Bitcoin Jumps, Could Extend Rise on Trump's Plan For Strategic Crypto Reserve — Market Talk

0751 GMT - Bitcoin rises sharply and could extend its recovery after President Trump announced the creation of a U.S. strategic crypto reserve, XTB's Kathleen Brooks says. "Ironically, a [cryptocurrency] that was designed to be isolated from government interference and decentralized, is now reliant on the U.S. government for its fortunes," she says. Investors in the options market are betting on further gains for cryptocurrencies following Trump's announcement. Bitcoin could rise back to $100,000 as part of a broad-based recovery in crypto, she says. Bitcoin rises 9.3% to $92,090, according to LSEG. It reached a three-and-a-half-month low of $78,273 on Friday. On his Truth Social platform Sunday, Trump said the crypto reserve would include bitcoin, ether, XRP, Solana's SOL token and Cardano's ADA. ([email protected])0725 GMT - Thailand's consumer-price index is expected to have risen 1.1% on year in February, according to the median forecast of nine economists surveyed by The Wall Street Journal. That would compare with January's 1.32% and the central bank's inflation target range of 1.0%-3.0%. Headline CPI likely moderated last month, in line with a slight decline in retail fuel prices, Nomura analysts write in a report. They expect core inflation at 0.8%, unchanged from January, suggesting that demand-side pressures remain weak. The Bank of Thailand lowered its benchmark interest rate amid global uncertainties in February. The CPI data are due later this week.([email protected])0714 GMT - The downward correction in market pricing of the terminal Fed funds rate--where the Federal Reserve stops cutting interest rates--can continue a bit longer, says Danske Bank Research's Asger Wilhelm Dalsjoe in a note. Recent weak U.S. data have prompted money markets to lower bets on the terminal Fed rates. "We think the downward correction can proceed a bit longer, as we target a terminal rate of 3-3.25%," the assistant analyst says. Markets currently price the terminal Fed rate at around 3.50% to be reached in the second quarter of 2026, according to LSEG data. The 10-year U.S. Treasury yield, closed 6 basis points lower at 4.229% on Friday, currently trades 0.6 basis point higher at 4.235%, according to Tradeweb. ([email protected])0701 GMT - Consumer inflation in the Philippines likely eased slightly to 2.75% on year in February, according to the median forecast of 10 economists polled by The Wall Street Journal. That compares with a 2.9% increase in January. Headline inflation is expected to have eased last month, partly due to base effects, Nomura analysts write in a report. Rice prices likely continued falling and dragged food inflation lower, Barclays analysts say in a note. The Philippine central bank held rates in February amid global uncertainty. The CPI data are due Wednesday.([email protected])0659 GMT - Germany, which held elections on Feb. 23, desperately needs an effective government to start reforming the economy and odds are good for delivery, says UniCredit's Erik Nielsen. The next government has to find resources to fill the gap after years of under-investment, the group chief economics advisor says. Tasks include a substantial increase in its defense capabilities, and help lead Europe through the rough geopolitical waters, he says. "Despite the clear complexities--the odds are good for the next government to deliver on the necessary reforms and to fulfil Germany's role in the European leadership constellation," he says. He argues that the economy is in better state than headline numbers suggest. The Chancellor-in-waiting, Christian Democrat Friedrich Merz, aims to have a government in place by Easter. ([email protected])0648 GMT - Markets remain stuck in a trap of softening U.S. data, says Pepperstone's Michael Brown in a note. This is coupled with the U.S. administration doubling down on the trade and geopolitical hawkishness and delivering unpredictable and inconsistent policy proposals on a daily basis, the senior research strategist says. "Hardly a brilliant cocktail for risk appetite, or to entice any dip buyers to enter the fray!," he says. For the first time in a while, Brown is "genuinely nervy" over the state of the U.S. economy. The 10-year U.S. Treasury yield last trades at 4.235%, up 0.6 basis point, according to Tradeweb. ([email protected])0642 GMT - Japanese stocks ended higher following Friday's selloffs and as concerns about borrowing costs have ebbed for now. Heavy industry and auto stocks led the gains. IHI advanced 7.8% and Toyota Motor gained 3.9%. The Nikkei Stock Average rose 1.7% to 37785.47 following Friday's 2.9% drop. USD/JPY is at 150.41, compared with 150.62 late Friday in New York. Investors are focusing on any developments in U.S. trade and foreign policies and their implications for Japanese businesses. The 10-year Japanese government bond yield rose 3.5 basis points to 1.405%. ([email protected]; @kosakunarioka)0642 GMT - U.S. President Trump's tariffs on China were "seemingly soft" but tactical, with his trade policy expected to take center stage in the coming months, Nomura analysts write in a note. Markets have potentially underestimated his "resolve to curb China and his intent on pursuing bolder measures in his second term," they write. His focus on domestic agenda, border policies and the peace deal between Russia and Ukraine was also tactical and doesn't signal a shift in strategic priorities, they say. Nomura analysts estimates the average U.S. tariff rates to China to be lifted to approximately 33%, following the latest announcement of an additional 10% tariff. ([email protected]; @ivy_jiahuihuang)0635 GMT - A trading range of 2.20%-2.60% for the 10-year Bund yield could persist, according to Morgan Stanley Research's Lorenzo Testa and Maria Chiara Russo in a note. This leaves limited scope for implementing outright trades on euro duration for now, the strategists say. Eurozone duration ended February are more expensive by about 6.5 basis points relative to January despite the headline-induced volatility and the strong cross-market underperformance, they say. The 10-year Bund yield ended Friday at 2.388%, according to Tradeweb. ([email protected])0605 GMT - The yuan weakens slightly against the dollar in offshore and onshore markets as traders await China's National People's Congress meeting slated to be held this week. The meeting may provide the PBOC with more room to maintain foreign exchange stability, which could lead to steady USD/CNY fixing guidance near the 7.17 level, Mizuho Securities Asia's Ken Cheung says in an email. "At the NPC, Chinese Premier Li will reveal various economic and development targets, with an annual growth target of around 5% for 2025 through higher budget deficits of 4% of GDP," the director of FX Strategy says. "The inflation target is expected to stay around 2%," Cheung adds. USD/CNY is 0.1% higher at 7.2894; USD/CNH is up 0.1% at 7.2978. ([email protected])0554 GMT - The Singapore dollar strengthens slightly against its U.S. counterpart in the Asian session amid mild risk-on sentiment driven by gains across most regional equity markets. However, further Singapore dollar appreciation could be curbed by ongoing worries over tariffs from the U.S. and the rest of the world, analysts say. "Markets are now considering prospects of a global slowdown and inflationary pressures," SMBC's Jeff Ng says in commentary. "We stay more bearish on KRW, MYR, THB and SGD over the immediate horizon," the head of Asia Macro Strategy adds. USD/SGD is 0.1% lower at 1.3496. ([email protected])0528 GMT - Investors are focused on tariffs and their implications but appear to be underestimating the potential damage to capex from tariff threats, Morgan Stanley says in a report based on its recent marketing across the U.S., Singapore and Hong Kong. "Investors are sanguine about tariff implications," MS says, adding that it worries about the adverse effects of tariffs on corporate confidence. "Unless tariffs are averted swiftly, uncertainty itself will hurt the business cycle." MS sees broader macro headwinds persisting for China's economy along with deflation. While MS sees India's economic growth on track to reach 6.5% sustainably from 1Q, it believes the Bank of Japan's actions will be less hawkish than the market expects unless the yen depreciates sharply. ([email protected])