Bitcoin Rises on Hopes For End to U.S. Government Shutdown — Market Talk
0805 GMT - Bitcoin rises as hopes for an imminent end to the U.S. government shutdown boost risk sentiment. The Senate on Sunday advanced a bill to fund the government until January 30. "If we do get an end of the shutdown, it would be a near term positive," Jefferies economist Mohit Kumar says in a note. The end of the shutdown would allow for the resumption of official data needed to convince the Federal Reserve to cut interest rates in December, he says. Bitcoin rises 1.8% to $106,399 after reaching a nearly one-week high of $106,614 overnight, LSEG data show. ([email protected])0749 GMT - The dollar trades steady after U.S. lawmakers made progress towards ending the government shutdown. The Senate on Sunday advanced a bill to fund the government until January 30. The reopening of the government would allow for the resumption of official data. The dollar has risen during the absence of negative data that would have indicated a slowdown in the economy, Commerzbank's Michael Pfister says in a note. It will probably take a while for the data to become reliable again after the shutdown ends, meaning the dollar's outlook looks unclear, he says. The DXY dollar index trades flat at 99.584. ([email protected])0742 GMT - Progress has been made to end the U.S. government shutdown, but as long as the lack of mainstream U.S. government data persists, the market will be left somewhat rudderless, First Abu Dhabi Bank's Simon Ballard says in a note. This leaves investors unclear on direction and susceptible to any near-term headline risk, the chief economist says. "Moreover, we expect rates volatility and uncertainty to remain elevated for the foreseeable future," he says. Progress has been made toward the end of the U.S. government shutdown after the Senate cleared a hurdle to advance a bill to end the shutdown, aided by a vote from a bloc of Democrats. ([email protected])0728 GMT - The Philippines' 4Q economic growth is likely to be driven by a recovery from the storm season and strong remittances, analysts at BMI, a unit of Fitch Solutions, write in a note. Household consumption is likely to pick up with robust remittances supported by factors such as a weaker peso, the analysts say. The weak 3Q GDP growth was partly due to weaker household consumption, reflecting the effects of several severe storms and earthquakes. While the storm season in the Philippines mostly ended in 3Q, BMI warns that tariff-related headwinds could weigh on growth. BMI expects 2025 GDP growth for the Philippines to be 4.9%.([email protected])0721 GMT - Eurozone government bond yields open higher, tracking U.S. Treasury yields rising on renewed hopes for an end to the U.S. government shutdown soon. "If we do get an end of the shutdown, it would be a near term positive," says Jefferies's Mohit Kumar in a note. An end of the shutdown would also open the path for data releases, the global economist says. There is no government bond auction in the eurozone on Monday, but there will be auctions in the Netherlands on Tuesday, Germany on Wednesday and Italy on Thursday. The 10-year German Bund yield rises 3.1 basis points to 2.696% in early trade; the 10-year U.S. Treasury yield rises 4.6 basis points to 4.138%, according to Tradeweb. ([email protected])0713 GMT - As hopes for an end to the U.S. government shutdown emerge, bond market headwinds intensify amid improving risk sentiment, says Commerzbank Research's Rainer Guntermann in a note. "Against this backdrop, bond markets are feeling the pressure with risk sentiment improving and fears about the damage to the economy subsiding," the rates strategist says. The 10-year U.S. Treasury yield thus looks set to move to the upper end of its range with the prospect of a slight curve steepening, he says. When a bond curve steepens, the gap between shorter- and longer-dated bond yields widens. The 10-year U.S. Treasury yield rises 4.6 basis points to 4.138%, according to Tradeweb. ([email protected])0708 GMT - There is structurally less demand for bond duration globally, likely keeping term premia elevated, says BlueBay Asset Management's CIO Mark Dowding in a note. Fixed-income investors are now more focussed on securing attractive yields by adding carry in areas like credit, he says. "Consequently, we think that term premia can stay elevated, such that investors are incentivized and tempted to extend duration risk," he says. Term premium is the extra yield investors demand to buy a longer-dated bond rather than a shorter-dated one. Term premia is an extra return that investors demand to hold a longer-dated bond rather than a shorter-dated one. ([email protected])0657 GMT - Supply pressure on the long end of the U.S. Treasury curve could increase from next summer to meet the U.S. government's persistently high net financing requirements, says LBBW's Elmar Voelker in a note. The Treasury's guidance last week repeated the intention to keep auction sizes unchanged for the next "several quarters". However, a new addition to the statement said the Treasury has begun to preliminarily consider future increases to nominal coupon and FRN [floating rate note] auction sizes. The current trading week will provide the first test of how bond market participants have taken this message, with auctions coming up. "In our view, below-average investor demand could fuel the recent bond-bearish trend once again," the senior fixed income analyst says. ([email protected])0648 GMT - The compound yield for 30-year Japanese government bonds is likely to remain within the 3% to 3.2% range for some time to come, Citi Research's Tomohisa Fujiki says in a note. "We think issuance size reduction will provide support for super-long bonds regardless of budget size," the strategist says. Citi expects a 100 billion yen per offer reduction in 20-year and 30-year JGB auctions, and also sees a slowdown in 40-year JGB issuance pace next year. The market may continue to depend on developments in the U.S. but market pricing of a December rate hike by the Bank of Japan should recede as a contraction in GDP in July-September is confirmed, he says. The 30-year Japanese government bond yield rises 0.3 basis points to 3.136%, according to Tradeweb. ([email protected])0643 GMT - U.S. Treasury yields rise in Asian trade amid fresh optimism about seeing an end to the U.S. government shutdown soon. Late Sunday, the Senate cleared a key hurdle in its drive to end the record-long government shutdown, after Democrats provided enough votes to advance a measure aimed to end the impasse. The two-year Treasury yield rises 4 bps to 3.596%, the 10-year Treasury yield rises 4.4 bps to 4.136% and the 30-year Treasury yield rises 4 bps to 4.740%, according to Tradeweb. ([email protected])0507 GMT - China's downward pressure on prices is likely to ease in 2026, according to UOB economist Ho Woei Chen in a research note. The improvement in China's October headline consumer price index was mainly due to stronger holiday demand for travel as well as a low base effect, the economist says. It is important to note that October's CPI showed the first sequential increase this year, she says. The economist expects some easing in downward price pressure next year, with headline CPI to recover and rise around 0.9%, supported by government policies to promote consumption. PPI deflation is likely to narrow to -0.5% in 2026, she adds. ([email protected])0453 GMT - China is likely to opt for steady economic progress in 2026, rather than a big strategy change, say Citi analysts in a research note. "2026 is more likely a year of continuation than breakthrough," the analysts say. With rebalancing of tech self-reliance and consumer consumption, the focus of the 15th Five-Year Plan, China is largely staying the course on its core strategic objectives, they say. Investors are closely watching the Central Economic Work Conference in mid-December, where policymakers are expected to set the tone and priorities for economic work in 2026, they say. ([email protected])