Bitcoin Falls From Record High on Initial Disappointment With Trump Agenda — Market Talk

0729 GMT - Bitcoin falls back, having hit a record high Monday, on initial disappointment that President Trump didn't announce more plans to boost the crypto market at his inauguration, says CMC Markets' Jochen Stanzl in a note. "There were probably one or two investors who had hoped for more. It seems that Trump is prioritising issues other than supporting the crypto industry." However, it would only take "a positive word" from Trump and bitcoin could rise significantly again, he says. Bitcoin falls 0.3% to $102,291, dropping away from a record high of $109,072, LSEG data show. ([email protected])0720 GMT - The dollar falls against a basket of currencies as U.S. President Donald Trump's inaugural speech didn't envisage immediate trade tariffs. However, "the U.S. dollar could see some swings before policy on trade is confirmed by the U.S. administration," Schroders says in a note. At the end of 2024, multiple factors combined to send the dollar higher. "These factors included expectations of higher interest rates in the U.S. relative to other major central banks, as well as higher U.S. growth compared to other regions," the asset manager says. The DXY U.S. dollar index falls 0.8% to 108.545. ([email protected])0719 GMT - ​The risk to U.S. rates is no longer substantially skewed to the downside, MFS Investment Management says. "It is fair to say that the tactical case for being long duration is not as strong as it used to be just a few months ago," Benoit Anne of MFS IM's strategy and insight group says in a note. The majority of MFS IM's fixed income portfolio managers have revised their market rate projections upwards, he says. In addition, MFS IM's quant investment team rate-forecast, which is based on curve slopes and real yield modelling, takes a neutral view on market rates, Anne says. This supports the notion that caution is probably needed on duration positioning in the period ahead, he says. ([email protected])0704 GMT - The first batch of U.S. President Donald Trump's orders should not stand in the way of a further recovery in German Bunds, says Commerzbank Research's Christoph Rieger in a note. On the other side of the Atlantic meanwhile, U.S. Treasury yields fall as the absence of immediate tariff announcements in Trump's inaugural speech on Tuesday brings relief to bond markets. The 10-year U.S. Treasury yield falls around 6 basis points from Friday--with Monday being a market holiday--to 4.55%, according to LSEG data. Commerzbank Research recommends buying Bund dips with 10-year yields near 2.5%, Rieger says. ([email protected])0703 GMT - Malaysia's 2025 trade outlook appears cautiously optimistic, supported by resilient global economic growth, easing inflation outside the U.S. and lower global interest rates, RHB economist Chin Yee Sian says in a note. Export-oriented industries could benefit from a favorable global environment and a recovering technology cycle, she says. However, potential U.S. protectionist policies under Trump's administration pose risks to global trade flows, she flags. Malaysia's small U.S. trade deficit may limit direct impact, while the country could benefit from China's efforts to reroute manufacturing and export operations, Chin adds.([email protected])0659 GMT - South Korea's benchmark Kospi edged down 0.1% to close at 2518.03, giving up early gains. Foreign investors were net sellers, with the index losing for a third straight session. Electric vehicle battery stocks were among the top decliners after the inauguration of President Trump, who eliminated his predecessor's climate regulations tied to EV production. EV battery makers LG Energy Solution and Samsung SDI fell 4.3% and 3.9%, respectively. Battery-material supplier Posco Future M slumped 9.9%. USD/KRW settled 0.8% lower at 1,439.50 in Seoul onshore trading, after traders digested Trump's tariff comments. South Korea's 10-year government bond yield was down 3.9 bps at 2.829%. ([email protected])0637 GMT - There is upside potential for European equities despite an expected increase in market volatility due to the Trump administration, analysts at Citi bank write. The biggest risks to European equities come from tariffs, increasing U.S. interest rates and a fluctuating U.S. dollar, they say. Should Trump impose broad 10% tariffs, the analyst expect that it would shave off around 1%-2% of European earnings per share. Despite the Trump risks, a resilient global growth and easing price pressures set the scene for around 10% growth in European equities this year, they write. The analysts are more cautious on utilities and small-cap companies as they remain relatively more exposed to rates-related risk.([email protected])0631 GMT - The yield on U.S. 10-year Treasurys could fall below support at 4.505%, says Quek Ser Leang of UOB's Global Economics & Markets Research. The 10-year yield formed a weekly outside reversal bar last week, the markets strategist notes. This, along with weekly stochastics crossing lower from overbought territory, have increased risks of a potential top for the 10-year yield, the strategist says. On daily chart, a bearish divergence was confirmed when moving average convergence divergence indicator turned negative last week. Given increasing downward momentum, a break below 4.505% wouldn't be surprising, and might spark a fall towards rising daily trendline support, which is currently at 4.400%. 10-year Treasury yield is 6 bps lower at 4.5506%. ([email protected])0555 GMT - BNP Paribas economist Ryutaro Kono expects the Bank of Japan to raise interest rates this week if the markets stay calm until the bank's two-day meeting ends Friday. "The final hurdle before a January rate hike was President Trump's inauguration address and his policy announcements after that, but so far there have been no major surprises," he says in a research note. BOJ Gov. Kazuo Ueda has repeatedly said that U.S. economic polices and wage trends in Japan are the most important checkpoints for deciding the next rate increase. BOJ policymakers have grown more confident about domestic wage growth for this year, while they are cautious about market reaction to Trump's remarks.([email protected])0534 GMT - Trump's "flurry of executive action" on his first day in office will set the tone on what to expect from his administration across areas including immigration and energy, Paul Ashworth of Capital Economics writes in a note. While Trump's inauguration address appeared to some as more optimistic than eight years ago, he stressed "America First" and signed nearly 100 executive orders on day one, Ashworth notes. Trump's call to assess China, Canada and Mexico tariffs signal that a 10% universal tariff with 60% tariff on imports from China is still possible, Ashworth says. Trump will likely remain steadfast in his protectionist intentions, even though Trump's closest advisers will want to limit the scope and size of those tariffs, Ashworth adds. ([email protected])0513 GMT - China will likely face the largest tariff increases among U.S. trading partners, including on many consumer goods that weren't targeted during President Trump's first term, Nomura analysts say. They expect Trump to follow through on his election campaign promise, such as imposing up to 60% tariffs on Chinese imported goods. The Trump administration could easily raise the tariff rate against China using the current framework, the analysts write in a note. The new tariffs may also be spread out over the year in three separate increases, they add. "This would be similar to Trump's negotiation strategy in 2018-19 and would satisfy his advisors' inclination to avoid a large one-off increase in tariff rates," the analysts say.([email protected])0436 GMT - With all eyes on Trump, three central bank decisions in Asia will also vie for attention. Maybank analysts see a strong possibility that the Bank of Japan deliver a 25bp rate increase to 0.50% Friday after Gov. Ueda last week said the bank would discuss a hike. Officials have recently cited more clarity on the direction of U.S. policies as another key factor. Maybank thinks JPY may strengthen as current U.S.-Japan yield differentials imply USD/JPY below 150.00. Maybank reckons Singapore's central bank will ease Friday via a slight reduction of the S$NEER slope, citing a benign inflation outlook and a more uncertain global environment. Malaysia's central bank is tipped to hold again on Wednesday as growth remains strong and inflation may tick up. ([email protected])