Bitcoin Rises Slightly as Traders Digest Tariff News — Market Talk
1008 GMT - Bitcoin rises slightly as investors weigh the latest tariff announcement from President Trump. Trump unveiled a 25% tariff on automotive imports but suggested he could be more lenient on plans for reciprocal tariffs on April 2. He also said he was willing to reverse tariffs on China to encourage a deal for TikTok. This provided encouragement that tariffs will be less disruptive than feared, MUFG Bank's Lee Hardman says in a note. Given the elevated level of uncertainty, market participants might be waiting for more evidence of the impact of tariffs on economic activity and inflation, he says. Bitcoin rises 0.3% to $87,493, according to LSEG. ([email protected])1001 GMT - The 25% tariffs on auto imports into the U.S. announced by President Trump on Wednesday could severely impact the European and U.K. automotive industries, Quilter investment strategist Lindsay James says in a note. The U.S. accounts for around 18% of U.K. auto exports and over 20% of eurozone exports, James says. Additionally, the auto industry contributes 7% of GDP and 6% of employment in the eurozone. "There will be an obvious blowback on a sector that has already faced considerable headwinds from a painful transition to EVs alongside tighter regulations, in addition to slower replacement cycles from drivers and higher energy costs," she says. ([email protected])0928 GMT - Wednesday's spring statement left only marginal headroom against the fiscal targets, raising the risk of continued uncertainty around U.K.'s fiscal policy until the autumn budget in October, RBC Capital Markets analysts say in a note. Rather than using Wednesday's statement to increase the spending headroom, the U.K. Treasury chief Rachel Reeves "chose just to restore it to exactly where it was at the autumn budget, 9.9 billion pounds ($12.8 billion)", RBC says. ([email protected])0927 GMT - Beijing's restrained approach to retaliatory tariffs appears sensible, given the limited availability of substitutes, Nomura analysts write in a note. U.S. goods exported to China already face steep tariff rates, including soybeans, liquefied petroleum gas, copper scrap, large-engine cross-country motor vehicles, liquefied natural gas, cotton, metallurgical coal and grain sorghum, they note. Options for near-term alternatives are limited, and a further increase in tariffs on U.S. goods would inevitably raise China's living costs, they add. Although China faces deflation risks, direct price increases for consumer staples might still be politically unwelcomed, they say. ([email protected]; @ivy_jiahuihuang)0926 GMT - The Norwegian krone rises after the Norges Bank kept interest rates unchanged, having previously signalled the prospect of starting rate cuts. The central bank held its policy rate at 4.5%, as largely expected by analysts. It said inflation has been much higher than expected and wage growth in 2024 was higher than projected. This could lead to higher inflation ahead than previously anticipated, it said. "If the policy rate is lowered prematurely, prices may continue to rise rapidly." Norges Bank still expects to cut rates later, taking the policy rate to 4.0% by end-year followed by gradual further cuts over following years. The euro falls to 11.3549 krone after the decision from 11.3847 beforehand. ([email protected])0915 GMT - Trump's announcement of an impending 25% tariff on all foreign-made cars has sent shares of some major automakers in Asia tumbling, raising concerns about stalling an industry that's a key engine of growth in countries like Japan and South Korea. But direct tariffs are not the only threat that carmakers in Northeast Asia's advanced economies face, Moody's Analytics says. South Korean manufacturers also have production capacity in Mexico and Canada, Stefan Angrick and Dave Chia write in a note. "Industry giants such as Toyota, Honda, Nissan and Mazda operate plants there, alongside South Korean powerhouse Kia," they say. "A further escalation of trade frictions between the U.S. and its neighbors could cause more damage." ([email protected])0905 GMT - Ten-year U.S. Treasury yields rise in European mid-morning trade as investors ponder the potential impact of President Trump's latest tariffs on cars for the U.S. economy. The 10-year Treasury yield rises 3 basis points to last trade at 4.371%, according to Tradedweb. Trump announced additional 25% tariffs on all cars not made in the U.S. with a starting date of April 3 and on autoparts no later than May 3. The rise in yields comes ahead of the U.S. Treasury's $44 billion auction of seven-year notes later in the day. ([email protected])0900 GMT - Sterling rises after largely surviving Wednesday's U.K. budget, ING analyst Chris Turner says in a note. The budget had little impact on sterling with its losses against the dollar on Wednesday driven by lower-than-expected U.K. inflation data and later news of U.S. tariffs on automotive imports. Sterling has dodged a bullet with the budget but the fiscal spending plans aren't necessarily an outright positive factor, he says. ING sees the possibility of U.K. tax rises later in the year, meaning Bank of England interest rate cut expectations for this year could be underpriced. Sterling rises 0.2% to $1.2916 after hitting a two-week low of $1.2871 late Wednesday, according to FactSet. The euro falls 0.1% to 0.8338 pounds. ([email protected])0855 GMT - The global economy is on the brink of a damaging trade war, Commerzbank Research economists Vincent Starmer and Bernd Weidensteiner warn after the U.S. set out a blanket 25% tariff on auto imports. Those duties will affect a number of major exporters, including the EU and its largest economy Germany, Stamer and Weidensteiner say. And rhetoric from President Trump and his senior officials points to further measures, especially if Brussels and other capitals react with retaliatory tariffs on U.S. goods, they say. "Ultimately, the protectionist defenses will become even higher and the risk of a tariff war will increase," the economists write in a note to clients. "If we manage to stop the escalation spiral described, we might be able to avoid a severe blow to the world economy." ([email protected]; @joshualeokirby)0841 GMT - Escalating tariff threats are unlikely to push the U.S. into a recession, UBS Global Wealth Management's Mark Haefele says in a note. The comment comes after President Trump said his government would impose a 25% duty on all imported autos. "In our base case, a wide range of selective tariffs and counteractions are likely to lead to slower economic growth compared to last year, but they should not prevent the U.S. economy from expanding by around 2%-its historical trend rate-this year," the wealth manager's chief investment officer says. Still, the threat of further tariff escalation is a major concern for investors, he says. The pan-European Stoxx Europe 600 falls 0.8% in early trade.([email protected])0831 GMT - Yields on U.K. government bonds stay steady after falling following Wednesday's spring statement in which spending cuts and a lower-than-expected gilt remit were announced. Planned gilt sales are skewed towards shorter-dated maturities, with a notable decline in the share of long-dated gilt sales. The budget announcements "probably won't have a material effect on the decision-making process because the changes are small," Societe Generale's Sam Cartwright says in a note. The 10-year gilt yield is little changed at 4.723% and the 30-year gilt yield trades steady at 5.295%, Tradeweb data show. ([email protected])0825 GMT - The euro rises against a softer dollar as President Trump's announcement of a 25% tariff on automotive imports is yet to have much impact on currency markets, ING's Chris Turner says in a note. "This might be because Trump hinted at potentially being more lenient with reciprocal tariffs next week," and it should keep the euro above the $1.0730 support level, he says. The question will be on how Europe retaliates to U.S. tariffs and then how Washington responses. A global trade war is negative for the euro, although the market will assess the impact tariffs have on overall confidence in the eurozone following a recent boost from European fiscal stimulus. The euro rises 0.1% to $1.0759.([email protected])