Bitcoin Rises to Record High Ahead of Trump's Inauguration — Market Talk

0726 GMT - Bitcoin rises to a record high ahead of Donald Trump's inauguration as U.S. President later. Traders are optimistic that Trump will deliver policies that support digital assets as he has vowed to make the U.S. the crypto capital of the world. "Crypto investors have several things to look forward to in the coming weeks including a crypto-friendly administration and strong February seasonality for bitcoin," Ned Davis Research strategists say in a note. Trump will be sworn in for his second term as U.S. president at around 1700 GMT. Bitcoin rises to a high of $109,071, according to LSEG. ([email protected])0723 GMT - Singapore's inflation likely rose 1.55% on year in December, according to the median estimate of 10 economists polled by The Wall Street Journal. That would compare with November's 1.6% expansion. Headline inflation is expected to have eased, driven by cooler accommodation inflation and a decline in private transport costs, DBS' economics team says in a report. The city-state's core CPI is also expected to have risen in December by 1.7% on year, easing from the 1.9% increase seen in November, according to the poll. Base effects are estimated to have pushed December's core inflation more visibly below 2.0% on year, Barclays economists noted. The CPI data are due Thursday. ([email protected])0708 GMT - The coming days will show whether German Bunds can continue to stabilize after the recovery, says Commerzbank Research's Rainer Guntermann in a note. "While Bunds should outperform U.S. Treasurys, they are unlikely to decouple sustainably," the rates strategist says. Structural factors also support higher long-term real yields in both the U.S. and Europe, even if economic growth remains subdued, he says. This week's scheduled government bond supply in the eurozone will come from Slovakia on Monday, Germany on Tuesday and Wednesday, as well as from France on Thursday. The door remains open for syndicated issuance as well. The 10-year Bund yield closed little changed at 2.53% on Friday, having come down from last Tuesday's multi-month high of 2.629% according to Tradeweb. ([email protected])0700 GMT - South Korea's benchmark Kospi edged down 0.1% to close at 2520.05, reversing early gains. Losses in shipping, oil and semiconductor stocks outweighed gains in battery and steel shares. Foreign investors remained net sellers. Trading was lackluster amid caution ahead of President-elect Donald Trump's inauguration on Monday. He has promised to sign a slew of executive orders on his first day as president. Shipping company HMM fell 7.4%. S-Oil lost 4.3%. Memory-chip maker SK Hynix shed 1.2%. USD/KRW settled 0.5% lower at 1,451.70 in Seoul onshore trading. South Korea's 10-year government bond yield was up 5.9 bps at 2.872%.([email protected])0656 GMT - Most market attention will fall on Monday's U.S. presidential inauguration, with any signals on fiscal policies closely watched, Pepperstone's Michael Brown says in a note. Market attention will focus not only on the inaugural address for any hints on the fiscal policies that the administration may seek to implement, but also on the executive orders that Trump signs in the early days of his second term in office, the senior research strategist says. U.S. cash equity and Treasury trade will be closed on Monday. ([email protected])0649 GMT - Japanese stocks ended higher, led by gains in auto and electronics stocks, as a weak yen raises hopes for earnings growth. Toyota Motor gained 2.9% and Hitachi climbed 2.8%. Daiichi Sankyo jumped 8.2% after the U.S. Food and Drug Administration approved its breast cancer drug Datroway. The Nikkei Stock Average rose 1.2% to 38902.50. USD/JPY is at 156.17, compared with 156.30 late Friday in New York. Investors are focusing on Trump's inauguration and a number of executive orders he is expected to sign. The 10-year Japanese government bond yield declined one basis point to 1.190%. ([email protected]; @kosakunarioka)0648 GMT - Morgan Stanley Research suggests investors to go long duration in the U.S. Treasury market by purchasing 5-year Treasury notes, its strategists say in a note. "The anticipated post-election move higher in Treasury yields gave investors the dip we looked to buy," they write. Now is the right time to enter duration longs, they add, as a significant amount of term premium already exists and recent inflation data show signs of slowing in inflation. They also believe that the carry and roll-down profile has improved. On Friday, the 5-year U.S. Treasury yield closed at 4.43%, while the 10-year yield closed at 4.62%, according to Tradeweb. ([email protected])0510 GMT - The USD starts the week on slightly softer footing ahead of the MLK holiday and Trump's inauguration, OCBC strategists say. Trump has promised to sign a series of executive orders on his first day, stating at a rally that he will act with historic speed and strength, Frances Cheung and Christopher Wong note. There are expectations that tariffs may soon be announced, but the strategists add that the timing, magnitude and scope remain uncertain. A longer delay in tariff announcements could provide a breather for risk proxies, and they don't rule out a pullback in the USD. Meanwhile, a swift order for tariff implementation would likely undermine sentiment and boost the USD, they add. The DXY is last seen at 109.1, with daily momentum mildly bearish and consolidation likely as markets await event risks. ([email protected])0446 GMT - Economic data calendars are light this week but there's consequential event risk around Trump's inauguration and potential for a barrage of first-day executive orders, says Richard Franulovich, head of FX Strategy at Westpac. Franulovich has allowed for a very wide potential AUD/USD range this week. The pair, trading at 0.6214, could move between 0.6050 to 0.6300. AUD's deep liquidity and high exposure to China make it an attractive proxy for CNH at times like this, Franulovich says. Still, the inauguration speech is not really the forum for talking about tariffs and Trump probably won't even explicitly broach them, the same as his 2017 inauguration speech, he adds. This isn't the occasion for the kind of policy detail FX markets are seeking, Franulovich adds. ([email protected] ; @JamesGlynnWSJ)0422 GMT - China's yuan strengthens slightly against the dollar in the offshore and onshore markets. Friday's phone call between incoming U.S. President Donald Trump and Chinese President Xi Jinping augurs well for the yuan, Mizuho Securities Asia's Ken Cheung says in an email. The call alleviated fears of immediate U.S. tariff increases targeting China on the first day of Trump's second term, the director of forex strategy says. "The Trump-Xi call is positive for RMB sentiment as it shows that both Chinese and U.S. leaders are attempting to de-escalate tensions at the beginning of Trump's presidency," Cheung says. USD/CNH is 0.15% lower at 7.3247; USD/CNY is down 0.1% at 7.3152. ([email protected])0416 GMT - The Monetary Authority of Singapore will have no urgency to adjust its policy settings on Friday, says DBS Group Research. The Singapore dollar nominal effective exchange rate's decline from the top to the mid-point of its policy band doesn't signal an imminent policy shift, DBS says. The repositioning reflects the recent moderation in core inflation, which falls within the central bank's 2025 forecast of 1.5%-2.5% and the official 2025 forecast for the economy to slow to 1%-3% from 2024's 4% growth, DBS adds. Maintaining the Singapore dollar NEER's appreciation will help address cost of living issues, DBS says. The MAS's monetary policy is centered on Singapore's exchange rate.([email protected])0404 GMT - Taiwan's economy likely slowed on year in 4Q but DBS's economics team still expects growth to stay strong sequentially. It tips GDP growth at 2.0% on year in 4Q and at 4.5% on a quarterly seasonally adjusted annual basis, with scope for upside surprises. Exports growth remained steady in 4Q, driven by strong AI server demand and rush orders ahead of possible U.S. tariff hikes. Still, consumption growth seems to have weakened due to a cooling property market affected by the central bank's tightened monetary and credit policies, DBS adds. It stays confident in its 2025 GDP growth forecast of 3.0%, encouraged by recent positive earnings results and capex plans from chip maker TSMC.([email protected])