2023-12-12 06:14

Dec 12 (Reuters) - (This Dec. 12 story has been corrected to fix the spelling of Kelvin Koh's name in paragraph 3) If 2022 was the year that "broke bitcoin", 2023 has been the year of trauma recovery. Bitcoin has bounced pluckily in the face of depressed crypto prices, low trading volumes and tough economic conditions. It even found a second wind in October following a summer slump. "We've had a nice recovery, but we're just in the cusp of the new cycle," said Kelvin Koh, co-founder and managing partner at investment firm Spartan Group. Indeed, 2023 has been a surprisingly good year for bitcoin. The king of cryptocurrencies has leapt 164% since Jan. 1 and is trading above $40,000. It has outpaced traditional assets, including gold which has risen 10% and the S&P 500 (.SPX) which has gained 20%. Bitcoin also increased its share of the total cryptocurrency market, from 38% to above 50%, according to CoinGecko data. The overall crypto market cap has swelled to $1.7 trillion from $871 billion at the end of 2022, with ether's price jumping 95%. Much of bitcoin's gains came later in the year as a potential U.S. spot bitcoin exchange-traded fund (ETF) and hopes of easier monetary policy renewed investor energy. Trading volumes have picked back up too, with the combined spot and derivatives trading volume on centralized exchanges hitting $3.61 trillion in November, up from about $2.9 trillion in January, according to CCData. Meanwhile, stablecoins - cryptocurrencies whose value is pegged to a real world asset like the dollar - have also grown. Tether, the largest such coin, has seen its market cap soar to an all time high of over $90 billion. FALL OF TITANS After a torrid 2022 saw the downfall of FTX and Sam Bankman-Fried, 2023 has seen more crypto giants come a cropper. Binance chief Changpeng Zhao, plead guilty to breaking U.S. anti-money laundering laws, most notably, part of a multi-billion dollar settlement with regulators. The co-founder of Voyager Digital also found himself on the wrong end of American regulatory action, while Celsius founder Alex Mashinsky was arrested in the U.S. in July, pleading not guilty to criminal counts including securities fraud. And not forgetting SBF - after a whirlwind trial, the former industry poster child was convicted of fraud in November. On a brighter note, Ripple's XRP token clocked gains of 82% for the year after a key legal victory for the industry when a U.S. judge ruled Ripple Labs' sales of the token on public exchanges did not violate securities law. BITCOIN IN 2024 Most of bitcoin's 55% run in the fourth-quarter has been attributed to bets that a spot bitcoin ETF will be approved in the U.S. and pull in money from retail and institutional investors alike on the ease of gaining exposure to the digital asset on a regulated stock exchange. Asset management giants like BlackRock and Fidelity are among the 13 companies that have submitted applications to the U.S. Securities and Exchange Commission for the multi-billion dollar product. Such a fund is expected to pull in as much as $3 billion from investors in the first few days of trading and billions more thereafter. Not everyone is as bullish though. J.P.Morgan expects the crypto market recovery to continue through the expected approval in early 2024, however, remains skeptical of the magnitude of success in adoption that broader market is pricing in. JPM expects the bitcoin ETFs to pull in assets in the low or low to mid-single digit percentage range of the $1.7 trillion crypto market compared with some optimistic outlooks of 10%. If adoption falls short of investor expectations of around 10%, crypto markets could reverse their recent gains, it said. To some market watchers, though, it looks like the current bitcoin recovery is still in early stages. The net dollar-denominated realized profit locked in by bitcoin investors has reached $324 million per day, which remains an order of magnitude below the peaks experienced during the later stages of the 2021 bull market, which eclipsed $3 billion a day, according to analytics platform Glassnode. This suggests bitcoin's current performance remains very much within the bounds of an early rather than a late-stage bull market, Glassnode said. https://www.reuters.com/technology/cryptoverse-bitcoin-defies-its-doubters-2023-2023-12-12/

2023-12-12 06:05

WASHINGTON, Dec 12 (Reuters) - Ukrainian President Volodymyr Zelenskiy on Tuesday plans a last-ditch plea to U.S. lawmakers to keep military support flowing as he battles Russia, in visits to the White House and Capitol Hill. Heading into winter, with tens of thousands of Ukrainians dead, a yawning budget deficit and Russian advances in the east, Zelenskiy is scheduled to press U.S. lawmakers to replenish nearly depleted funding, before meeting with President Joe Biden. "If there's anyone inspired by unresolved issues on Capitol Hill, it's just (Russian President Vladimir) Putin and his sick clique," Zelenskiy said at a speech in Washington on Monday to a U.S. military audience. Newly declassified U.S. intelligence shows that "Russia seems to believe that a military deadlock through the winter will drain Western support for Ukraine" and ultimately give Russia the advantage despite Russian losses, said Adrienne Watson, spokesperson for the White House National Security Council. Ukraine is having success stopping Russian forces but Putin is continuing to order his troops forward despite heavy losses of troops and equipment since October, she added. There are just three days before Congress recesses for the year on Friday, and Republicans in the House of Representatives have until now refused to pass a $106 billion supplemental bill that contains Ukraine aid without unrelated, fiercely disputed changes to U.S. immigration. Putin, who said last week he would run for president again in 2024, is betting he can outlast Western aid and attention to score a major strategic victory against the West, Zelenskiy and Biden aides believe. The view is shared by European lawmakers who will send their own last-minute plea to Congress Tuesday. Biden has cast the situation in stark terms, saying "history is going to judge harshly those who turn their back on freedom's cause." Ultimately, U.S. troops could be forced to fight Russia, Biden and others warn, if an unchecked Putin invades a European ally covered by NATO's mutual defense commitments. U.S. House Speaker Mike Johnson, a Republican, said in a letter to the Biden administration released last week that lawmakers need more detail on the administration's objectives in Ukraine and linked the issue to immigration. "President Biden must satisfy Congressional oversight inquiries about the Administration's failure thus far to present clearly defined objectives, and its failure to provide essential weapons (for Ukraine) on a timely basis," Johnson wrote. He added that "supplemental Ukraine funding is dependent upon enactment of transformative change to our nation's border security laws." The White House told Congress on Dec. 4 the government will no longer have funding to provide more weapons for Ukraine after the end of the year. Congress approved more than $110 billion for Ukraine since Russia's February 2022 invasion but no new funds since Republicans took over the House from Democrats in January. UKRAINE INFRASTRUCTURE Bolstered by billions of dollars in U.S. arms, humanitarian aid and intelligence, Ukraine was able to fend off Russia's initial attempt to sweep the country. But Kyiv failed to break through Russian defensive lines in a major counteroffensive push this year and Russia is now on the offensive in the east. "As winter approaches, we're seeing now increased missile and drone attacks by the Russian armed forces against civilian infrastructure," said White House spokesperson John Kirby on Monday. "We expect that that will continue, particularly against energy infrastructure." Some Republicans, particularly those with the closest ties to former President Donald Trump, oppose more Ukraine aid, and are asking about the war aims and how U.S. money is being spent. It was left out of a stopgap funding bill Congress passed in October to keep the government open. Both the war and immigration issues are expected to be lightning-rod issues ahead of the 2024 U.S. presidential and congressional elections. Trump and Biden are both seeking the presidency. About 41% of U.S. adults polled by Reuters/Ipsos last month backed sending weapons to Ukraine, compared to 32% who were opposed and the rest unsure. Zelenskiy, now on the second day of his trip to Washington, is expected to address U.S. senators at 9 a.m. local time (1400 GMT). He will not address the House, but will meet privately with Johnson. Biden and Zelenskiy will hold a joint press conference at 4:15 p.m. local time (2115 GMT). On the eve of Zelenskiy's visit to Capitol Hill, Senate Republicans expressed dwindling hopes they can reach a border deal with Democrats and pass the supplemental package this week. "I'm becoming increasingly pessimistic," Senator Susan Collins, the top Republican on spending, told reporters. Biden asked Congress for $61.4 billion in Ukraine-related funding in October, including weapons, economic assistance and humanitarian aid. A linked request would provide billions more for Israel's military, too. https://www.reuters.com/world/europe/zelenskiy-makes-11th-hour-plea-ukraine-war-funds-washington-2023-12-12/

2023-12-12 05:57

NEW YORK, Dec 12 (Reuters) - The dollar fell on Tuesday before the Federal Reserve officials give updated economic and interest rate projections after their latest policy meeting on Wednesday. The greenback pared losses, however, after data showed that some areas of inflation remained relatively elevated in November even as price pressures were broadly as expected. Traders are pricing in the prospect of an interest rate cut as soon as May, which was pushed back from March after stronger than expected jobs gains on Friday. But some analysts see that as still likely too optimistic. Data on Tuesday showed that U.S. consumer prices unexpectedly rose in November as a decline in the cost of gasoline was more than offset by increases in rents. So-called supercore inflation, which tracks the cost of services minus energy and housing, was also elevated. "Once we dig into the data we can see that some of the underlying numbers are perhaps a little sticky, particularly the supercore numbers," said Shaun Osborne, chief foreign exchange strategist at Scotiabank in Toronto. "Generally we’ve seen sufficient progress on inflation to keep a rate cut as the next move, but it’s really about the timing at this point and these numbers suggest that we still need to see some further progress on some of these underlying measures before the Fed will be comfortable cutting interest rates," Osborne added. Investors will focus on how Fed officials see the economy holding up and where they see interest rates over the coming quarters when the U.S. central bank concludes its two-day meeting on Wednesday. "The changes in the Fed's forecasts should be significant, reflecting the more resilient economy than expected, the still tight labor market, the cooling in inflation, and that last 25 bp hike to 5.625% that had been plugged into the dots," analysts at Action Economics said in a note on Tuesday. Traders will also be watching to see if Fed Chairman Jerome Powell pushes back against the prospect of interest rate cuts in the first half of 2024. The dollar was last down 0.19% on the day against a basket of currencies at 103.85. It got as low as 103.48 immediately after the data, before bouncing. The greenback had dropped before the inflation data as traders positioned for a dovish number. The euro was last up 0.24% at $1.0790. It was around $1.0809 before the data. The greenback fell 0.40% to 145.60 Japanese yen , after earlier getting as low as 144.75. The yen has been volatile on speculation that the Bank of Japan may be closer to ending its negative rate policy. Hopes that this may occur as soon as next week were dashed after Bloomberg reported on Monday that BOJ officials see little need to rush as they have not seen enough evidence of wage growth to justify sustainable inflation. Later this week the European Central Bank, Bank of England, Norges Bank and the Swiss National Bank all meet, with Norway considered the only which could potentially raise rates. There is also a risk the SNB could dial back its support for the franc in FX markets. In cryptocurrencies, Bitcoin dipped 0.01% to $41,213 . ======================================================== Currency bid prices at 3:00PM (2000 GMT) https://www.reuters.com/markets/currencies/yen-hands-back-gains-dollar-waits-cpi-2023-12-12/

2023-12-12 05:33

A look at the day ahead in European and global markets from Ankur Banerjee UK labour market data on Tuesday will take centre stage as Europe wakes up, with traders trying to gauge just how much inflationary pressure remains in Britain's economy ahead of a Bank of England meeting on Thursday. The spotlight will then turn to U.S. inflation later in the day as the Federal Reserve kick starts its two-day policy setting meeting that will make or break expectations around rate cuts next year. Wages in Britain, excluding bonuses, in the three months to October are expected to slow to a 7.4% rise, analysts estimate, compared with a 7.7% rise in September. The data will likely keep the central bank on guard for inflationary pressures. While the BOE is expected to keep rates steady on Thursday, the focus is on when and how fast it will cut rates. Traders expect the British central bank to cut rates at a slower pace than the Fed. Investors have slightly dialled back their expectations of the Fed cutting rates early next year. Markets are now pricing in a 45% chance of a rate cut in March compared with 57% a week earlier, according to CME FedWatch tool. And that brings us to 2023's final central bank bonanza, with investors bracing for policy decisions from the European Central Bank, Norges Bank and the Swiss National Bank apart from the BOE and the Fed. All that has meant investors have been cautious this week, with MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) up 0.5%, while the dollar drifted lower, with the yen recouping some of its steep overnight losses. Futures indicate European bourses are set for a muted start. In corporate news, "Fortnite" maker Epic Games has prevailed in its high-profile antitrust trial over Alphabet's Google (GOOGL.O) in a ruling that if it holds could upend the entire app store economy. French drugmaker Sanofi (SASY.PA) will be in focus after it announced it was terminating a deal to exclusively license a drug that Maze Therapeutics is developing to treat Pompe disease because of objections from the U.S. government. Key developments that could influence markets on Tuesday: Economic events: UK ILO unemployment rate for Oct; data on UK average earnings in the three months to October https://www.reuters.com/markets/global-markets-view-europe-2023-12-12/

2023-12-12 05:23

MUMBAI, Dec 12 (Reuters) - The Indian rupee edged higher on Tuesday, with traders anticipating a narrow trading range as they await a closely watched U.S. inflation report and the outcome of the Federal Reserve meeting. The rupee was at 83.3650 against the U.S. dollar as of 10:15 a.m. IST, up 0.03% from its previous closing at 83.3925. The dollar index was little changed at 103.97, while most Asian currencies retreated, with the Thai baht leading losses, down by 0.8%. "The rupee seems locked in a remarkably narrow trading range, requiring significant events or substantial flows to prompt a reversal," said Amit Pabari, managing director at foreign exchange advisory firm CR Forex. The rupee has oscillated between 83.2475 and 83.40 so far in December. The Reserve Bank of India has intervened multiple times to limit the rupee's losses near 83.40, traders said. "Not expecting much action today (on the rupee)," ahead of the U.S. inflation data and the Fed's policy outcome, a forex trader at a private bank said. Consumer inflation data in the U.S., due on Tuesday, is expected to show that core CPI rose to 0.3% month-on-month in November, up from 0.2% in October, according to a Reuters poll. Meanwhile, the Fed is expected to keep rates unchanged on Wednesday. However, investors will be keeping an eye on the Fed's projections and commentary for cues on the future policy rates. Fed futures are currently pricing in about 125 bps of rate cuts through 2024, according to CME Group's FedWatch tool. India will also report retail inflation data on Tuesday with expectations that year-on-year CPI rose to 5.70% in November, up from 4.87% in October, according to a Reuters poll. https://www.reuters.com/markets/currencies/rupee-inches-up-may-tiptoe-tight-range-ahead-us-cpi-fed-outcome-2023-12-12/

2023-12-12 04:45

LAUNCESTON, Australia, Dec 12 (Reuters) - China's steel output is expected to rise for the first year in three in 2023 as a soft domestic property sector is compensated by strong vehicle manufacturing and rising exports. China, which makes about 55% of the world's steel, produced 874.7 million metric tons in the first 10 months of the year, up 1.4% from the same period in 2022, according to official data. Figures from the China Iron and Steel Association suggest November output was about 76.3 million metric tons, bringing the total for the first 11 months to around 951 million. Assuming December's production is at least 75 million metric tons, the annual total is likely to come in around 1.026 billion, which would be higher than the 1.01 billion in 2022. China's steel output has held above 1 billion metric tons since first crossing the mark in 2020, when a record 1.053 billion was produced. Since the all-time high Beijing has placed an informal target that annual steel output should not exceed what was produced in the previous year. While 2023's expected production is likely to be only modestly higher than that of 2022, it's perhaps surprising given the travails of the property sector. Property construction accounts for about 35% of China's steel demand and the sector has been plagued this year by major developers experiencing liquidity crunches and falling sales, with sales by floor area declining 7.8% in the first 10 months of the year from the same period in 2022. However, hopes of a revival in coming months have been sparked by Beijing's moves to stimulate the sector by easing lending requirements, with sentiment further buoyed by a slight rise in new home prices in November, the third straight monthly gain. But it's outside of property that steel has performed better in 2023, with China's automobile production hitting a record high in November of 3.093 million units, up 7% from October and 29% from November last year. CARS, EXPORTS Industrial output rose 4.6% year-on-year in October, the strongest gain since April and an acceleration from the 4.5% pace in September, while infrastructure investment climbed 5.9% on the first 10 months of the year from the same period in 2022. Machinery, infrastructure and vehicles account for just under 50% of China's steel demand, and these sectors are all showing solid growth. China is also exporting more steel products, with shipments in the first 11 months of the year totalling 82.66 million metric tons, up 35.6%, or 20.71 million tons, from the same period last year. It's also likely that Beijing has been willing to see steel mills boost overall production in 2023 from 2022 levels as it helps lift economic growth, which has been struggling to gain momentum since China ended its strict zero-COVID-19 policy at the end of last year. Steel prices have also recovered in recent weeks, with rebar futures in Shanghai ending at 4,037 yuan ($562) a metric ton on Monday. This is below the recent closing peak of 4,069 yuan a metric ton on Nov. 21, but also 11.4% higher than the recent five-month low of 3,632 yuan on Oct. 23. Rebar inventories, as monitored by consultants SteelHome, dropped to 3.49 million metric tons in the week to Dec. 8 from 3.55 million previously. Rebar stockpiles usually drop heading into the northern winter, but the current level is below the 3.65 million from the same week in 2022 and the 4.20 million in 2021. This suggests that steel mills may have room to increase output early in the new year, especially if they expect the property sector to continue its so far tentative turnaround. The opinions expressed here are those of the author, a columnist for Reuters. https://www.reuters.com/markets/commodities/china-2023-steel-output-set-rise-despite-property-woes-russell-2023-12-12/