Bitcoin ETF Competition Heats Up as Crypto Trust Eyes Conversion

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04 March 2021

Video commentary for March 3rd 2021

Eoin Treacy’s view

A link to today’s video commentary is posted in the Subscriber’s Area. 

Some of the topics discussed include: Bond yields continue to trend higher, stock markets beginning to feel the effects, oil and banks steady, gold weak, bitcoin steady. 

Sunak Offers U.K. Companies Way to Cut Tax Bill in Next 2 Years

This note from Bloomberg may be of interest to subscribers. Here is a section:

Chancellor of the Exchequer Rishi Sunak says the U.K. will introduce a new “super deduction” to reduce tax bills for investments in the next two years.

Sunak speaks in Parliament: “For the next two years, when companies invest, they can reduce their tax bill, not just by a proportion of the cost of that investment, as they do now or even by 100% of the cost, the so-called full expensing some have called for. With the Super Deduction they can now reduce their tax bill by 130% of the cost”

Sunak gives example: “Under the existing rules, a construction firm buying £10m of new equipment could reduce their taxable income, in the year they invest, by £2.6m. With the Super Deduction, they can now reduce it by £13 million”

Eoin Treacy’s view

This measure is designed to motivate companies to invest in new plant and machinery. It will create a significant boost to consumption over the next year by pulling forward any such investment from the future. It’s one of a range of measures in today’s budget aimed at promoting economic growth even as the government look at what will be required to deal with the massive rise in debt resulting from the pandemic.

Gold ETF Exodus Quickens in Ominous Sign for Faltering Metal

This article by Yvonne Yue Li and Eddie Spence for Bloomberg may be of interest to subscribers. Here is a section: 

Gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs,” Carsten Fritsch, an analyst at , said in a note. “A shift in sentiment among investors would be needed for gold to free itself from its extremely difficult predicament.”

Federal Reserve officials slated to speak this week may give more insight into the economic outlook and how the central bank might respond to the recent tumult in bond markets. Higher yields dim the appeal of the non-interest-bearing metal.

“Gold remains vulnerable to a further tightening from real rates,” TD Securities analysts led by Bart…