2024-12-05 06:38

Bitcoin has more than doubled this year Trump on Wednesday picked pro-crypto Paul Atkins to lead SEC Elon Musk, a major Trump ally, supports cryptocurrencies Crypto-related stocks have surged Dec 5 (Reuters) - Bitcoin catapulted above $100,000 for the first time on Thursday, a milestone hailed even by sceptics as a coming-of-age for digital assets as investors bet on a friendly U.S. administration to cement the place of cryptocurrencies in financial markets. Once it broke $100,000 in Thursday's Asian morning, boosted by U.S. President-elect Trump's nomination of pro-crypto Paul Atkins to run the Securities and Exchange Commission, it was soon at an all-time high of $103,649. It last fetched $98,803, up 0.95% on the day . The total value of the cryptocurrency market has almost doubled over the year so far to hit a record over $3.8 trillion, according to data provider CoinGecko. By comparison, Apple (AAPL.O) , opens new tab alone is worth about $3.7 trillion. Bitcoin's march from the libertarian fringe to Wall Street has minted millionaires, a new asset class and popularised the concept of "decentralised finance" in a volatile and often controversial period since its creation 16 years ago. Bitcoin has more than doubled in value this year and is up more than 50% in the four weeks since Donald Trump's sweeping election victory, which also saw a slew of pro-crypto lawmakers being elected to Congress. "CONGRATULATIONS BITCOINERS!!! $100,000!!! YOU’RE WELCOME!!! Together, we will Make America Great Again!" Trump said on Truth Social, his social media network, on Thursday. "We're witnessing a paradigm shift," said Mike Novogratz, founder and CEO of U.S. crypto firm Galaxy Digital. "Bitcoin and the entire digital asset ecosystem are on the brink of entering the financial mainstream - this momentum is fuelled by institutional adoption, advancements in tokenisation and payments, and a clearer regulatory path." Trump - who once labelled crypto a scam - embraced digital assets during his campaign, promising to make the United States the "crypto capital of the planet" and to accumulate a national stockpile of bitcoin. "We were trading basically sideways for about seven months, then immediately after Nov. 5, U.S. investors resumed buying hand-over-fist," said Joe McCann, CEO and founder of Asymmetric, a Miami digital assets hedge fund. Bitcoin's proponents cheered Trump's nomination of Atkins to the SEC. A former SEC commissioner, Atkins has been involved in crypto policy as co-chair of the Token Alliance, which works to "develop best practices for digital asset issuances and trading platforms," and the Chamber of Digital Commerce. "Atkins will offer a new perspective, anchored by a deep understanding of the digital asset ecosystem," said Blockchain Association CEO Kristin Smith. "We look forward to working with him ... and ushering in – together – a new wave of American crypto innovation." A slew of crypto companies including Ripple, Kraken and Circle are also jostling for a seat on Trump's promised crypto advisory council. PART OF THE LANDSCAPE Bitcoin has proven a survivor through precipitous downturns. Its move into six-figure territory is a remarkable comeback from a dip below $16,000 in 2022 when the industry was reeling from the collapse of the FTX exchange. Founder Sam Bankman-Fried was subsequently jailed. Analysts say the growing embrace of bitcoin by big investors this year has been a driving force behind the record-breaking rally. U.S.-listed bitcoin exchange-traded funds were approved in January and have been a conduit for large-scale buying, with more than $4 billion streaming into these funds since the election. "Roughly 3% of the total supply of bitcoins that will ever exist have been purchased in 2024 by institutional money," said Geoff Kendrick, global head of digital assets research at Standard Chartered. "Digital assets, as an asset class, is becoming normalised," he said. It is already becoming increasingly financialised, with the launch of bitcoin futures in 2017 and a strong debut for options on BlackRock's ETF (IBIT.O) , opens new tab in November. Crypto-related stocks have soared along with the bitcoin price, with shares in bitcoin miner MARA Holdings (MARA.O) , opens new tab and exchange operator Coinbase (COIN.O) , opens new tab each up around 65% in November. Software firm Microstrategy , which has repeatedly raised funds to buy bitcoin and held an aggregate of about 402,100 bitcoins as of Dec. 1, has gained around 540% this year. Trump himself unveiled a new crypto business, World Liberty Financial, in September, although details have been scarce and billionaire Elon Musk, a major Trump ally, is also a proponent of cryptocurrencies. Some say the asset remains a speculative or investment vehicle and not an instrument for payments. On Wednesday, Federal Reserve Chair Jerome Powell likened bitcoin to gold, “only it's virtual, it's digital." "People are not using it as a form of payment, or as a store of value. It's highly volatile, it’s not a competitor for the dollar." While earlier big bitcoin rallies have been followed by significant pullbacks, its wider adoption now may help tamp down volatility, analysts said. "That is not to say that there will not be 30-50% drawdowns over time, but my base case is that the nature of the drawdowns will be less severe than what we saw in the last bear market," Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors, said. "Passive flows into ETFs, a liquid options market, corporate treasury adoption, and nation state adoption will likely play a large role in dampening volatility," Farrell said. 'WHO CAN PROHIBIT IT' Cryptocurrencies have been criticised for their massive energy consumption and use in crime around the world, and the underlying technology is far from delivering a revolution in the way money moves around the globe. The U.S. and Britain announced on Wednesday they had disrupted what they described as a global money laundering ring which used cryptocurrency to help rich Russians to evade sanctions and launder cash for drug traffickers. Although calculations vary, the Cambridge University Centre for Alternative Finance estimates bitcoin uses around the same amount of electricity each year as Poland or South Africa. Still, as Russian President Vladimir Putin pointed out at an investment conference on Wednesday: "Who can prohibit it? No one." And its longevity is perhaps testament to a degree of resilience. "As time goes by it's proving itself as part of the financial landscape," said Shane Oliver, chief economist and head of investment strategy at AMP in Sydney. "I find it very hard to value it ... it's anyone's guess. But it does have a momentum aspect to it and at the moment the momentum is up." Sign up here. https://www.reuters.com/technology/bitcoin-tops-100000-optimism-over-trump-crypto-plans-2024-12-05/

2024-12-05 06:32

MUMBAI, Dec 5 (Reuters) - Nomura stuck by its contrarian call that the Reserve Bank of India will lower interest rates on Friday as concerns over economic growth overshadow worries about high inflation and the rupee's weakness. Nomura is one of the five economists surveyed in a Reuters poll that expect the RBI to lower rates by 25 basis points. The other 62 expect status quo after retail inflation jumped above the RBI's tolerance limit for the first time in over a year and as the rupee plumbs record lows on a regular basis due to portfolio outflows and the dollar's post-U.S. election rally. Nomura, however, noted that high prices were concentrated in a few items, including food, rather than being broad-based, and that inflation excluding vegetables and other volatile items was still subdued. The one-year forward inflation outlook is benign, the investment bank said. On the rupee, Nomura said that without signs of growth stability, the pressure on the external sector would continue, since India largely attracts growth capital, and that would further undermine the currency. FOCUS ON GROWTH "The RBI's primary objective is to maintain price stability while keeping in mind the objective of growth," Nomura said. "We have long held the view that growth sacrifice was on the rise, due to various factors, including the RBI's tight monetary policy." The Indian economy has lost momentum, with GDP growth slowing to a seven-quarter low in the July-September quarter. Nonetheless, BofA Securities, which expects the RBI to hold rates, said that while growth is weak, exchange rate considerations will come into play. "A new dimension to the policy thought process has been the recent outflows in equity markets and pressure on the rupee, which the RBI has managed by heavy intervention," BofA said. "A sudden weakness in the rupee can bring concerns of financial stability and imported inflation to the fore." Sign up here. https://www.reuters.com/world/india/rupee-weakness-will-not-deter-india-cenbank-cutting-rates-nomura-says-2024-12-05/

2024-12-05 06:25

Euro moves away from two-year low hit in November Bitcoin hits past a record $100,000 Dollar drops after higher-than-expected US jobless claims Focus on US nonfarm payrolls report NEW YORK, Dec 5 (Reuters) - The euro rallied on Thursday as French government bonds steadied a day after the collapse of France's government, even as bitcoin soared to a record past $100,000, with investors cheering the nomination of a pro-cryptocurrency head to run the U.S. Securities and Exchange Commission. The spread between French and German 10-year yields narrowed on Thursday to 76.9 basis points , the tightest gap since Nov. 22. That has helped support the euro. Despite Thursday's gains, however, the euro was on track to post a loss this week, the fourth in the last five weeks. French President Emmanuel Macron met allies and parliament leaders on Thursday as he sought to swiftly appoint a new prime minister to replace Michel Barnier, who officially resigned a day after opposition lawmakers voted to oust his government. "The market is looking at the financial implications of the French government's collapse. The takeaway seems to be that it's not as impactful to the spending plans as initially thought, and that's keeping the euro alive," said Amo Sahota, executive director at FX consulting firm Klarity FX. "We saw a lot of similarities when Greece is going through a lot of political instability and that could be a major drag on the euro zone. We got two large economies within the euro zone with struggling governments: France and Germany and analysts are concerned about the euro and they have already lowered their projections as a result." Germany was thrown into political disarray by the collapse of Chancellor Olaf Scholz's coalition last month as well as disagreements over government spending. The euro was last up 0.6% at $1.0567, further moving away from the two-year low of $1.0332 hit at the end of November as traders braced for a drawn-out reckoning for France. In terms of technical factors, Shaun Osborne, chief FX strategist at Scotiabank in Toronto, said the positive short-term price action on Wednesday coupled with moderate gains through the low $1.05s on Thursday, have given "the euro a shot at extending a little higher to test key resistance and potential bull trigger at $1.0590." Traders are also all but certain the European Central Bank will cut interest rates next week and are pricing in around 157 basis points of easing by the end of 2025. Meanwhile, bitcoin, the world's best known cryptocurrency, has been on a tear since November on expectations that Donald Trump's U.S. presidential election win will usher in a friendly regulatory environment for cryptocurrencies. It rose to an all-time high of $103,649 in Asian hours, boosted in part by President-elect Trump's nomination of pro-crypto Paul Atkins to run the SEC. It was last up 1.3% at $99,147 , taking its year-to-date gains to more than 130%. "With a better U.S. regulatory environment and next-generation stablecoins driving adoption in Europe, we believe bitcoin and the broader crypto market could continue to go from strength to strength," wrote Arnoud Star Busmann, chief executive of Quantoz Payments, a Netherlands-based payments technology company. YEN ON THE RISE In Asia, the Japanese yen rose as high as 149.66 per dollar but was last up 0.4% at 150.01 as traders pondered whether the Bank of Japan will hike interest rates later this month. Analysts said comments from typically dovish policymaker Toyoaki Nakamura that he's not opposed to rate hikes helped push the currency higher. Expectations had been growing that the BOJ will hike rates at its Dec. 18-19 meeting, bolstered by comments from Governor Kazuo Ueda, although media reports published on Wednesday suggested the BOJ may skip a rate hike this month. The South Korean won dipped slightly as the nation's finance ministry said the government would activate 40 trillion won ($28.35 billion) worth of market stabilization funds after the chaos that followed President Yoon Suk Yeol's martial law declaration on Tuesday, which he rescinded hours later. The won was last down 0.2% at 1,413 per U.S. dollar. The dollar index , which measures the U.S. currency against six rivals, fell 0.6% to 105.74. It extended losses after data showed initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 224,000 for the week ended Nov. 30. Economists polled by Reuters had forecast 215,000 claims for the latest week. The spotlight will be on Friday's U.S. nonfarm payrolls report for November, which is expected to show 200,000 jobs added in the month, according to a Reuters survey, after only 12,000 jobs were created in October, the lowest number since December 2020. Bets on Fed rate cuts held broadly steady, however, partly influenced by Wednesday's weaker-than-expected services sector data and the higher-than-expected jobless claims. Markets are pricing in about a 70% chance of a 25-bp rate cut later this month, and a 30% chance of a pause. Sign up here. https://www.reuters.com/markets/currencies/euro-wobbles-skorean-won-steady-political-turmoil-checks-sentiment-2024-12-05/

2024-12-05 06:10

U.S. payrolls report due on Friday Powell says Fed can afford to be a little more cautious Silver will struggle to move higher amid consolidating gold prices - ANZ Dec 5 (Reuters) - Gold prices were subdued on Thursday as investors remained cautious ahead of U.S. payrolls data that could provide more insights into the Federal Reserve's monetary policy path. Spot gold edged 0.1% lower at $2,648.02 per ounce by 0726 GMT. U.S. gold futures also eased 0.1% to $2,672.90. "As of now, prices have got good support near $2,600. We are bullish on gold due to geopolitical scenarios, de-dollarisation, and central bank buying, and expect prices to test around $3,000 by March 2025," said Ajay Kedia, director at Kedia Commodities, Mumbai. Gold is considered a hedge against geopolitical turmoil and inflation, but higher rates reduce the appeal of holding the non-yielding asset. Fed Chair Jerome Powell said on Wednesday the U.S. economy is stronger than the central bank had expected in September when it began trimming rates and appeared to signal his support for a slower pace of cuts in the future. "There's no sense of urgency" on cutting rates, San Francisco Fed Bank President Mary Daly said. Traders' attention is likely to shift to the U.S. payrolls report on Friday, followed by inflation data for November expected next week. Markets currently see a 74% chance of a 25-basis-point rate cut this month, according to the CME Group's FedWatch Tool. "After outperforming this year, gold prices are likely to take a breather in the short term ... Recent dollar strength is likely to continue, and this will be another headwind for gold demand," ANZ said in a note. "Silver prices will struggle to move higher amid consolidating gold prices in the short-term." Spot silver steadied at $31.28 per ounce. Elsewhere, Perth Mint's gold and silver sales nearly doubled in November, compared with the previous month. Platinum shed 0.2% to $943.14 and palladium edged 0.1% higher to $978.58. Sign up here. https://www.reuters.com/markets/commodities/gold-flat-investors-await-us-payrolls-data-2024-12-05/

2024-12-05 06:02

LITTLETON, Colorado, Dec 5 (Reuters) - The collapse of France's government on Wednesday could have far-reaching consequences for Europe's energy markets and send regional electricity costs soaring. France is by far the largest electricity exporter in Europe, accounting for roughly 60% of net electricity exports so far in 2024, according to energy data service energy-charts.info. Record French electricity exports this year have provided neighbours with critical supplies of cheap and clean power while the region remains hobbled by high energy costs, weak economic growth and political disarray. But France's own political upheaval now calls into question whether the country can sustain its high levels of electricity output and exports. BUDGET BUSTING French utility EDF is closely entangled in the country's political system, as the company was taken over by the government in 2022 after racking debts of roughly $10 billion. EDF runs the country's nuclear power fleet, which supplies around 70% of France's electricity, and so is viewed as of critical national importance. However, the company's massive debt pile has only added to the government's own growing debt obligations, a major factor behind the government's collapse. As a state-owned entity, EDF can access capital at preferential rates, and just last month the government was planning to make interest-free loans to EDF to cover the construction cost of new reactors. read more However, the energy sector is also looked on as a potential source of government funds, and outgoing Prime Minister Michel Barnier had to abandon proposals for new taxes on electricity supplies just days before being ousted. read more The resulting power vacuum now clouds the outlook for the entire energy generation and distribution sector, as EDF still needs regular and sizeable investments just to maintain the country's aging nuclear fleet and power grids. RECORD EXPORTS NOW IN JEOPARDY The relatively low cost of French nuclear generation has allowed the country to enjoy sharply lower power prices than its neighbours, and the means to export surplus electricity into interconnected markets. So far in 2024, France's wholesale power prices have averaged around 25% less than those of Germany and The Netherlands, and 45% less than Italy's, according to LSEG. That cost differential has motivated French power traders to export surplus supplies at a tidy profit. However, any forced cuts to France's power generation tied to budget tussles could quickly curtail electricity exports. And no other nation is capable of replacing France's electricity supplies at such low cost. Over the first eleven months of 2024, France exported nearly 84 terawatt hours (TWh) of electricity to neighbouring nations, according to energy-charts.info. That export tally was 85% more than during the same period in 2023, and the highest for that period on records going back to 2015. The country's mammoth nuclear fleet - the largest in Europe - has been the key driver of those exports, with nuclear-powered generation climbing by around 12% from 2023's levels to three-year highs in 2024, according to LSEG. A 31% jump in hydro power output to the highest in over a decade has also helped fuel French generation and exports. However, both nuclear and hydro production are already approaching the upper limits of historical output levels, and so are at risk of reduction during any protracted political impasse or due to funding cuts. GRIDLOCKED Germany and Italy are two of Europe's largest electricity importers, and will be particularly impacted by any loss of French power flows. Both countries have large natural gas-fired power plant networks that have been hit hard by the drop in Russian gas supplies since 2022. And Germany and Italy have stepped up imports of liquefied natural gas (LNG) in recent years in an attempt to restore domestic energy production. But the sharply higher cost of LNG compared to pipelined supplies has meant that industries reliant on gas for power or as a feedstock have seen costs balloon. Those surging costs have driven an acceleration in the electrification of energy consumption, and a surge in electricity imports by nearly all European nations. So far, France has been able to supply most of that needed electricity, and helped keep regional electricity costs in check. But if France's power system loses steam as a result of the impending political skirmish, electricity importers may be faced with a drop in available supplies and surging power costs that could ignite a fresh regional energy crisis. The opinions expressed here are those of the author, a market analyst for Reuters. Sign up here. https://www.reuters.com/business/energy/frances-political-woes-may-trigger-fresh-europe-energy-crisis-maguire-2024-12-05/

2024-12-05 05:47

A look at the day ahead in European and global markets from Tom Westbrook One bitcoin will now set you back six figures. The cryptocurrency's break above the $100,000 milestone has felt inevitable since Donald Trump's election as the next U.S. president on a crypto-friendly platform. While it is just a number, it highlights how cryptos have carved out a place in modern financial markets. Some commentators joked that perhaps a sales pitch from children and grandchildren around the Thanksgiving table was enough to get it past $100,000 - after investors in recent weeks repeatedly flinched near that threshold - although the real action came from big investors and big flows into new bitcoin ETFs. The breakthrough also correlates with strength in stocks and the broader mood. Wall Street indexes made record highs on Wednesday as confidence grew about U.S. rate cuts, while sharp gains in German stocks (.GDAXI) , opens new tab seemed to defy the gloom enveloping Europe. A crisis in France deepened on Wednesday when the parliament passed a no-confidence motion in the government for the first time since 1962. Erstwhile centres of stability in Germany, France, Japan and South Korea are now grappling with political turmoil. French bond futures were steady in Asia, as were financial markets in South Korea, where a motion was introduced in parliament to impeach President Yoon Suk Yeol over a botched attempt at imposing martial law. Broader unease over political upheavals is perhaps part of the lure behind cryptocurrency investments, as is a desire to hedge against some of the risks in traditional asset classes. Politics aside, chief among data releases this week is Friday's U.S. jobs report, where a strong reading could challenge market expectations for interest rate cuts. European retail sales data and German industrial orders will also be closely watched. Key developments that could influence markets on Thursday: - Fallout from France's no-confidence vote - Eurozone retail sales - German industrial orders Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-12-05/