Bitcoin Falls as Trade War Worries Weigh — Market Talk

0856 GMT - Bitcoin falls as global trade war fears weigh on risky assets. President Trump imposed 25% tariffs on Canadian and Mexican imports along with an additional 10% levy on Chinese goods Tuesday. The news dents risk appetite and prompts bitcoin to retrace the previous day's gains after Trump announced plans for a U.S. cryptocurrency strategic reserve. Trump said the reserve would include bitcoin, ethereum and lesser-traded tokens. "This raises questions about whether the [Trump] administration will seek to use its reserves to stabilize crypto markets, thereby driving uptake and potentially lessening the power of the Federal Reserve in managing overall financial liquidity," Rabobank strategist Benjamin Picton says in a note. Bitcoin falls 1.8% to $83,726, according to LSEG. ([email protected])0833 GMT - The U.S. equities market could see further volatility until Washington pauses its trade war with the rest of the world, OCBC analysts write in a note. Overnight, Trump signed an order to impose 25% tariffs on imports from Canada and Mexico as well as an additional 10% on those from China. This led to a sell-off on Wall Street, with the S&P down 1.76% while 10-year treasury yields fell to 4.13% from 4.20%. The Federal Reserve is unlikely to cut interest rates this year if tariffs boost inflation, they add. OCBC expects U.S. GDP growth to slow from a strong 2.8% last year to a solid 2.2% this year, while China's growth is anticipated to drop to 4.2% from 5.0%. OCBC forecasts U.S. tariffs of 20% imposed for a full year may shave up to 1 percentage point from China's GDP growth. ([email protected]; @ivy_jiahuihuang)0733 GMT - European stocks are expected to open lower after President Trump imposed a 25% tariff against Canadian and Mexican imports that takes effect Tuesday. An additional 10% tariffs on Chinese goods was also implemented. A 25% tariff is expected to hit European imports in the foreseeable future, Swissquote Bank analyst Ipek Ozkardeskaya says in a note. "Hence, markets have been nervous since [Monday]." Meanwhile, the U.S. is suspending military aid to Ukraine after Trump and his Ukrainian counterpart Volodymyr Zelensky clashed over peace talks Friday. IG futures data show the DAX opening down 0.9%, the CAC 40 falling 0.9%, and the FTSE 100 dropping 0.6%. ([email protected])