Bitcoin Rises Slightly Ahead of Fed Decision — Market Talk

0836 GMT - Bitcoin edges higher but remains stuck in a range ahead of the Federal Reserve's policy decision later. The Fed is expected to keep interest rates on hold in a decision at 1800 GMT. Policymakers won't want to "rock the boat" with Fed Chair Jerome Powell likely to reiterate that the Fed is in no rush to cut interest rates further, Pepperstone strategist Michael Brown says in a note. The updated economic projections could raise inflation expectations and lower growth forecasts due to President Trump's tariff policies, he says. However, the latest rate projections should be largely unchanged, he says. This "shouldn't move the needle too much from a market perspective." Bitcoin rises 1.7% to $83,386, according to LSEG. ([email protected])0822 GMT - U.K. inflation is likely to have outstripped policymakers' expectations last month, Pantheon Macroeconomics' Rob Wood and Elliott Jordan-Doak write in a note to clients. Annual inflation for February, due to be reported next week, should have held steady on month at 3.0%, according to Pantheon's estimates. That would mark higher inflation than the Bank of England's own projections for an easing in the rate of prices rises last month. Stronger food and core-goods inflation should stop the headline rate from falling, Wood and Jordan-Doak say. Further ahead, the BOE's hopes for a gradual slowdown in underlying inflation may not come to fruition, the economists warn. The BOE's policy committee will meet Thursday and is widely expected to hold its key rate at 4.50%.([email protected]; @joshualeokirby)0817 GMT - The Bank of England could be close to the end of interest rate cuts as U.K. inflation is likely to rebound, Berenberg's Andrew Wishart says in a note. The BOE is widely expected to keep interest rates on hold on Thursday at 4.50%, maintaining a gradual pace of rate reductions. U.K. businesses are expected to face significant increase in costs due to rises in minimum wage and employers' national insurance contributions starting in April, likely to be reflected in price increases, Wishart says. "We suspect that the last opportunity to cut interest rates this year will be May 8," lowering the bank rate to 4.25%, he says. ([email protected])0802 GMT - The Turkish lira falls to a record low against the dollar after reports that Istanbul mayor Ekrem Imamoglu, a key rival of President Recep Tayyip Erdogan, was arrested. Imamoglu was detained Wednesday as part of an investigation into alleged corruption and terror links, state-run Anadolu Agency reported. It comes just days before he was expected to be named as the opposition party presidential candidate. The main opposition Republican People's Party is due to hold a primary election on March 23. Erdogan has long argued for interest rate cuts on the basis of the unorthodox view that high rates stoke inflation. USD/TRY reaches a high of 41.0653. ([email protected])0759 GMT - European stocks face a tariff reckoning after a strong start to the year, Barclays equity strategists say in a note. U.S. trade tariffs have revived stagflation fears and European equities aren't immune to worries about economic growth, the strategists say. "A 'worst case' 25% blanket tariff, should it materialize, would indeed take away most of the growth expected this year in Europe," the strategists say. Nevertheless, U.S. goods exports represent only 12% of revenue for Stoxx Europe 600 companies, which means the direct earnings impact would be in the low single-digit percentage range, according to Barclays. Moreover, Germany's fiscal reform raises Europe's long-term prospects, while progress toward a Ukraine ceasefire and more optimism on China could also help European stocks in relative terms, Barclays says. The Stoxx Europe 600 is up 9.2% year to date. ([email protected])0756 GMT - The dollar recovers marginally after hitting a five-month low Tuesday ahead of the Federal Reserve's interest-rate decision at 1800 GMT. The Fed is expected to keep rates unchanged but the focus is on its messaging, updated rate projections and latest growth and inflation forecasts. Investors are "explicitly wishing" to hear the Fed is ready to step in if the market selloff worsens, Swissquote Bank's Ipek Ozkardeskaya says in a note. If the Fed signals more rate cuts than previously anticipated, equities and the dollar could rise slightly, she says. A cautious stance on rate cuts would weigh on equities and the dollar, she says. The DXY dollar index rises 0.3% 103.518 after hitting a low of 103.197 on Tuesday. ([email protected])0734 GMT - China's policies to "invest in people," such as improving social-security programs, could bode well for its economic growth potential in the long run and address weak demand in the short run, CICC says in a note. Supportive policies for childbirth, parenting, education, elderly care, and medical care could increase consumers' willingness to purchase and improve their purchasing power, it says, noting the government's initiatives to boost consumption. With insufficient demand the main issue facing China's economy, the shift in policy focus from the supply side to the demand side can help address this issue, it says. ([email protected])0733 GMT - Eurozone government bond yields fall at opening as markets absorb Germany's historic amendment to the debt brake that opens the door to higher borrowing. "Germany's shift toward fiscal spending may influence EU-level agreements on increased defense spending and common borrowing, although growth impacts depend on rising production capacities in Europe," Danske Bank Research's August Hyldgaard says in a note. Eurozone bond investors will also follow the Federal Reserve which is expected to leave the fed-funds target range unchanged. Government bond supply in the eurozone will be limited to Germany's 2.5 billion euros tap of 2050- and 2053-dated Bunds on Wednesday, before a pickup in supply from other countries on Thursday. The 10-year Bund yield falls 2.6 basis points to 2.792%, according to Tradeweb. ([email protected])0715 GMT - U.S. Treasurys are little changed ahead of the Federal Reserve's widely expected decision to keep interest rates on hold, but yields have some more room to fall, says Pepperstone's Michael Brown in a note. "I still like bonds higher/yields lower here, particularly as growth expectations continue to re-rate lower, and policy uncertainty persists," the senior research strategist says. He expects the Fed policymakers not to 'rock the boat,' by issuing a broadly similar statement to that at the previous meeting. He also expects Fed Chair Jerome Powell to repeat that the FOMC is in no hurry to cut interest rates. The 10-year Treasury yield rises 1 basis point to last trade at 4.292%, while the 2-year yield is flat at 4.044%, according to LSEG data. ([email protected])0705 GMT - The Nikkei Stock Average ended 0.2% lower at 37751.88 as losses in chip shares offset gains in heavy-industry and trading-house stocks. Advantest fell 4.8% and Kioxia Holdings dropped 4.4% while IHI rose 4.3% and Itochu gained 3.9%. Broader market index Topix rose 0.4% to 2795.96. USD/JPY is at 149.72, up from 149.28 as of Tuesday 5 p.m. Eastern time, after the Bank of Japan held its policy rate unchanged. Investors are focusing on any developments related to U.S. trade and foreign policies. The 10-year Japanese government bond yield rose 1.5 basis points to 1.515%. ([email protected]; @kosakunarioka)0655 GMT - The Federal Reserve likely holds tight here, says Global X's Scott Helfstein ahead of the Fed's monetary policy decision on Wednesday. Fed Chair Powell has repeatedly said that the risks to price stability and full employment are balanced, the head of investment strategy says. "That is likely still true, but risks to both are rising," he says. This is not time to sell and go away, but perhaps time to review long-term strategy against near-term volatility, Helfstein says. Money markets fully expect the Fed to keep the fed funds target range at 4.25%-4.50%, according to LSEG data. The 10-year U.S. Treasury yield rises 1.5 basis points to last trade at 4.296%, according to LSEG data. ([email protected])0642 GMT - Demand at Norway's 4.0 billion kroner auction of June 2035- and May 2039-dated government bonds is expected to be strong, as yields are higher than at the previous sale, says Danske Bank Research's Jens Peter Sorensen in a note. "We expect there to be strong demand, as the yield today is some 20-25bp higher" than at the March 5 auction where the allotment yield on both bonds came in at 3.88%, he says. The yield on the 10-year bond is "historically high," he says. "Hence, buying 10-year Norwegian government bonds at these levels seems very cheap, even if Norges Bank does not cut rates as many times as we expect in 2025," he says. ([email protected])