Between filing your tax returns and working with your business bookkeeper to tidy up the financial year, there might not be a lot of time to see what else is happening globally in the financial department. That’s why we’ve put together some of the big financial headlines for you for this month. We’ll look at scandal abroad, check in with Brexit, and review global currencies, among a few other things. Let’s review.
New global top dog
Step aside global tech companies, Facebook and banking sectors, the new financial top dog is Saudi Aramco, a Saudi Arabian oil giant. The company made almost double in profits than the other giant in the finance world, Apple. While this oil company is literally on top of of the financial world right now, it will be interesting to watch its profits in the next decade. As many countries become less and less oil dependent, we are interested to see how oil moguls will adapt.
Surge in cryptocurrencies
This is an interesting piece of news, considering that most cryptocurrencies worth fell extremely hard over the last couple of years. Despite the dramatic decline over the years, early April showed a sudden surge, with Bitcoin jumping up 20 percent. The source of this surge was linked back to a single order of $100 million USD in Bitcoin, which is still a mystery as to who ordered it and why.
The reason why this is interesting is because many financial investors and economists predicted that Bitcoin would eventually dwindle to being worth nothing. Yet, here is a pretty massive surge in its worth, and seemingly random. Only time will tell if this short surge makes any longer term impact on the currency, or if you need to change up your tax planning for your Bitcoin investment!
Bitcoin has been one of the most famous and highest valued cryptocurrency since its beginnings in 2008. Bitcoin did away with a trusted central authority, or basically someone to watch over all the currency to make sure it wasn’t being spent multiple times, and simply used a peer to peer system instead, using the network to verify payments. If you want to learn more about this, click here for a very simplified guide.
The drama in the United Kingdom over the way Brexit will take place continues to unfold, and continues to affect global economies. The latest news surrounds a possible move for a second Scottish referendum to leave the United Kingdom, therefore staying with the EU. Theresa May continues to struggle holding her power, and there is talk of another vote of no confidence. Her last survival of a vote of no confidence was a slim win, and if hit with another one, she may struggle to survive again.
Currently, the United Kingdom has until 30 June 2019 to agree on a Brexit deal. In the meantime, the UK faces quite a bit of economic uncertainty, and will likely continue even after this date. What this means for the global economy is continued uncertainty on what global trade will look like, post Brexit. Currently, the UK and the EU’s trade are tightly linked, and depend on each other quite a bit. Once these ties are officially broken, the UK will be able to make deals with the rest of the world, outside of the EU’s rules. This is one very big reason why the UK has voted to leave the EU, as it could be quite beneficial to them to negotiate on their own with the giant economies of the world. Only time will tell if this is a positive over the long run, however.
In global currency news, there has been a lot of news on Australia’s falling dollar prices. In January of this year, the dollar hit a ten year low. Some have guessed that this is due to a failing economy, and that Australia is due for an economic recession. The income rates in Australia aren’t matching inflation closely enough, which is causing Aussies to keep a tight grip on their wallets. Other economists say that Australia’s exports to China are causing the dollar to drop, as China suffers economic growth problems of its own. Australia’s dollar is something we watch closely in New Zealand, as its growth or falls often affects our own dollar, and in turn can affect things like our mortgage insurance prices, goods, and interest rates
The US dollar on the other hand is doing quite well. With interest raised back in 2015, the value of the USD went up, along with limiting the supply. This article makes an interesting point that the US dollar rises automatically when the Euro falls, which means that during all of the back and forth with Brexit, the US dollar has been reaping the benefits and rising. This means that it’s a great time for US citizens to get that business travel insurance and head over to Europe, before it changes.
Housing prices in New Zealand
Back home, we’re still seeing housing prices slowly but surely drop, which is most encouraging. Most of the drop has been seen in Auckland, where the housing crisis hit hardest in New Zealand. This is the fourth month in a row that we’ve seen falling prices, which is encouraging for prospective home buyers, but less so for those who’ve just purchased. It also potentially shows that the government’s recent legislation changes for restricting foreign buying may be having an effect.
Scandal in Malaysia
Because we can’t go for too long without a juicy scandal story, we’ve saved this for last. Najib Razak, the former Prime Minister of Malaysia has finally gone on trial for some pretty shocking accusations. The charges, which Razak has pleaded not guilty to, claim that he pocketed up to $681 million dollars from the sovereign fund, which went to funding his own expenses. These expenses are claimed to be anything from a 250 million dollar yacht, to funding a film, to priceless artwork. Ironically, Malaysian officials found him not guilty of previous suspicious financial activity a few years back. Now, if he’s found guilty, Razak could be looking at decades, if not longer, in prison.