2024-01-09 06:31

Jan 9 (Reuters) - Will they, won't they? U.S. regulators are keeping crypto players on the edge of their seats as they weigh whether to give their blessing to bitcoin exchange-traded funds (ETFs). Derivatives traders are already piling in, though, betting the Securities and Exchange Commission will give the green light to several ETF hopefuls this week and electrify the market. Open interest, the amount invested in bitcoin futures, has steadily increased since October and leapt to $19.2 billion in early December, its highest level in two years, according to information platform Coinglass. It's now between $17 billon and $18 billion, up from the $9.5-$14.5 billion range seen for most of 2023. "We eagerly await the SEC's decision," said analysts at analytics firm Amberdata. "This event has been factored into the options market's pricing since October, creating a heightened sense of anticipation." It's been a long road for U.S.-listed spot ETFs linked to volatile bitcoin , which would allow access to the cryptocurrency via regular stock exchanges in a marriage with mainstream finance that could attract big investors. Multiple asset managers have applied for permission to launch spot bitcoin ETFs since 2013, but the SEC has rejected them, arguing products would be vulnerable to market manipulation. But by the end of 2023, a year in which the discussions and lobbying intensified, the SEC was holding talks with firms keen to issue ETFs, raising hopes that the long-awaited funds would hit market and trigger waves of bitcoin investment. BITCOIN RISE AND SLIDE Bitcoin's funding rates have jumped across most exchanges this year, indicating traders are willing to pay more to maintain long positions, and funding rates have been mostly positive since October, according to Coinglass. Those leaps took place as spot bitcoin rose above the $45,000 level on Jan. 2, following a 170% rise in 2023. Excitement has gripped both retail and institutional investors, with premiums soaring for bitcoin futures on the Chicago Mercantile Exchange (CME). "CME's front-month BTC premium has averaged 42% since the yearly open, a new all-time high, telling of the massive long bias presently in the market," analysts at K33 Research said. Beware bumpy bitcoin, though. With so much bullishness baked in, negative news on a spot ETF could spark a wave of selling, many market watchers warn. After its initial jump, bitcoin's spot price dropped back below $43,000 though it has since recovered. As it slid, it triggered "a wave of liquidations, with bitcoin open interest dropping by more than $1 billion in just a few hours as leverage was flushed out of the market," said Dessislava Aubert, senior analyst at Kaiko Research. Jag Kooner, head of derivatives at Bitfinex, said even approval of a spot ETF could cause a pullback in prices as investors book profits, which "highlights the market's sensitivity to news and regulatory developments." FEAR OF MISSING OUT? In the bitcoin options market, at-the-money implied volatility - the market's estimate of a likely movement in price - is at its highest levels in a year, according to data from The Block. Options contracts give their buyers the right, but not an obligation, to buy or sell an underlying asset at a fixed price in the future. Coinglass' crypto fear & greed index, a measure of market sentiment, is at a two-month high and firmly in "greed" territory for the past 30 days, indicating "fear of missing out" sentiment is at elevated levels. https://www.reuters.com/technology/cryptoverse-bitcoin-derivatives-traders-bet-billions-etf-future-2024-01-09/

2024-01-09 06:18

NEW YORK, Jan 9 (Reuters) - The dollar rose against the euro and yen on Tuesday as traders awaited inflation data on Thursday for clues on when the Federal Reserve is likely to cut rates. In cryptocurrencies, bitcoin dipped but remained near its strongest level since April 2022 as anticipation mounted the Securities and Exchange Commission will imminently approve spot bitcoin exchange-traded funds (ETFs). The dollar index had hit a five-month low in December when investors priced for the likelihood that the Fed will cut rates sooner rather than later as inflation eases closer to its 2% annual target and economic data shows signs of softness. It has recovered from some of that weakness this year, with the sell-off seen by some as overdone heading into year-end. But Fed expectations are likely to continue to drive dollar moves. “Throughout December the theme was really the Fed pivoting amidst weaker data,” said Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto. “At this point we’re pricing in a significant amount of easing from the March meeting and the risk/reward is tilted to a degree. Maybe there are some market participants out there that look at what’s priced in and are easing up on their dollar shorts that were initiated in December,” he added. The release on Thursday of the consumer price inflation report for December will be the main piece of economic data this week. It is expected to show headline inflation rose 0.2% in the month and by 3.2% on an annual basis. (USCPI=ECI), (USCPNY=ECI) If the data confirms that inflation is continuing to moderate it could boost expectations for a March rate cut, though if it comes in above expectations it could also reverse some of that pricing. Fed funds futures indicate a 64% probability of a March rate cut, down from 70% a week ago, according to the CME Group’s FedWatch Tool. "The market is still trying to find its feet in terms of the trajectory and timing of the first U.S. rate cut," said Kamal Sharma, senior G10 FX strategist at Bank of America, who expects the Fed to start cutting rates at the March meeting. "Our base case scenario is for a soft landing, lower dollar, bull steepening and that broadly should be supportive of risk assets more generally," Sharma added. Data on Tuesday showed that the U.S. trade deficit unexpectedly narrowed in November as imports of consumer goods fell to a one-year low amid slowing domestic demand, a trend that, if it persists in December, could result in trade having no impact on economic growth in the fourth quarter. The U.S. dollar index , which measures the greenback against a basket of six currencies, was last up 0.26% at 102.57. The euro dipped 0.23% to $1.09250, while sterling slipped 0.39% to $1.26990. In Asia, data on Tuesday showed core inflation in Japan's capital slowed for the second straight month in December, taking some pressure off the Bank of Japan to rush into exiting ultra-loose monetary policy. The dollar was last up 0.25% at 144.54 yen . Bitcoin fell 0.26% to $46,874, after reaching a 21-month high of $47,281 on Monday. Investment managers had on Monday disclosed the fees they plan to charge for their proposed spot bitcoin ETFs, in another step toward approval this week by the U.S. securities regulator. https://www.reuters.com/markets/currencies/dollar-pulls-back-bitcoin-jumps-ahead-etf-approval-deadline-2024-01-09/

2024-01-09 06:16

Dow, S&P 500 end lower 10-year Treasury yield edges up Bitcoin slips NEW YORK, Jan 9 (Reuters) - Global stock indexes mostly dipped and Treasury yields edged higher on Tuesday, with investors bracing for key U.S. inflation data this week and the start of fourth-quarter company earnings. Bitcoin rose, then fell, on confusion late on Tuesday afternoon over whether the U.S. Securities and Exchange Commission had approved spot bitcoin exchange-traded funds. An SEC spokesman said the SEC has not approved spot bitcoin ETFs and that a post on its social medial platform X was incorrect. All eyes will be on the U.S. consumer prices report for December, due on Thursday. It is expected to show headline inflation rose 0.2% in the month and by 3.2% on an annual basis. (USCPI=ECI), (USCPNY=ECI) Investors are looking for clues on when the Federal Reserve may begin cutting interest rates. Expectations the U.S. central bank could begin cutting rates as soon as March have decreased, with CME's FedWatch Tool showing a 65.7% chance for a cut of at least 25 basis points (bps) for the month, down from 79% a week ago. Ahead of the U.S. earnings season kicking off on Friday, shares in some major U.S. banks fell around 1%. "This is pre-earnings jitters, with valuations being quite rich, and you needing earnings growth to support these valuations," said Phil Blancato, chief executive officer of Ladenburg Thalmann Asset Management. The Dow Jones Industrial Average (.DJI) fell 157.85 points, or 0.42%, to 37,525.16, the (.SPX) lost 7.04 points, or 0.15%, to 4,756.50 and the (.IXIC) gained 13.94 points, or 0.09%, to 14,857.71. The S&P 500 rose 24% in 2023. Boeing (BA.N) shares fell 1.4%. The U.S. National Transportation Safety Board said late on Monday it could not yet tell whether a recovered cabin panel that blew off an Alaska Airlines (ALK.N) Boeing 737 MAX 9 plane during a flight last week had been properly attached. The MSCI world equity index (.MIWD00000PUS), which tracks shares in 49 nations, lost 0.23%, while European stocks (.STOXX) ended down 0.2%. Euro area unemployment data released on Tuesday came in below expectations. U.S. Treasury yields were marginally higher. The U.S. Treasury sold $52 billion in three-year notes, picking up a high yield of 4.105%, lower than the market expected at the bid deadline, suggesting investors absorbed the note without a premium. In afternoon trading, the benchmark 10-year yield was slightly up at 4.017% . The dollar rose 0.17% against the yen to 144.46 . The euro was down 0.2% on the day at $1.0928, while the dollar index , which tracks the greenback against a basket of currencies of other major trading partners, was up 0.2% at 102.51. The dollar index hit a five-month low in December, with investors betting the Fed would cut rates sooner rather than later. Oil prices climbed around 2% amid ongoing worries over the Middle East crisis. Brent crude futures settled $1.47, or 1.9%, higher at $77.59 a barrel, while U.S. West Texas Intermediate crude (WTI) ended $1.47, or 2.1%, higher at $72.24. Spot gold was steady at $2,028.95 per ounce. https://www.reuters.com/markets/global-markets-wrapup-1-2024-01-09/

2024-01-09 06:11

ZURICH, Jan 9 (Reuters) - The Swiss National Bank (SNBN.S) posted an annual loss of 3 billion Swiss francs ($3.54 billion) for 2023 on Tuesday, as a result of interest rate hikes designed to combat inflation. Switzerland's central bank made a loss of 8.5 billion francs from its Swiss franc positions, provisional figures show, largely due to the higher interest rates paid to banks which lodge money with it overnight. The SNB increased its policy interest rate twice in 2023 to 1.75% as it sought to combat inflation, but this led to it paying out more to holders of sight deposit accounts. Although the amount of money lodged overnight fell last year as the SNB sold foreign currencies, there was still 463 billion francs held in sight deposit accounts at the end of 2023. The overall 3 billion franc loss came despite the SNB making a profit of around 4 billion francs on its foreign currency positions, and a valuation gain of 1.7 billion francs from its gold holdings. Although the performance was better than the record 133 billion franc loss a year earlier, the SNB said it would not be making a payment to the Swiss central or local governments, nor pay a dividend to investors. After 10.5 billion francs was paid to its currency reserves, and taking into account last year's negative distribution reserve of 39.5 billion, the SNB said it expected its running net loss for 2023 to be around 53 billion francs. The exact breakdown of the SNB's profit and losses will be published when it publishes definitive numbers on March 4. Still, the loss will not have any impact on monetary policy, said UBS analyst Alessandro Bee, who estimated the SNB paid around 2 billion francs a quarter due to interest rate payments. "The first priority of the SNB is its monetary policy and its balance sheet is purely there to support it," said Bee. With the Swiss inflation easing and pressure on manufacturers from the recent strength of the Swiss franc, Bee expects the SNB to cut rates first in June, before two more rate cuts of 25 basis points in the second half of 2024. ($1 = 0.8475 Swiss francs) https://www.reuters.com/business/finance/swiss-national-bank-posts-annual-loss-3-billion-swiss-francs-2024-01-09/

2024-01-09 05:32

A look at the day ahead in European and global markets from Kevin Buckland Asian stocks followed Wall Street higher on Tuesday, boding well for Europe, with Japan's Nikkei 225 standing out for a push to its highest since the "bubble economy" of the late 1980s and early 1990s. Tech shares continued their outperformance, supported by an overnight easing in U.S. Treasury yields after a New York Fed survey of inflation expectations produced the lowest reading in two years. Fedspeak also helped sentiment, with Governor Michelle Bowman retreating from her persistently hawkish view. She now sees policy as "sufficiently restrictive" and signalled her willingness to support eventual rate cuts. Atlanta Fed President Raphael Bostic said his bias was to keep policy tight, but repeated his view that rate cuts are likely this year. The all-important U.S. CPI data on Thursday will be the key test this week of whether the market momentum can be maintained. Japanese investors were greeted with consumer inflation figures for the capital Tokyo on their return from a long weekend, and if anything, a continued cooling in price gains gives the Bank of Japan yet another reason to refrain from any hawkish gestures at its policy meeting later this month. The New Year's Day earthquake on Japan's western coast had already cleared away most remaining bets for a shock stimulus exit on Jan. 23. At least 168 lives had been claimed as of Monday, with more than 300 people still missing. Despite that, the yen was the strongest major currency in Asia on Tuesday, climbing about 0.4% against the dollar, which remained resilient against its other major peers. Long-term Treasury yields, which tend to drive the currency pair, did pull back overnight after reaching their highest since mid-December late last week, but were still firmly above 4%. Meanwhile, stimulus expectations were stirring in Beijing, after a PBOC official was quoted by state media as saying policy tools would be used to support reasonable growth in credit. Key developments that could influence markets on Tuesday: -Germany industrial production (Nov) -Euro area unemployment rate (Nov) https://www.reuters.com/markets/global-markets-view-europe-2024-01-09/

2024-01-09 05:19

BEIJING, Jan 9 (Reuters) - China's crude oil production rose to 208 million metric tons in 2023, equivalent to 4.16 million barrels per day, state broadcaster CCTV said on Tuesday. The figure, which according to Reuters' calculations is a 1.6% increase on 2022 output levels, represents an anticipated slowdown in production growth, as China's national oil companies are pushed to tap deeper, more challenging reserves to boost production. China's domestic oil production averaged 2% annual growth between 2018 and 2022, Reuters records show, as Beijing has sought to step up output amid an energy security drive. Oil production in China fell by around 12% between 2015 and 2018, as output at mature onshore fields slipped. Offshore production has accounted for more than 60% of the country's production increases for the last four years, the CCTV report said. Domestic natural gas production reached 230 billion cubic metres in 2023, the CCTV report said, representing a 5.6% increase over 2022 levels. https://www.reuters.com/markets/commodities/chinas-oil-production-rises-208-mln-tons-2023-cctv-2024-01-09/