Daily Market Update - June 16, 2020 Steven Roach warns: Dollar Collapse Imminent

$BTC 24 Hour High $9,504.86 $BTC 24 Hour Low $8,990.18 $BTC +0.64%

CME’s BTC options are seeing 10x growth over the past month, currently holding around 20% market share in the options space when measured by open interest.

$BTC future volumes nearly triples to ~17B overnight that saw 62M long and 31M short contracts liquidated during the volatility. Aggregated open interest across the top exchanges remains at ~3.5B.

Legacy Market Lunacy

US benchmark indices move up +2% after US FED announces plans to purchase more corporate bonds under its Secondary Market Corporate Credit Facility.

Billionaire Leon Cooperman warned that the rush of retail investors on Robinhood App would "end in tears". Cooperman pointed out the rush of purchases of bankrupt Hertz Global HTZ,-1.60%. “The gambling casinos are closed and the [Federal Reserve] is promising you free money for the next two years, so let them speculate,” Cooperman said, referring to the central bank’s balance sheet which has ballooned to $7.2 trillion from about $4 trillion at the beginning of March, as it rolls out stimulus measures to limit the damage from the pandemic. The Fed also has held interest rates at a range between 0% and 0.25% and is expected to keep rates around those superlow levels until at least 2022.

“Let them buy and trade. From my experience, this kind of stuff will end in tears,” Cooperman told CNBC.

Dollar Doomed

Stephen Roach, Yale University senior fellow and former Morgan Stanley Asia chairman, has a warning for U.S. dollar bulls. The prominent economist says that the era of the U.S. buck may be coming to an end and is forecasting a 35% decline soon in the U.S. currency against its major rivals, citing increases in the nation’s deficit and dwindling savings.

The lecturer said during CNBC’s “Trading Nation” on Monday that the rise of China and the decoupling of the U.S. from its trade partners is setting the stage for a dramatic weakening of the U.S. currency in the next few years that is likely to end the supremacy of the monetary unit as the world’s reserve currency.

“The dollar is going to fall very, very sharply,” he told the business network. Roach’s comments follow similarly themed op-ed that he wrote in Bloomberg last week, in which he specifically declared that the “era of the U.S. dollar’s ‘exorbitant privilege’ as the world’s primary reserve currency is coming to an end.

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