Bitcoin Could Stay Elevated if Trump Delivers Favorable Regulation — Market Talk
1025 GMT - Bitcoin is likely to remain elevated given the prospect of a more favorable regulatory and political environment under U.S. President Trump, Deutsche Bank analyst Marion Laboure says in a note. "While Trump abstained from signing executive orders around digital assets on day one, Tuesday's announcement that the [Securities and Exchange Commission] will start a regulatory framework for crypto assets is his administration's first step towards a crypto-regulatory overhaul," she says. Bitcoin should also benefit from looser Federal Reserve monetary policy and could see increased institutional investor adoption, she says. Bitcoin falls 2.1% to $101,874 after hitting a record high of $109,071 on Monday, according to LSEG. ([email protected])1016 GMT - The EU should redirect unspent money from some of its funding programs, including a scheme to help member states recover from the economic impact of the Covid-19 pandemic, toward its own defense, Polish Foreign Minister Radoslaw Sikorski tells the World Economic Forum in Davos, Switzerland. Acknowledging that there is resistance in parts of the 27-member bloc to increase taxes to buy weapons, he says: "We certainly could make our own resources of the EU bigger to service the Covid-era loans and to address a new emergency, which is defense. We also have huge amounts of money squirreled away from unspent programs, including the money that member states have not spent from the Covid recovery funds. There are some low-hanging fruits as it regards to money." ([email protected])1012 GMT - Even modest economic growth in 2025 should limit any rise in U.K. insolvencies, Pantheon Macroeconomics economists say in a note. They point to recent data showing U.K. monthly insolvencies have declined back towards pre-pandemic levels. "Surge in insolvencies is over, and corporate distress is low," they say. ([email protected])1009 GMT - NATO countries need to ramp up their spending on defence in order to counter the threat of Russia, the alliance's secretary general Mark Rutte says at the World Economic Forum in Davos, Switzerland. Despite not being currently at a stage of "hard war," countries must to get into the war mindset as the defense industry lags Russia in terms of ammunition output, he notes. Spending commitments are needed now to ensure NATO countries are safe in five years time, Rutte says, adding that investment needs to be above 2% of GDP with a focus on innovation and large, efficient contracts. ([email protected])1007 GMT - Spain is set to continue growing faster than the Eurozone because of labor dynamics and the energy sector, Carlos Torres Vila, Chair of Spanish bank BBVA, tells a World Economic Forum panel in Davos, Switzerland. Immigration, mostly from Latin America, has benefited Spain's economy as around 600,000 people have been entering the labor market annually and made it very strong, he says. "We can grow because there are more people, and that's a lesson for Europe." Spain also has an advantage on the energy side, with reliable sunshine having brought in significant investment. "This is likely to be a trend going forward," he says. ([email protected])0954 GMT - The situation for Ukraine is more favorable now than 24 hours ago. This is thanks to U.S. President Donald Trump's "ultimatum" to Russian President Vladimir Putin, urging him to negotiate a cease-fire deal or face high sanctions and tariffs, Polish Foreign Minister Radoslaw Sikorski tells the World Economic Forum in Davos, Switzerland. Every time Russia has lost a war, the country has undergone reforms, he says. He argues that a Russian defeat would be important for the Russian people, as well as for Ukraine and Europe's security architecture. Ukraine has the means to resist Russia's attacks this year, following an increase in military deliveries from its allies, Sikorski adds. ([email protected])0952 GMT - Europe needs to push forward with a capital markets union, Carlos Torres Vila, Chair of Spanish bank BBVA, tells a World Economic Forum panel at Davos, Switzerland. Torres Vila says that it is clear there is an investment gap and that Europe needs to invest in the digital and energy transitions and the modernizing of infrastructure. This investment needs to be financed through the capital markets, which play a minor part today as around 75% of financing comes from banks. Europe needs to push forward with the capital markets union so that its large savings don't get channeled to other places such as the U.S. and stay in Europe and invested in European projects, he says.([email protected])0942 GMT - The Norwegian krone falls after the Norges Bank confirmed that it expects to start cutting interest rates in March. Norway's central bank left its policy rate at 4.5%, as widely expected. It said restrictive monetary policy is still needed to stabilize inflation around target but that the time to begin easing monetary policy is soon approaching. "We think the path of inflation will allow the Bank to move a bit more quickly, cutting by 25bp once per quarter until the policy rate reaches 3% in the middle of 2026," Capital Economics economist Jack Allen-Reynolds says in a note. EUR/NOK rises to 11.7552 after the decision, from 11.7484 beforehand. ([email protected])0935 GMT - The euro's upside potential looks limited given unfavorable U.S.-eurozone interest-rate differentials, MUFG Bank's Lee Hardman says in a note. The Federal Reserve has adopted a more cautious approach to delivering further rate cuts compared to the European Central Bank, he says. The widening policy divergence between the ECB and Fed should the euro under selling pressure versus the dollar at the start of this year, he says. The market is pricing in 39 basis points of Fed rate cuts for this year compared to 94bp for the ECB, according to LSEG. The euro is flat at $1.0403, having hit a 3-week high of $1.0459 on Wednesday, according to FactSet. ([email protected])0931 GMT - President Trump's intentions regarding the Panama Canal remain unclear, according to Capital Economics' Ariane Curtis. "It could be that he is serious in his threat of retaking control," the economist says. "But some of his recent comments suggest that he may instead be looking for concessions, such as lower fees charged to the U.S. for using the canal or less Chinese ownership of ports along the trade corridor." Even if the U.S. did reclaim control of the waterway, it is unlikely that this would have significant implications for the global economy or inflation, as only about 5% of global sea trade volumes transit through the canal, Curtis says. ([email protected])0902 GMT - Oil prices continue to be volatile in early trade amid uncertainties over the impact of U.S. President Donald Trump's energy policies and proposed tariffs on the market. Brent crude and WTI both rise 0.1% to $79.06 and $75.51 a barrel, respectively, after opening the session lower. "Most of his policies could ultimately tighten the oil market," ANZ Research's Daniel Hynes and Soni Kumari say, citing Trump's plans to refill strategic reserves, potentially place more sanctions on Russia and stop buying oil from Venezuela. Meanwhile, U.S. trade tariffs could end up hurting global growth, dampening demand. "More details on his policies are needed to fully understand their impacts on the oil market," the strategists say. ([email protected])0856 GMT - The Monetary Authority of Singapore could ease its policy settings Friday, after data showing core inflation fell below 2% for the second straight month, say Maybank analysts in a note. Core inflation cooled to 1.8% on year in December, down from November's 1.9%. Headline inflation was 1.6% last month, unchanged from November. With inflation comfortably below 2%, the analysts expect the MAS to ease via a slight reduction of the Singapore dollar nominal effective exchange rate slope. However, Maybank expects the central bank to maintain the width and center of the Singapore dollar NEER band. The MAS's monetary policy is centered on Singapore's exchange rate. ([email protected])