The ASX will likely edge up in this morning’s trading, with ASX futures up 0.1% or 9 points over night.
Today the NAB will release its consumer sentiment data, which will give some insight into how Australians are coping with the current economic climate and which way the market (and the RBA) is likely to go in the coming weeks.
European markets were mostly closed over the Easter long weekend, with the FTSE 300 rising by 0.5% or 8.75 points and the UK FTSE 100 index climbing 1.0% or 78.6 points before close on Thursday.
American markets were mixed as strong job data weighed on investor’s minds, with the Dow rising 0.3% or 101 points, the S&P500 gaining 0.1% and the Nasdaq shedding 4 points or less than 0.1%.
Major currencies were weaker against the dollar overnight:
Euro fell from US$1.0915 to US$1.0830 and was near US$1.0860 at close
Aussie fell from US66.80 cents to US66.20 cents and was near US66.40 cents
The Japanese yen slid from 132 yen per US dollar to JPY133.85 and was near JPY133.60 at the US close.
Global oil prices also slipped despite a strong run last week, pushed down by a stronger US dollar and the fear of more rate hikes in America – traders are anticipating several important data releases this week; US inflation data on Wednesday, monthly reports from OPEC on Thursday and the International Energy Agency on Friday.
Brent crude slipped 1.1% or US$0.94 to US$84.18 a barrel.
US Nymex crude oil fell by US$0.96 cents or 1.2% to US$79.74 a barrel.
Central Bank Digital Currency transactions likely to surge
As the RBA considers creating its own Central Bank Digital Currency (CBDC), the use of the wholly digital and blockchain-based currencies is expected to increase exponentially by 2030.
Analysis by BanklessTimes.com has forecast CBDCs to reach a transaction value of $200 billion in that time from a market value of just $100 million this year.
CBDCs are a bank-issued alternative to cryptocurrencies, using the same blockchain technology for authentication and transfers but backed by a bricks-and-mortar central bank.
The RBA has pointed to advantages in safeguarding public trust in money and promoting efficiency, safety, resilience as well as innovation in payment systems and financial market infrastructures as points in favour of an Australian CBDC.
Several countries – including China, India and Hong Kong – have launched pilot programs for CBDCs, which are thus far in their infancy but appear to be gaining momentum.
“CBDCs have the potential to revolutionise how people and businesses transact,” BanklessTimes CEO Jonathan Merry said.
“The growth of CBDCs is a direct response to changing consumer preferences and increasing demand for digital payments.
“As more people across the world become comfortable using digital payment systems, CBDCs are likely to become more popular.
“We anticipate that their use will snowball over the coming years, driven by factors such as improved efficiency and cost savings.”
The RBA’s head of payments policy, Tony Richards, said that a strong regulatory framework for stablecoins could lead to an issuance by highly rated entities and central banks could move toward issuing CBDCs.
“There is considerable focus globally on CBDCs, with surveys from the Bank for International Settlements indicating that essentially all central banks are doing work in this area,” Richards said in an address to the Australian Corporate Treasury Association in 2021.
It seems the RBA is not as certain about CBDCs as other banks, however.
“Reserve Bank staff have also not been convinced to date that a strong policy case has emerged in Australia for a CBDC,” Richards said.
“The primary reason has been that Australia's existing electronic payments system already provides households and businesses with a wide range of safe, convenient and low-cost payment services.
“More broadly, much (if not all) of the innovation and new functionality that could potentially be enabled by a CBDC could in principle also be enabled by innovation based around commercial bank deposit accounts, e-money or stablecoins.”
The RBA’s research is still ongoing, with three research programs led by the Digital Finance Cooperative Research Centre, Australian banks, law firms, investment companies and blockchain solution companies underway or recently completed.