Uncertainty around interest rates, US government debt, geopolitical tension in Europe and the Middle East, and fears of a global economic slowdown have triggered a surge in the prices of assets such as Bitcoin and gold.

Bitcoin is back trading around $US77,000, up nearly 30 per cent in the past eight weeks. Bitcoin has just had its best week in two years.

Gold, on the back of rising bond yields in the US, finished the weekend at close to $US4,700 an ounce. It is up 25 per cent since last month with some analysts saying it has further to go.

Oil continues to climb, with Brent now above $US95 a barrel. The US, Israel and Iran seem no closer to finding a lasting peace in the region.

The rise of non-equity assets has been going on for a few weeks but got supercharged last week when the US Treasury Department announced plans to increase its buyback of long-term debt. On the same day, Donald Trump, who last year made $US1.2 billion from various crypto holdings, urged Congress to move quickly on crypto-friendly legislation.

There are a bunch of reasons for the rise, but at the heart of them is fear of inflation and what that means for interest rates and debt levels, and how that will impact equity returns.

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Greed-o-meter

One streaming subscription doesn't look like much. Nine of them certainly do. Sign up to nine of Australia's major streaming services and you're looking at almost $148 a month - or about $1,500 a year, even using cheaper annual plans where they're available.

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Fear & Greed Q+A today

On the week ahead for the economy, including household spending, capex figures, and the monthly inflation report:

 

“It should be trending lower, because we've got a very high number from July last year dropping out of the year-on-year run rate. So the current market thought process is that we get a monthly increase in the CPI of around about 0.5 per cent. Some of the petrol prices were increasing, and there's a couple of other items that in the month of July, first of July, the beginning of the financial year, a lot of companies just sort of tweak their prices up a little bit in normal circumstances.

 

So we're probably going to see a 0.5, but because of that run rate on the annual figure, it should step down to about 3.5 per cent, maybe 3.4 per cent. So inflation still above target, but there'll be a hint of encouragement that perhaps it's stepping back towards the target anyway.”

News in brief

The financial crimes agency has referred hundreds of mortgage brokers, lawyers, accountants and risky companies to police, tax officials and the corporate regulator, warning lenders of significant risks to the banking system from home loans it suspects have been fraudulently obtained.

Suncorp has used data about ancestry and religion and even how likely customers are to eat yoghurt to decide how much policyholders should pay for their home and car insurance.

Aldi is reducing the number of products it offers and is cutting back its middle aisle special buys, in an attempt to improve profits, as Woolworths and Coles continue to pick up market share.

The US and Canada are in a trade war, after talks between the one-time friends broke down over the weekend, and Washington imposed 50 per cent tariffs on Canadian goods, and Ottawa announced retaliatory imposts on US dairy, farm equipment, appliances and steel.

A robot has outperformed humans by running faster than Usain Bolt's 100m sprint world record at the World Humanoid Robot Games in China. The humanoid robot, developed by the Beijing Innovation Centre of Humanoid Robotics, ran the distance in 9.39 seconds at the event. Check out the video from the BBC.

Fear-o-meter

Matthew Sigel, Head of Digital Assets Research at VanEck

"Bitcoin could reach US$100,000 in 2027, and if the cycle continues to play out, we could even see it reach as high as US$500,000 by 2029, with a lot of volatility along the way.

"In the last 3 months, all 12 of our Bitcoin capitulation signals have fired, making this a good time to be buying Bitcoin.

"This price reaction isn’t about the US CLARITY Act, which many in the market are pointing to. This is about what the US Treasury has done, which is reigniting fears of fiscal dominance.

"The Treasury’s own advisory committee recommends T-Bills at around 15 to 20 per cent of marketable debt. We are at 23 per cent and going higher. As the Treasury finances more of that debt on the short end it hits the fiscal balance immediately and makes keeping rates high increasingly expensive. What the market is telling us is that the US dollar is absorbing that pressure.

"For the last 15 years the only persistent correlation that Bitcoin has shown is a -1 correlation with the dollar. We think this ultimately means lower real rates and a structurally weaker dollar with Bitcoin as one of the best hedges investors can find on that dynamic."

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