Month: April 2017

Business, Country, Ecommerce

Cold Hard Cash Facts …interesting facts about currency!

Cold Hard Cash Facts

…interesting facts about currency!

As the financial world has been in such flux and turmoil over the last several weeks, we thought we would try something different with this article.

Every day most people who work within the financial markets or with foreign currency need to remain focused on the vast amounts of information and data that must be processed to properly manage their portfolios and protect their profits.

We thought you might enjoy a few facts (25 to be exact) about currency.  Who doesn’t like to keep a few trivial facts in their back pocket for light-hearted cocktail hour discussions?

Believe it…or not!

  • There is currently an estimated total of approximately $75 TRILLION Dollars (U.S.) in the entire world. If this amount was distributed equally amongst all the people on Earth, each person would have less than $11,000 (U.S.) totaled!
  • If you donate blood, most of it is sold on the open market and it generates $4.5 BILLION Dollars (U.S.) annually.
  • McDonald’s as a corporation generates approximately $75 MILLION Dollars (U.S.)
  • Apple Inc. earns approximately $300,000 Dollars (U.S.)…per minute.
  • Of the twenty richest women in the world, all of them inherited their wealth from either their husband or their father….except one of them.
  • Americans spent more than $61.4 BILLION Dollars (U.S.) on their pets in 2012.
  • Former Drug Lord Pablo Escobar had so much cash on hand, that while trying to “stash” it, he would lose an estimated $1 BILLION Dollars (U.S.) each year to rats that ate it!
  • If Bill Gates spent $1,000,000 a day, it would take him 218 years to spend all of his money.
  • Sea Shells were once commonly used as currency in many parts of the world.
  • Paper currency can transport the live flu virus for over two weeks while in circulation.
  • Two out of three inherited family fortunes are lost by the new family generation.
  • Americans spend more money on pets annually than Germany spends on its entire defense budget.
  • The total amount of money owed (debt) by every single person and country in the world today totals $199 TRILLION Dollars (U.S.)
  • The wealthiest families in Florence Italy today….are the same families as 600 years ago.
  • Under Federal Law, only deceased people can appear on U.S. currency.
  • The first recorded Bitcoin transaction was to buy a pizza for 10,000 Bitcoins…which later was revalued at over $12 MILLION Dollars (U.S.)
  • $1.5 TRILLION Dollars (U.S.) are paid in bribes worldwide every year, according to a World Bank Estimate.
  • In the 1980’s, the financial sector claimed just 10% of U.S corporate profits. By 2010, it was 30%…supplanting manufacturing as the biggest profit center in the economy.
  • In 2015, a Chinese billionaire purchased a painting for $170 MILLION (U.S.) with his credit card so he could use the points for free airfare.
  • In 2015, Apple Inc. was worth more than Switzerland, Sweden or Nigeria.
  • Two-thirds of all U.S. $100 bills are held outside the United States.
  • Americans throw away $62 MILLION Dollars (U.S.) worth of coins every year.
  • London’s after-hours economy generates $32.3 BILLION Dollars (U.S.) every year.
  • A U.S. one-cent penny costs 2.4 cents to manufacture.
  • China began using paper money more than 1,000 years ago. Marco Polo wrote about it during his expeditions.

Now that we have provided you with enough currency trivia to impress your friends, give us a chance at MosaicaFX to protect your profits!  We are looking forward to discuss your currency management needs at your convenience.

 

Business, Ecommerce, Economy

A Second French Revolution?

A Second French Revolution?

We decided to let the dust settle from the Sunday first round of French elections before we tried to ascertain a fixed bearing to address from this outcome.   Needless to say, the results of the election almost create more questions than they answered.

The good news is that the “market horror,” scenario of a Le Pen vs. Melenchon run-off has been avoided.  The not-so-good news is that the poll differences between the top two finishers, was smaller than the anticipated margins of error.  This fact coupled with the combined percentage totals of the losing candidates most likely means that neither of the top two finishers may command a populist majority during the runoff.

While the polls  showed that that Centrist Macron and Right-Wing Le Pen qualified for the second round of voting to be held on Sunday May 7th, these same polls are now predicting that the likely winner (if the election were held today) would be pro-European Union centrist Emmanuel Macron…resulting in him becoming the new French President.

What Can We Expect if Macron Wins?

As previously stated, it appears as though Mr. Macron currently has the inside track to be the next French President.  If this were to happen how can we expect the financial markets to react to such news?  If the current financial markets reaction to him making the May runoff is any indication, relief may be the key word.

If Macron becomes the next Chief Executive of France it would be expected that concerns regarding France leaving the EU would greatly ease.  Mr. Macron is a huge fan of the EU and the Euro currency.  In fact, European shares surged to a 17-month high after Emmanuel Macron advanced as the favorite in the runoff over his nationalist opponent.  After opening to the best gains on record, the Euro scaled back as the week has advanced.

Macron, a committed globalist was the leading candidate as confirmed by a “snap” Ipsos survey late Sunday after the polls closed.  The survey suggested he would win with 62 percent of the vote to Le Pen’s 38 percent.  It is expected that macron would not only help to stabilize the European Union, but would also help integrate stronger support mechanisms…according to Azad Zangana, Senior Economist for Europe at Schroders Plc in London.

Mr. Zangana went on to say, “The contest is not over yet, but investors are likely to take comfort and to begin to think about the more attractive valuations that European equities offer.”

…And if Le Pen Wins?

At this point, most traditional survey houses have Le Pen losing in a runoff against Macron.  This may be wishful thinking.  With many unanswered questions in Macron’s background and the recent new terror attack in France leading up to the election, Le Pen’s supporters have been invigorated.

As for the effect that a Le Pen Presidency would have on the markets, most economists believe it would roil the currency and financial markets… at least in the immediate aftermath of her election.  Le Pen is the French version of Trump.  She wants to remove France from the EU, clamp down on immigration and support French labor organizations.  Many see a vote for Le Pen as a form of “revolution,” when it comes to the current globalist view of the French government.

She is also someone who does not mince words when it comes to terrorism and the influx of radicals who see France as a country that can easily be over run.  Le Pen has openly called for a much more aggressive law enforcement and military response to terror attacks and internal security for France.

The Smart Money…

At this point, a lot can happen between now and the May 7th runoff.  Macron may be polling higher, but many attribute that to the entrenched, elitist views of the “old guard,” that supports a more globalist view of France…who happen to also control many of the polling organizations who are publishing those surveys.

Le Pen is no “shrinking violet,” and is more than able to go toe-to-toe with Macron in the very public ongoing policy debates they have been embroiled in.  Macron is not without his own baggage as many believe he helped orchestrate much of the economic turmoil France has struggled with over the past several years.  If not him directly… he shares many of the common public and financial policies that contributed to high unemployment and a weakened economy.

As Le Pen will undoubtedly highlight these past associations with Macron, it is possible that the polls could be wrong.  As we saw with the last U.S. Presidential election….survey’s and polls are not infallible.  However, it will most likely come down to how effective Le Pen can make the case that she is the best suited to keep France safe from future terrorist attacks.  If Macron can successfully make a similar argument then he will most likely win the runoff.

The smart money says…the election is Mr. Macron’s to lose.

 

 

Business, Ecommerce, Economy

Brexit – Post Article 50 Update

Brexit – Post Article 50 Update

The Institute of Export & International Trade (IOE&IT) is recommending to exporters that now more than ever, they remain vigilant with regards to the ongoing Brexit negotiations so they can take precautionary steps to protect their profits and business positions.

Some of the key issues for international business that the current Brexit negotiations will no doubt take into account are as follows:

  • The unpredictability and complexity of future trade negotiations
  • The EU member countries individual agendas
  • Life outside the Single Market Model
  • The viability of free trade agreements
  • Preparation for future increased tariffs and trade barriers

The IOE&IT is focused on increasing the UK’s export performance by increasing the professional business standards in international trade management and practice that will allow the UK to continue to expand its export business post-EU Membership.  Arne Mielken, President of the IOE&IT states, “…EU law will automatically cease to apply in a maximum of two years, unless it is unanimously decided by the UK and EU to extend this period.”

Mielken went on to say, “…There is little time for governments to work on a withdrawal agreement and much more to agree on than trade.  While the UK hopes to secure a bespoke deal for generous access to the EU Single Market through a Free Trade Agreement (FTA), that outcome is far from certain.  Crucially, the EU Council, European Parliament with its veto powers and the 27 Member States (and possibly some regional parliaments) each with different interests must also agree to any future deal.”

Future Trade Agreements…

It has been noted that the complexity of navigating these hereto uncharted waters, could in fact derail future trade agreements due to the additional issues that will need to be discussed.

To that point, Mielken voiced the following concern, “…This means that trading with EU countries could become more complicated and international trade agreements and customs and border arrangements will have to be revised carefully to factor in the UK’s exclusion.  This rethink will take in its entire trade and customs policies, including everyday essential global trade matters.  It will affect the quota, tariff, valuation, origin and supply chain security of every company trading with us (UK).”

When you add in the imposition of duties and non-tariff trade barriers like licenses and certificates the result could be well established supply chains could be displaced….especially in areas of high regulatory control.

The IOE&IT President concluded his remarks by stating, “…I fear that an EU/UK FTA is not the solution for frictionless trade that most UK businesses are asking for.  Crucially, as a free trade deal is a contract between two nations, it can never be as ambitious as sharing a free and open single market.  Free trade may mean a duty reduction, but it will require the development and passage of massive administrative infrastructure, documentation and certificates.”

For the aforementioned reasons, it is expected that the only certainty is uncertainty; the IOE&IT are advising exporters and importers to add trade delays and disruption contingencies to their future trade agreements.

Currency Questions…

As the future for post-EU membership for the UK is uncertain….so it is for the EU in general.  It is for this reason that it is expected that the GBP, Sterling, Euro and U.S. Dollar are all destined for volatility over the next several months and possibly years.

It is imperative that from this moment on if your business relies on any of the aforementioned currencies, you must keep an even closer eye on the Brexit negotiations now that Article 50 has been enacted.

MosaicaFX has identified that the momentum of uncertainty that was launched with the Brexit vote has been compounded now with the Article 50 negotiations taking place.  We will be providing regular updates on this situation for the foreseeable future.  If you need additional information or guidance from a reliable source, feel free to contact us at your convenience to discuss how best to position your company to protect its profits.

Remember, a post-UK membership is not truly about how it will impact your currency trading decisions now or in the next 90 days.  The true impact on your business will be long-term and possibly not known for years.  Now is the time to lay the groundwork for your future in dealing with UK currency!

Business, Country, Ecommerce, Uncategorized

Risk Premia SPIKES… French Fried Markets!

Risk Premia SPIKES…

French Fried Markets!

The first round of French elections is just days away and the long-time establishment pollsters are beside themselves with derision.  They have never witnessed such close polling between candidates this late in the process.

Sharing these concerns over the lack of a more pronounced separation of candidates, it appears investors in stocks; bonds and currency (FX) are also perplexed as to what the outcome of this election will hold for the markets.

Case in point, investor hedges and risk premia are at (or near) record highs across the board for these markets.  One only needs to reflect upon the growing market anxiety to see just what importance this week’s election holds.

Round One…

Sunday will mark the first round of voting for France’s national elections.  It can be said that France’s pre-election polling is as roiled and confused as our polling in the recent U.S. Presidential election.  To wit, every poll for the past month has indicated that Independent Emmanuel Macron and the National Front’s Marine Le Pen are in control of the top two spots.

Similar polling seems to indicate that Macron would win a May 7th runoff.  However, both of the two front-runners have been steadily slipping over the past couple of weeks.  This has allowed Republican Francois Fillon and Communist-backed Jean-Luc Melenchon to climb within striking distance of the two leading candidates.

As Managing Director of Kantar Public France, Emmanuel Riviere has stated, “…This situation is totally unprecedented.  The fact that there are four potential finalists makes the situation very complex.”   In fact, one of the most concerning points for pollsters is the large level of indecision still apparent among most French voters.

Risk/Reversals

One of the reasons that may explain the record high hedges in EURO/USD is due to the uncertainty evident in the electorate.  This uncertainty and volatility is significantly greater than during elections just five years ago.

Equity investors have never been so hedged against a downside and bond investors have dumped OAT’s as aggressively as they could.  The direct impact that this uncertainty has created has caught even experienced investors off guard.

BofA has noted that their European Strategists are forecasting stocks in the region to rally in the event of a Macron or Fillon win and to possibly fall (in the short term) by as much as 13-23% if Le Pen wins due to a higher risk of France leaving the currency union/ EU.  They view financials and other peripherals as more vulnerable to a Le Pen victory although Labor and nationally supported portfolios may actually strengthen.

It is expected that if by some small chance Communist-backed Jean-Luc Melenchon were to win (or even make it to the May runoff) all bets are off with regards to what the markets may do.  Such a message his win would send would have potentially dire ramifications across many financial fronts.

The Markets are FRIED…

MosaicaFX has recommended that currency investors meet with their currency management teams to explore what options are available to help protect profits.  It may be that the aggressive and even record-setting hedging that is taking place in France due to the looming elections should be studied analytically for future guidance in situations such as these.

We are seeing such hedging being implemented in other markets regarding other currencies traded against the U.S. dollar.  Feel free to contact one of our MosaicaFX Account Managers to discuss the impact of the national election being held in mere days for France.

Due to the fact that all four of the leading candidates will no doubt impact a wide swath of the markets no matter who wins, it is expected that preparation within the next 48 hours may offset the turmoil that may result from Sunday’s election outcomes.

 

 

Business, Ecommerce, Economy

Cold Hard Cash Facts …interesting facts about currency!

Cold Hard Cash Facts

…interesting facts about currency!

As the financial world has been in such flux and turmoil over the last several weeks, we thought we would try something different with this article.

Every day most people who work within the financial markets or with foreign currency need to remain focused on the vast amounts of information and data that must be processed to properly manage their portfolios and protect their profits.

We thought you might enjoy a few facts (25 to be exact) about currency.  Who doesn’t like to keep a few trivial facts in their back pocket for light-hearted cocktail hour discussions?

Believe it…or not!

  • There is currently an estimated total of approximately $75 TRILLION Dollars (U.S.) in the entire world. If this amount was distributed equally amongst all the people on Earth, each person would have less than $11,000 (U.S.) totaled!
  • If you donate blood, most of it is sold on the open market and it generates $4.5 BILLION Dollars (U.S.) annually.
  • McDonald’s as a corporation generates approximately $75 MILLION Dollars (U.S.)
  • Apple Inc. earns approximately $300,000 Dollars (U.S.)…per minute.
  • Of the twenty richest women in the world, all of them inherited their wealth from either their husband or their father….except one of them.
  • Americans spent more than $61.4 BILLION Dollars (U.S.) on their pets in 2012.
  • Former Drug Lord Pablo Escobar had so much cash on hand, that while trying to “stash” it, he would lose an estimated $1 BILLION Dollars (U.S.) each year to rats that ate it!
  • If Bill Gates spent $1,000,000 a day, it would take him 218 years to spend all of his money.
  • Sea Shells were once commonly used as currency in many parts of the world.
  • Paper currency can transport the live flu virus for over two weeks while in circulation.
  • Two out of three inherited family fortunes are lost by the new family generation.
  • Americans spend more money on pets annually than Germany spends on its entire defense budget.
  • The total amount of money owed (debt) by every single person and country in the world today totals $199 TRILLION Dollars (U.S.)
  • The wealthiest families in Florence Italy today….are the same families as 600 years ago.
  • Under Federal Law, only deceased people can appear on U.S. currency.
  • The first recorded Bitcoin transaction was to buy a pizza for 10,000 Bitcoins…which later was revalued at over $12 MILLION Dollars (U.S.)
  • $1.5 TRILLION Dollars (U.S.) are paid in bribes worldwide every year, according to a World Bank Estimate.
  • In the 1980’s, the financial sector claimed just 10% of U.S corporate profits. By 2010, it was 30%…supplanting manufacturing as the biggest profit center in the economy.
  • In 2015, a Chinese billionaire purchased a painting for $170 MILLION (U.S.) with his credit card so he could use the points for free airfare.
  • In 2015, Apple Inc. was worth more than Switzerland, Sweden or Nigeria.
  • Two-thirds of all U.S. $100 bills are held outside the United States.
  • Americans throw away $62 MILLION Dollars (U.S.) worth of coins every year.
  • London’s after-hours economy generates $32.3 BILLION Dollars (U.S.) every year.
  • A U.S. one-cent penny costs 2.4 cents to manufacture.
  • China began using paper money more than 1,000 years ago. Marco Polo wrote about it during his expeditions.

Now that we have provided you with enough currency trivia to impress your friends, give us a chance at MosaicaFX to protect your profits!  We are looking forward to discuss your currency management needs at your convenience.

 

Business, Ecommerce

World Markets… …keep your finger on the pulse!

World Markets…

…keep your finger on the pulse!

In this day and age, the world is a fluid and volatile place.  It seems that virtually every day some major event takes place around the world that causes at minimum stock market jitters and at most tumbling currencies.

If some type of aggressive action takes place in the Middle East, the price of crude oil may spike.  If the U.S. markets are roiled due to some negative economic news, the price of gold inches upwards.  When the Fed raises interest rates the Greenback climbs higher.  If the United Kingdom holds firm on its Brexit demands, the Euro slips against the U.S. Dollar.

In short, it appears that based on the speed at which breaking news is now reported and that so many “analysts” are willing to state opinion as fact, the global financial markets are vulnerable to literally hourly fluctuations that may end up impacting foreign markets and economies….and your profits.

What is an investor to do?

A recent survey of investors who traded more than $500,000.00 U.S. Dollars annually showed that on average they reviewed more than 40 different publications, electronic newsletters, e-publications, newspapers, etc., a month….and that they actually received more than 69 pieces of financial information during that same time frame!

This of course does not include the financial television, radio and internet programs they watch or listen to.  Nor does it take into account the basic news and opinion shows they may tune in to that do not specialize in financial or economic stories.  When you consider all of the time and effort that such an investor places in their attempt to remain abreast of market and global trends, it’s no wonder that today’s investors feel completely overwhelmed.

Another interesting factoid that creates almost as many questions as it does answers, is what the  average rate of return for investors from the 1970-80’s was when compared to investment returns for today.  The average return for a wide-market investor today is just over 6%.  However, a really good return on investment for an “active investor” is 15% annually.  In the 1970-80’s the average return for a wide-market investor was close to 7.5%.  A really good return on investment for an “active investor” was very close to the same 15% annually that can be realized today.

Hence, the question appears to be just how helpful is the influx of more up-to-date information for the “plugged-in” investor today when compared to investors almost 50 years ago?  Is there truly an advantage to being supplied with more detailed and voluminous data as an investor in the currency and stock markets?

The answer appears to be “no,” when you consider that investors today may simply be unable to process all of the data that they collect.

MosaicaFX

Most investors will tell you that it is impossible for them to process all of the information, data and news that is collected and sent to them on a daily basis.  The amount of raw data that is provided through the internet, television, social media, radio, email blasts, newsletters, periodicals and traditional publications is almost unfathomable.

The amount of information collected and shared is only half the issue.  The other challenge is in actually analyzing all of that collated data.  In other words, it’s one thing to receive relevant information about a currency or economy.  It is entirely another matter when it comes to weighing all of that data so you can make accurate and valid assessments regarding how best to buy or sell currency on the open market.

If you have read the articles we have published over the last couple of years, you know that we are always cognizant of stating two main points.  First, it is imperative that you rely on solid, accurate data when it comes to being able to make effective decisions regarding your currency management.  Second, that you rely on a solid, experienced currency management partner who can help you decide how best to interpret the data you are receiving.  This partner should also be capable of saving you money on your transactions while protecting your profits.

This partner should be MosaicaFX.

 

 

Business, Ecommerce, Economy

CRITICAL UPDATE! GBP/USD

CRITICAL UPDATE!

GBP/USD

Yesterday saw a tremendous upsurge in the pound.  Whether this upsurge was an over-reaction to the ongoing Brexit news being released on a daily basis or a true stabilizing of the pound, is unclear as of yet.

Tuesday saw a 300-pip rally, which has so far led to the pound holding a neutral position today.  Conventional Wisdom is that the position that Prime Minister Theresa May has taken calling for a snap general election may have contributed to yesterday’s surge.

To that point, investors are counting on the PM developing a stronger mandate to secure the UK’s European Union exit and that she will be able to push back established deadlines for trade deals until the 2022 election cycle.

GBP vs. Brexit

At this point successful currency managers are wondering what type of trade deals the UK will secure with the EU.  For that reason, it could be argued that Tuesday’s upsurge in the pound may have been a bit of any over-reaction.

It is also likely that when you consider that financial (currency) speculators had held record net short positions in the GBP previously, the move higher was undoubtedly fuelled in a big way by short-covering as the GBP/USD moved outside of their recent trading positions.

Now the question is will these speculators aggressively change their GBP holdings in a significant manner?  When you consider that the GBP no longer appears to be as undervalued as it did a few months ago, a “pullback,” of some type may again present the GBP in an attractive light again!

No doubt, the Brexit negotiations and turmoil caused by those efforts still makes the GBP a tough currency to predict trajectories on.  More will be known in the coming days thus helping to provide clarity on the short-term anticipated movements for the GBP.

GBP vs. Greenback

It is expected by international currency players that the GBP is still expected to trend downwards for the long-term against the USD.  It cannot be understated just how important a hawkish central banking system effectively supports the Greenback.

For that reason, most foreign currency exchange entities believe that if a more sustainable rally for the GBP against the USD were to take place, there would need to be a significant change in the interest rates in the UK and/or in the US.  Put another way, the Bank of England will be forced to be more vocal about tightening its currency policies and/or the US FED will need to drop its openly hawkish position as well.

As there is no current sign that either banking entity is willing to entertain such thoughts, we may expect currency speculators to once again take a bearish position on the GBP positions in the coming weeks.  Having said that, many currency management groups believe that the pound will come under pressure again…but with a bit more room to go on the upside before it does so.

Consider this…

Based on yesterdays currency movements,  MosaicaFX believes that this may be a good time to consider using options to help protect profits and short-term currency strategies.  As the RSI indicator moved north of 70 on Tuesday, it is possible the GBP/USD was slightly overbought in the short-term.

While this does not presume another collapse is imminent, it does indicate that exercising options with these currencies could be well conceived.  Our suggestion would be for you to contact your MosaicaFX Account Managers and let them review your current currency portfolio.  Based on the strong performance of Tuesday and the latest information coming out of the UK today… taking such steps could be timely.

Contact us today and let us see what we can do to help you protect your profits with such options.  As we stated in an earlier article, we will continue to monitor this highly fluid situation coming out of the UK to provide up-to-date guidance regarding the GBP.

 

 

Business, Ecommerce

Amazon Cash… bye-bye bank card!

Amazon Cash…

bye-bye bank card!

Amazon has launched a way to shop its site without a bank card.  A new service called Amazon Cash, allows consumers to inject cash into their Amazon.com balance.  It is a fee-free service that is simple to manage.

This service allows an Amazon customer to have an individual barcode scanned at a participating retailer, and then the customer can have cash immediately applied to their Amazon account.  The service will allow between $15.00 and $500.00 to be added to their Amazon account in a single transaction.

You will be able to make cash deposits onto your Amazon Cash account at the following major retailers across the nation:

  • Sheetz
  • Kum & Go
  • Speedway
  • VB’s Grocery
  • CVS Pharmacy
  • D&W Fresh Market
  • Family Fare Supermarkets

Other participating retail stores will be added in the future as the Amazon Cash program grows.

Similar to PayPal…

Amazon Cash is meant to appeal to the same general demographic of clients who currently use PayPal My Cash Card.  However, Amazon’s new service is also designed to appeal to those who may not yet be shopping online and who also get paid in cash, don’t have a bank account or debit card and who don’t use credit cards.

A 2015 report from the FDIC indicated that “cash customers,” account for approximately 27 percent of consumers in the U.S. today.  While these consumers may not have a great deal of disposable income to spend at times, when they do have that extra cash, they need an effective way to make it available for online shopping.

It is expected that from a broader position, the new Amazon Cash service could appeal to anyone who just wants to deposit some cash in their Amazon.com account with less hassle.   Of course, one of the advantages to Amazon Cash is that as soon as you checkout at the register, the cash funds you provided are immediately available in your Amazon account.  There are also no expected store fees…which set this service apart from most prepaid cards on the market.

Barcode Driven Service

Amazon Cash will not be providing “branded gift cards,” at these retail outlets.  Instead, Amazon Cash clients will visit Amazon.com/cash either from their mobile device or through their normal web portal device.  Once there, they will access their Amazon Cash barcode.

They will also be able to navigate to “Manage Gift Card Balance,” to find their Amazon Cash barcode.  Once they have their barcode it can be used at any time (repeatedly) to have cash added to their account.  The barcode can also be added to an Apple Wallet app on iOS or as a home-screen shortcut on Android.

To use the Amazon Cash program, the customer simply presents the cashier with their barcode, tells them how much cash they want to add to their account and then hands over the cash.  The cashier will then scan the barcode straight from their Smartphone and deposit the cash into their cash drawer. Almost instantaneously, once the cashier enters the transaction, the funds are in the customers Amazon account!

If the customer doesn’t use a Smartphone (or their screen is cracked or damaged) they can print off the barcode at home on a piece of paper and bring that with them to the retailer to be scanned.  Once the funds hit the customer’s account, they are alerted through an email or registered phone number with Amazon…..or a push notification if the Amazon mobile app is installed.

Amazon Cash Security…

It is expected that even people who do have debit cards, bank accounts and credit cards may choose to use the Amazon Cash service for security purposes.  When you consider that you can load a specific amount of cash into your account without fear of someone hacking your credit or bank card information, this could be a big deal.

It also can bring added piece of mind to Amazon Sellers as they will know that charge-back requests through a bank card will not be an issue as these accounts are cash based only.  There are other security advantages with regards to the Amazon Cash service that will be released in the coming months.

Strange that in a world where the trend has been towards a “cashless” society…Amazon expands the use of cash into the digital marketplace.  Only time will tell if this new service will be as big a success as PayPal has become.  However, our bet is that Amazon Cash will encourage new customer’s that have not been present in the digital marketplace previously to try Amazon.

 

Business, Ecommerce, Economy

Green Products Grow Greenbacks Fast!

Green Products Grow Greenbacks Fast!

One of the areas that importers and exporters are always focusing on is on how to increase revenue.  Most large corporations will tell you that for any notable revenue growth to take place on their P&L statements, it is necessary to continue to refine and add new product lines.

As the saying goes in business, “…tried and true products pay the bills but new products grow the profits!”  For that reason, business owners are constantly on the lookout for new and innovative products to bring to market.

Ideally, these entrepreneurs are in search of new, unique and highly desirable products that have minimal costs associated with them but support high margins at the consumer-purchasing end of the process.  Of course, if an exclusive can be carved out regarding the product….all the better!

One of the most notable areas of product innovation and growth in the consumer retail vertical has been with bio-friendly or “green” products.  These types of products are in high-demand for a variety of reasons.

Give us green!

As one may imagine, if you can get the general media, education centers and influencers to constantly explain why using “green” products are important for us individually, collectively as well as for the environment…then your marketing costs can be greatly mitigated when selling bio-friendly or environmentally friendly products.

In fact, 72% of consumers now claim to feel “pressured” into buying “green” products, even if they cost substantially more than alternative products.  Even products that claim to be “green” or eco-friendly yet are unable to provide substantiating documentation from independent sources are chosen over similar products which do not make such dubious claims.

Market Research Direct, Inc., a leading market research company has uncovered that by simply using “green” sounding terms and verbiage (substantiated or not) targeted consumers will pay up to 18% more for that product over similar performing products not using such “green” sounding terms.

Eco-Marketing

Inc. Magazine research discovered that ninety-five percent of consumer products claiming to be “green” over the past year were in some way vague, deceptive or misleading.  That data was correlated by the marketing company TerraChoice, which also found a 73% increase in so called environmentally friendly products on the market over the past twelve months.

Since these “green” products are now more popular than ever, more businesses are introducing new eco-friendly products and even relabeling old products to appear “green.”  If you are considering updating your products to be more “green” appealing, there are certain concepts you should keep in mind.

  • Be Specific. The FTC has now published guidelines called the Green Guides for businesses making environmental benefit claims.  These guidelines are designed to discourage companies from using terms like “Earth-smart,” or “nature-approved,” which are not supported by scientific evidence.
  • Use provable and simple terminology on your packaging. Conventional wisdom dictates that the easier eco-friendly terminology is to understand by laypersons, the more likely the claims are provable and true.  Overly complicated terms and verbiage used to explain products “green” performance generally turns customers off as the claims are more likely to be considered “bogus.”
  • Consider independent certifications or claims endorsements. Many companies will now apply third-party approvals and/or endorsements regarding a products “green” gravitas.  Having an applied approval or logo from Green Seal or the Chlorine Free Products Association as an example, can easily provide more effective (and honest) claims confirmation.
  • Be transparent. Market research indicates that consumers want transparency when it comes to green-claims made by product representatives.  If the products green-claims are accurate, make that data available for review on your website.  It doesn’t mean that every customer will read the data, but, it does mean that every customer will feel better knowing you were willing to provide it.

Eco-Option Sales…

If your company is looking to expand its profit stream, then consider the following concept.  The old business model was that a company needed to import or manufacture new products to sell on their digital marketplace.  The new model is that it may not be necessary to import or manufacture new products….but only green alternatives to established brands!

As an example, why import a new super efficient clothing detergent when the market may already have a hundred versions you would have to compete with, when you could sell a eco-friendly, chlorine-free, hypo-allergenic, all natural product….that could sell for at least 18% more than competitor products already saturating the market?

Perhaps now is the time to expand your market and increase your margins by simply capitalizing on the fastest growing product trend on the internet today.  The old business adage used to be, “Go Big or Go Home,” now the more appropriate motto could be, “Go Green or Go Broke!”

 

Business, Ecommerce, Economy

Euro vs. Dollar: Heavyweight Match Up of the Year!

Euro vs. Dollar

Heavyweight Match Up of the Year!

The heavy weight bout of the year (to-date) is taking place right now.  We’re talking about the Euro and how it is valued against the U.S. Dollar.  As we have recently been reporting, the Euro is under a great deal of stress right now due to Brexit and the political issues currently facing multiple EU members.

Some more pressure was applied to the Euro this week when the ECB indicated that it has no intention to withdraw its massive stimulus program.   Couple this with stronger than anticipated economic news for the United States, resulting in a slight strengthening of the Dollar, and the Euro appears ripe for continued weakening against the Greenback.

New EU Numbers…

Numbers just released by the EU reflecting its March confidence figures shows the actual numbers were lower than the published expectations.  The economic sentiment indicator came in at 107.9, below the previous 108.00 and well below the expected 108.2.  Consumer confidence however remained unchanged at -5.

Pending March inflation numbers have yet to be released yet they are expected to have advanced less than during February.  Unless the final revision of the US Q4 GDP is substantially greater than the previous estimate of 1.9%, it is expected this updated data will have little or no effect on the currency pairing.

ECB Hammer about to DROP…

It is expected by most currency analysts that the Euro exchange rate values are about to be hit by Thor’s Hammer in the shape of the European Central Bank as analysts from a prominent Scandinavian economic research house has suggested that another round of quantitative easing is about to enacted.

Many economists believe that in the coming months, the ECB will begin releasing warning statements that another such effort will be needed to stabilize several member economies, with the ECB taking a more hawkish stance by the end of this year.

It is important to remember that the common belief was that the ECB was poised to begin shutting down the quantitative easing program?  The value of the Euro was essentially based on this assumption.  Now however, if the ECB shifts its stance (as expected) this could trigger additional (notable) weakening of the Euro.

Having said that, it is important to recall that the Euro plunged in December when the ECB announced another extension to the quantitative easing program.  If this was a formula for the Euro dipping then…it is expected a repeat could be in the cards!

An Unexpected Inflation Deviation

At this point, the 2% inflation target as set by the ECB looks more and more unlikely.  In fact, it appears that inflation is headed in the opposite direction from where the European Central Bank needs it to go.

The most recent inflation data for Germany, Spain and Belgium indicates that the Eurozone inflation rate has dropped back to levels well below 2% in March.  In fact, HICP indicates that the German inflation rate declined to 1.5% down from 2.2% in February…when markets had actually forecast a rise of 1.9%

In Spain it actually dropped to 2.1% from 3.0% and Belgium recorded a decline to 2.3% from 3.0%.  This published inflation data again indicates another factor in the Euro’s underperformance and underscores again why the ECB is not keen on withdrawing its stimulus at this time.

If you look at the current Euro exchange rate, it is obvious that we are seeing a reaction to several factors including news the ECB is very concerned with the direction inflation is headed.  It is also likely that the ECB is equally unhappy with the market’s reaction to their March policy meeting.

EURO/USD Slipping Below Parity?

Citibank also sees more bad news on the horizon for the Euro. These analysts are suggesting that the current price action for the EUR/USD is remarkably consistent with what we realized in October and November of 1999, thus suggesting “…we will see levels below parity over the medium term.”

At that time, the market entered a short EUR/USD position.  If history repeats itself and the EUR/USD falls below parity you can be assured that the EUR/GBP may fall sharply too owning to those same correlations.

THE BOTTOM LINE…

U.S. economic data has been quite strong in recent weeks.  Durable Goods Orders are reflecting robust gains, New Home Sales have risen 6.1% and the Current Account deficit is shrinking…..all potentially positive indicators for the Greenback moving forward.

The March Personal Consumption Expenditure (PCE) numbers as released reflect a 1.8% rate… beating February’s 1.7% yet still below a hoped for 2.0%.  When this data is coupled with the Michigan Sentiment Rating of 96.9, up from February’s 96.3 the overall effect is considered negligible regarding its impact on the Dollar.

Overall, the Dollar may continue to strengthen against a basket of currencies in the near term and specifically against the Euro.  When you consider the overall volume of data that must be collected and correlated to effectively manage currency trading today, it is even more obvious that working with a preeminent foreign exchange partner like Mosaica FX is even more essential.

Let us prove our worth to you today.  Contact one of our experienced currency trading Managers for a briefing on how you should manage your currency trading in today’s market.