Bitcoin Rises Slightly But Remains Range-Bound — Market Talk

1113 GMT - Bitcoin rises slightly but remains range-bound in the absence of a major new catalyst to drive notable moves. Donald Trump's presidential election victory in November initially boosted bitcoin to record highs but the currency has recently struggled for material upward momentum. "It continues to consolidate in a relatively tight range, having held between $100,000 and $94,000 since Feb. 5," Trade Nation analyst David Morrison says in a note. Bitcoin last trades up 1.4% at $96,324, according to LSEG. It reached an all-time high of $109,071 on Jan. 20 but has since consolidated. ([email protected])1050 GMT - Volatility in bond markets is shifting to the long end of the curve from the short end, Neuberger Berman's Jeff Blazek and Erik Knutzen say in a note. For the past three years, bond market volatility has been concentrated in the short end of the yield curve, the co-CIOs for multi-asset strategies say. This is because short-dated bonds are impacted most by changing expectations for inflation and policy rates. In 2025, however, a focus on fiscal policies and longer-term growth and interest-rate expectations has switched the focus to longer-dated bonds, they say. ([email protected])0959 GMT - Stronger-than-expected U.K. inflation data cause investors to reduce their expectations of an interest-rate cut by the Bank of England as early as March. Money markets now price in a 15% probability of an interest-rate cut in March, down from 25% chance priced in on Tuesday, LSEG Refinitiv data show. Data showed U.K. annual inflation rose to 3.0% in January from 2.5% in December. "The [inflation data] could constrain the BOE's ability to lower interest rates in the near term," Daniela Hathorn from Capital.com says in a note. ([email protected])0957 GMT - The Bank of England finds itself in the uncomfortable situation of needing to cut rates at a time when inflation is rising, Laith Khalaf at AJ Bell writes in an investors' note. U.K. price inflation climbed to 3% in January, figures show Wednesday, and that trend is likely to continue over the coming months amid tax and wage rises, as well as a strong dollar and looming tariffs, Khalaf notes. Still, the BOE is focused on a creaking jobs market and weak domestic demand, and remains set to cut rates further in the coming six months, he says. "Of course, the Bank must look to the longer term when it comes to monetary policy, but cutting rates while inflation is heading in the wrong direction is still a pretty sticky wicket," he says. ([email protected]; @joshualeokirby)0956 GMT - The general trend of U.K. price inflation is still downward, keeping the Bank of England on track to cut interest rates four times this year, ING economist James Smith writes in a note. Headline inflation rebounded at the start of the year, and by more than expected, presenting on the face of it a challenge to the BOE's plans for gradual rate cuts this year, Smith says. But one-off effects both in headline inflation, such as utilities, and in services, such as airfares, are behind that rise. Stripping out those spikes, underyling inflation is easing. "[That] would help cement a total of four cuts this year," Smith says. ([email protected]; @joshualeokirby)0934 GMT - The dollar is little moved by President Trump's latest tariff threats as markets are optimistic his plans won't come to fruition, MUFG Bank analyst Lee Hardman says in a note. Trump said on Tuesday he is considering imposing tariffs of about 25% on automobile, semiconductors and pharmaceutical imports. He warned tariffs could go "substantially higher over a course of a year." Despite the potential disruptive impact from these plans, the dollar failed to strengthen much overnight, Hardman says. It likely reflects skepticism that Trump will follow through on his threats with such aggressive tariff hikes given "a lack of concrete action so far at the start of his second term." The DXY dollar index trades flat at 107.034. ([email protected])0920 GMT - While the Bank of England may want to view rising inflation as temporary, January data showing it rose to 3.0% suggest it could be a while before the base rate is cut again, says Jeremy Batstone-Carr, strategist at Raymond James Investment Services. The key question for the bank's monetary-policy committee is how transitory these price pressures will be, he says. The BOE voted unanimously in favor of cutting its interest rate two weeks ago, but since then its chief economist Huw Pill has cautioned against cutting rates in haste, despite weak economic activity. "Today's data vindicates this steadfast commitment to a gradual approach to further policy easing," Batstone-Carr says. ([email protected])0915 GMT - An increase in employers' national insurance contributions and higher energy costs are expected to push up U.K. inflation to around 4% in September, Berenberg economist Andrew Wishart says in a note. The latest data show annual CPI inflation accelerated to 3.0% in January from 2.5% in December. Berenberg expects that higher U.K. inflation will likely cause the Bank of England to keep interest rates on hold after one final 25 basis-point interest-rate cut in May. ([email protected])0915 GMT - China's domestic retail sales of cars are expected to rise by 3% in 2025 compared to the previous year, according to Goldman Sachs analysts in a note. The country's passenger vehicle industry saw significantly stronger retail volumes in the 4Q 2024, thanks to expanded trade-in subsidies introduced at the end of July, they note. GS estimates that a total of 1.7 million vehicle sales were driven by the government subsidy last year. With government stimulus for autos extended into this year, GS raises its China passenger vehicle retail forecast for 2025 to 23.6 million from 22.1 million. Sales of new energy vehicles, including both electric vehicles and hybrids, are expected to capture an even larger market share this year, due to trade-in subsidies, strong model launches and price reductions, GS says. ([email protected]; @ivy_jiahuihuang)0905 GMT - President Trump's growing isolationism against EU allies has resulted in an emerging trend of euro underperformance, ING analyst Francesco Pesole says in a note. The U.S. and Russia have held discussions for a Ukraine peace deal that exclude both the Ukraine and the EU. "Hints at future Moscow-Washington cooperation can reinforce the notion of isolation for Europe from a defense and economic perspective and contribute to a rotation away from European currencies into the safe-haven dollar and the Japanese yen." There's also plenty of room for U.S. tariff risks to be priced into the euro, he says. The euro rises 0.1% to $1.0440. ING expects it to fall to $1.0400 this week. ([email protected])0849 GMT - Sterling rises but only modestly after Wednesday's higher-than-expected U.K. inflation data. This reaction reflects the finer details of the report, ING analyst Francesco Pesole says in a note. Headline inflation rose to 3.0% year-on-year in January but primarily due to an unexpected surge in food prices and markets are "attaching little weight" to this data, he says. Services inflation was also marginally lower than expected. This "benign trend" in services inflation could persist in the second quarter and supports the case for the Bank of England to cut interest rates once a quarter this year, he says. Sterling rises only marginally versus the dollar and euro after the data, last at $1.2621 and 0.8279 per euro. ([email protected])0836 GMT - Bank Indonesia could cut interest rates later this year, Capital Economics senior Asia economist Gareth Leather says in a note. He thinks Perry Warjiyo, the central bank's governor, struck a slightly more hawkish tone in the policy meeting presser compared with last month, while still signaling possible rate cuts later in the year. With inflation expected to remain subdued, Leather predicts BI may remain focused on currency stability. Despite global uncertainties, the rupiah has held steady since January's rate cut, staying near multi-year lows it reached last year, he notes. Warjiyo emphasized that rupiah stability is measured relative to peers, not just against the dollar, he adds. CE maintains its view that BI will cut rates steadily through 2025, projecting a total cut of 150 bps from the current 5.75%. ([email protected])