On August 12, iM Securities analyzed that the recent rally in New York tech stocks and Bitcoin was driven by the so-called "three lows" phenomenon?low interest rates, low oil prices, and a weak dollar?along with a strengthened risk appetite among investors.
Park Sanghyun, a researcher at iM Securities, stated, "The upward trend in the Nasdaq index and cryptocurrency prices has intensified since the employment shock in early August," adding, "In contrast, gold has risen only slightly, while oil prices have plummeted."
The backdrop for the cryptocurrency rally includes the U.S. Securities and Exchange Commission (SEC) easing regulations on Ethereum, as well as news that Harvard Management Company (HMC) has invested approximately $116 million in a Bitcoin ETF. In addition, following last month's employment shock, expectations for a Federal Reserve rate cut in September and the possibility of further cuts within the year have grown, further strengthening the preference for risk assets. The announcement of a U.S.-Russia summit is also analyzed to have stimulated global capital inflows.
iM Securities explained that the "three lows"?low interest rates, low oil prices, and a weak dollar?are supporting the rally in risk asset markets. Looking ahead, the company forecasts that if a rate cut occurs in September, with additional cuts possible within the year, and if there is progress in negotiations to end the Russia-Ukraine war, the upward trend in risk asset prices is likely to continue for some time.
Researcher Park Sanghyun stated, "Ultimately, if the Fed cuts rates in September, expectations for additional cuts by the end of the year strengthen, and negotiations to end the Russia-Ukraine war make progress, these factors will serve as additional drivers for a continued rally in risk asset prices in the near term."
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