Bitcoin Rises as Trump's Son Endorses The Cryptocurrency — Market Talk

1137 GMT - Bitcoin rises after President Trump's son hinted at an investment in the cryptocurrency, Saxo Bank analysts say in a note. Eric Trump said it "feels like a great time to enter bitcoin" in a post on the X social media platform. He also linked the Trump-backed World Liberty Financial, a decentralized finance initiative centered around a crypto token called WLFI. Overall the crypto market remains resilient despite macroeconomic pressures, the analysts say. Bitcoin rises 2.2% to $99,028, according to LSEG.([email protected])1135 GMT - Yields on U.K. government bonds, or gilts, have stabilised after rising to multi-decade highs in the first weeks of the year, but U.K. fiscal challenges remain which pose risks, Joseph Kalish macro strategist at Ned Davis Research says in a note. Last week's speech by the Treasury Chief Rachel Reeves--which included a proposal to add a third runway at Heathrow airport--failed to inspire confidence among investors, Kalish says. Trump's tariffs are a new threat as they risk raising inflation and leading to slow growth in the U.K., he says. The 10-year gilt yield trades flat at 4.432%, down from January's high of 4.921% last seen in 2008, Tradeweb data show. ([email protected])1103 GMT - There is light at the end of the tunnel for the eurozone's limping retail sector, Pantheon Macroeconomics' Melanie Debono writes in a note to clients. Retail sales fell in December, figures show Thursday, capping a weak quarter for the sector. Still, with a robust labor market ensuring decent wage growth and boosting real incomes as price inflation stays relatively cool, sales should pick up over the coming quarters, Debono says. ([email protected]; @joshualeokirby)1101 GMT - Persistent inflation, ballooning budget deficits and political uncertainty are among the forces pushing U.S. Treasury yields higher, says T.Rowe Price's Tim Murray in a note. Historically, a U.S. Treasury yield well above 5% would hardly be considered an outlier, the capital market strategist says. T.Rowe Price's asset allocation committee currently holds underweight positions in both long-term U.S. Treasuries and the broader fixed income category, Murray says. The 10-year U.S. Treasury yield rises 2 basis points to 4.438%, according to Tradeweb data. ([email protected])1000 GMT - Texas is constructing more houses than any other state in the U.S., Realtor.com reports, highlighting the Lone Star State's appeal to newcomers, driven by housing, jobs, and climate. More than 25% of home shoppers are from out of state, with significant migration from California and internationally. Texas leads in new home permits, accounting for 15% of the 2024 U.S. total despite representing only 9% of the population. The state excels in affordable housing, with new homes shrinking by 5.3% since 2020 to 2,073 square feet, compared to a 3.6% national reduction. Texas's median home price of $360,000 in December 2024 remains $40,000 below the national median. Affordability challenges remain, as 51% of Texans earn under $75,000 annually, with only 17% of homes affordable to them. ([email protected])1002 GMT - The euro's fall back below $1.04 lacks an obvious catalyst but it's now trading at levels that better reflect underlying risks, Monex Europe analysts say in a note. The EU looks set to be the "next economy in President Trump's crosshairs" regarding trade tariffs, they say. That warrants a discount to the single currency's valuation. Events in the U.S. are the key driver for the euro versus the dollar, with the U.S. nonfarm payrolls report on Friday in focus. The euro falls 0.4% to $1.0361 after rising to a near one-week high of $1.0443 Wednesday, according to FactSet.([email protected])1001 GMT - The U.S. economy remains in a good place, limiting scope for falls in 10-year Treasury yields and the U.S. dollar, Brown Brothers Harriman says in a note. "The U.S. economy is tracking well above long-run annual trend growth of 1.8%," BBH's market strategists says. Importantly, solid U.S. labor market conditions suggest consumer spending will remain the principal growth driver. The 10-year U.S. Treasury yield rises 3 basis points to 4.448%, according to Tradeweb. The DXY rises 0.3% to 107.945. ([email protected])0952 GMT - The rise in U.S. Treasury yields over recent months despite interest-rate cuts by the Federal Reserve is an alarming trend, says T.Rowe Price's Tim Murray in a note. While the 10-year Treasury yield has partially reversed from a recent peak--reaching 4.809% on Jan. 14, according to Tradeweb--the broader path remains upward, the capital market strategist says. Equally concerning is that the pain from higher rates is being felt in equity markets, he says. Since mid-December, the correlation between U.S. bonds and stocks has been rising. Prices for the two asset classes have often moved together, rather than in opposite directions as is more usual, he says. The 10-year Treasury yield rises 2 basis points to 2.444%. ([email protected])0944 GMT - The Bank of England is likely to signal additional interest-rate cuts at future meetings due to concerns about high interest rates hurting U.K.'s growth, XTB's Kathleen Brooks says in a note. Such a signal would likely cause gilt yields to fall, she says. BOE monetary policy members are likely to advocate for faster rate cuts to prevent U.K. inflation from falling below the 2% target. The 10-year gilt yield edges up 2 basis points to last trade at 4.451% after yields fell sharply on Wednesday, Tradeweb data show. ([email protected])0931 GMT - European natural-gas prices rise in early trade on expectations of stronger demand due to a cold snap. "Forecasts for colder weather have raised concerns that we will see steeper draws in gas storage in the coming days," ING strategists Warren Patterson and Ewa Manthey say. EU inventories have been depleting faster than usual, with storage levels at 51.3% and daily net withdrawals of around 7.9 terawatt-hours as of Tuesday. The benchmark front-month contract at the Dutch TTF hub currently trades 1.3% higher to 54.13 euros a megawatt-hour and is up almost 15% on the month. Prices rebounded in the previous trading session after China said it would impose tariffs on U.S. LNG starting on Feb. 10, a move expected to free up larger volumes for other buyers, including Europe. ([email protected])0937 GMT - Sterling could fall modestly if the Bank of England votes 8-1 to cut interest rates and downgrades its economic growth forecasts, ING analyst Chris Turner says in a note. A 9-0 vote in favor of a cut would be much more negative for sterling, he says. The BOE announces its decision at 1200 GMT and is widely expected to cut rates by 25 basis points. The brief reprieve in the "tariff noise" surrounding President Trump's policies should allow investors to focus on the U.K.'s fiscal and monetary mix, Turner says. GBP/USD falls 0.5% to 1.2446. EUR/GBP rises 0.1% to 0.8328. ([email protected])0931 GMT - Beijing may have to eventually stimulate domestic demand aggressively as it did during the previous trade war as China relies more on exports than the U.S. does, Macquarie analysts write in a note. The new tariffs released by China on U.S. goods cover only about $15 billion, while the new U.S. tariffs cover around $525 billion of Chinese goods, they note. Beijing could easily offset the impact of the new tariff with a CNY500 billion stimulus, Macquarie analysts say. China's measured response to Trump's new tariffs suggests its preference for negotiation over escalation, the analysts say, noting China's greater reliance on exports due to weak domestic demand. Beijing may also prefer to rely on exports to boost economic growth in order to save its policy tools for the future, they say. ([email protected]; @ivy_jiahuihuang)