of Conservative politics. But this allegedly "oven-ready" deal paid no attention to the realities of the 21st-century economy, now dominated by products and services that compete on their knowledge content, resilience and compliance with the highest regulatory standards. To exclude ourselves from the EU single market, which sets the standards for the whole of the EU, is thus a ball and chain around Britain's growth potential – and by menacing our exports worsens the deficit in our current balance of payments so that a sterling crisis is an ever-present risk.

Importantly, the attempt to shoehorn Northern Ireland back into the UK market and suspend its relationship with the EU by unilaterally rewriting the NI protocol had led to no new contracts being awarded in the EU Horizon programme, and to existing ones being cancelled. It is a self-defeating debacle.

Beyond that, Johnson was an opportunistic policy jackdaw – backing whatever seemed attractive to whatever audience but with no sense of how it was to be delivered or financed, or how it fitted with a larger vision. Levelling up was his commitment to the former Labour "red wall" seats in the Midlands and north which turned Tory in the 2019 general election. They deserved better, he rightly insisted, from life expectancy and public transport to career prospects: but how?

The levelling up white paper set 12 interlinked economic, social and political priorities – but their achievement demands a mobilisation of resources, strengthened institutions and serious devolution. Johnson, obsessed with favouring only Brexit Tories and their constituencies, could deliver none of it. Above all, no serious creative thought had been given to how the UK could find the billions necessary, over many years, to fund levelling up. In the event, the HS2 link from Birmingham to Leeds was cancelled. The entire strategy needs urgent attention if it is not to collapse.

Yet in principle it should be a national priority. So should developing lifelong learning, placing big bets on innovative projects, renewing our infrastructure, confronting digital monopolies, securing energy resilience consistent with lowering carbon emissions, and offering a national social care system for our elderly.

To none of these challenges did Johnson give sustained attention. Is the health and social care levy even going to survive, let alone deliver what was promised? Energy policy in the wake of the crisis in prices after the Ukraine war is a particular jumble; grandiloquent impossible ambitions to build eight new nuclear power stations in the decade ahead sit alongside drawing back from commitments to renewables. Any chance of meeting net zero commitments by 2050 (and capping energy bills) means insulating a million homes a year: the figure runs at a derisory 30-40,000, with no commitment to improvement.

Looming in the background – and undermining all of it – is the commitment to a smaller state and lower taxes. Rarely has any government or any party faced in so many contradictory directions at once, with so little chance of achieving any of its goals. Exit Johnson – leaving behind a mess for others to clear up.