0849 GMT – Bitcoin spikes to a new record high, fueled by expectations that incoming U.S. President-elect Donald Trump will champion the cryptocurrency sector, according to Swissquote Bank. Trump is anticipated to replace crypto-opposing officials with regulators more favorable to digital assets, which could allow the U.S. crypto industry to flourish, notes Swissquote analyst Ipek Ozkardeskaya in her report. “Clear, strong policies would make it easier for banks to integrate cryptocurrencies, attracting substantial institutional investments,” she adds. With Bitcoin’s limited supply, growing demand could push prices higher, Ozkardeskaya says. Market watchers now look toward the $100,000 milestone as Bitcoin reaches $89,982, according to LSEG. ([email protected])
0849 GMT – Yields on U.K. government bonds, or gilts, increase as higher-than-expected wage growth data in the U.K. raises projections for sustained elevated interest rates. Earnings growth averaged 4.8% excluding bonuses from July to September, beating the 4.7% forecast by economists in a WSJ survey. “We anticipate the BOE will maintain caution and keep rates unchanged in December, with cuts possibly resuming in February,” says ING economist James Smith. The 10-year and 2-year gilt yields both rose 3 basis points, reaching 4.451% and 4.449%, respectively, Tradeweb data indicates. ([email protected])
0849 GMT – Oil prices remain steady in early European trading after being pressured in the previous session due to disappointment over China’s economic stimulus efforts and a stronger U.S. dollar. Brent crude and WTI rise slightly by 0.1% to $71.93 and $68.14 per barrel, respectively. “The ongoing strength of the USD following the U.S. election is creating significant headwinds for oil and broader commodities,” ING analysts Warren Patterson and Ewa Manthey comment. Traders now await monthly oil-market reports from OPEC and the IEA, as any downward adjustments in demand-growth forecasts could dampen market sentiment. ([email protected])
0828 GMT – The British pound weakens as data reveals that the U.K. unemployment rate rose higher than expected, and wage growth decelerated, although slightly less than forecasted. Unemployment increased to 4.3% over the three months leading up to September from 4% in the prior quarter. Excluding bonuses, average earnings rose by 4.8% annually, just above the expected 4.7%. “The higher unemployment rate might prompt markets to consider an increased likelihood of a BOE rate cut next month,” XTB’s Kathleen Brooks comments. GBP/USD falls to a three-month low of 1.2800 following the data, down from 1.2825 prior, according to FactSet. EUR/GBP also rises to 0.8303 from 0.8294. ([email protected])
0820 GMT – U.K. wage growth will likely remain elevated, keeping inflation high and prompting caution from the Bank of England, says ING economist James Smith. Although average weekly earnings eased somewhat over the July-September period, they are still elevated, Smith notes. Rising unemployment notwithstanding, regular pay may continue to increase at a rate of around 4% per year until mid-next year, he suggests. With both wage growth and services inflation stubbornly high, the BOE is expected to hold off on rate cuts in December, with the next potential cut coming in February. ([email protected]; @joshualeokirby)
0816 GMT – The Bank of England is expected to gradually reduce interest rates, bolstered by signs of a cooling labor market, according to Paul Dales from Capital Economics. Ongoing issues with the monthly labor force survey mean that the bank will likely downplay the rise in the unemployment rate to 4.3% from 4.0%. Instead, it will focus on declining payrolls—showing a fifth decrease in seven months—and fewer job vacancies. This outlook suggests that the BOE may skip a rate cut in December but could resume cuts in February. ([email protected])
0805 GMT – The dollar climbs to a four-month peak, driven by expectations of a Republican sweep securing both houses of Congress and the White House, UBS Global Wealth Management reports. “The anticipated ‘red sweep’ has reignited the ‘Trump trade,’ lifting equities, bond yields, and the dollar,” UBS analysts state. The so-called Trump trade is based on the idea that his proposed policies, such as trade tariffs, could boost inflation, causing the Federal Reserve to hold off on deep interest rate cuts. The DXY dollar index reaches a high of 105.824. ([email protected])
0747 GMT – Moderating U.K. wage growth is keeping the Bank of England on course for a gradual schedule of rate cuts, says Kyle Chapman from Ballinger Group. Wage growth, excluding bonuses, decreased to 4.8% in the quarter ending in September, down from 4.9% in the previous three months. Although the wage growth figures were slightly above expectations, they still support the case for further quarterly rate cuts, Chapman states. Indeed, the labor market appears poised for further easing, with the latest data marking the 28th consecutive report showing a decline in vacancies. ([email protected])
0744 GMT – China’s economic stimulus push since September is projected to drive growth to 5.0% for 2024 and 2025, according to DBS economists. Exports are likely to remain robust as global demand holds steady, though new U.S. tariffs could cut up to one percentage point from GDP growth, say economists Mo Ji and colleagues. Consumption is expected to stay muted due to falling property prices and higher unemployment. Key risks focus on the property market, where DBS sees strong stimulus measures on both demand and supply sides, such as inventory destocking, aiding in stabilization. With a weakened economy and trade tensions, comprehensive support measures are crucial, DBS notes, highlighting the need for effective, well-executed policy rather than sheer volume. ([email protected])
0743 GMT – Thailand’s economy is set to strengthen, with growth expected to rise to 3.1% in 2025 from an estimated 2.6% in 2024, Fitch Ratings analysts say. A rebound in tourism, increased government spending, and higher private consumption are expected to support stronger growth. Analysts project that by 2025, tourism could return fully to pre-pandemic levels, supported by favorable policy measures. However, risks remain, including possible weakened global demand, geopolitical tensions, and uncertainty regarding the U.S. post-election trade strategy. ([email protected])
0727 GMT – The long-term trend in bond yields remains upward, according to KBC Bank analysts. Markets are pricing in increased fiscal stimulus globally, which contributes to growth and inflation. “These short-term, growth-focused measures come with a higher credit premium as well,” they add. Following the holiday, the 10-year U.S. Treasury yield holds steady at 4.34%, unchanged since Friday, according to Tradeweb. ([email protected])
0710 GMT – Bond market liquidity and volatility are expected to increase as the U.S. and France return from long weekends, reports Christoph Rieger from Commerzbank Research. In the Eurozone, investors are focusing on Germany’s ZEW business sentiment index, the first survey after recent political developments, which analysts expect to show positive shifts in both current and future outlooks. Germany’s 10-year Bund yield opens flat at 2.32%. ([email protected])
