Fed Independence Concerns Could Lift Bitcoin to Record HighMarket Talk

0958 ET - Bitcoin could rise towards an all-time high if concerns over the Federal Reserve's independence persist, Standard Chartered's Geoff Kendrick says in a note. The cryptocurrency is a hedge against risks to the existing financial system due to its decentralized ledger, he says. This is currently playing out via risks to U.S. Treasurys after President Trump suggested he could remove Fed Chair Jerome Powell over his desire for interest rate cuts. The yield premium investors are demanding to buy long-dated Treasurys versus short-dated ones has risen sharply and this is benefiting bitcoin, Kendrick says.Bitcoin rises to a six-week high of $90,459, according to LSEG. Standard Chartered expects bitcoin to rise to $200,000 by end-2025. ([email protected])0957 ET - Raiffeisen Bank International plans to redeem its 8.659% additional tier 1 (AT1) bond in June, it said in a press statement Tuesday. However, it plans to extend the 4.500% AT1 bond whose first reset date is on June 15. ING's Suvi Platerink Kosonen says these two decisions make sense "from a purely economic perspective." The 4.500% bond has a "clearly lower" reset rate at 388 basis points compared with the 8.659% bond at 595 basis points, she says in a note. On that basis, Raiffeisen's AT1 bond with a 6.00% coupon rate is likely to be called on its June 2026 call date. The bond has a "rather elevated" reset level of 645 basis points, making a call more likely than an extension, she says. ([email protected])0953 ET - The outlook for Canada is a little less bleak as the Trump administration's new tariff regime sets in, reckons TD Securities' Robert Both. The macro strategist says that while uncertainty remains heightened, the country's didn't see any new broad-based tariffs on April 2 and Ottawa has pared back its response to Trump's tariffs over the last month. So even as softer U.S. growth and lower oil prices have introduced new headwinds, direct tariff impacts appear much smaller than previously anticipated, Both says. TD expects Canadian GDP growth of 1.3% this year, slowing to 0.9% in 2026. With growth stagnant through mid-year, the odds of a recession are as high as 45%, Both adds. ([email protected]; @RobbMStewart)0929 ET - The recent selloff in U.S. Treasurys has weakened President Trump's hand in any potential negotiations with other countries to devalue the dollar, Rabobank forex strategist Jane Foley says. "If the Treasury market is more vulnerable, then he cannot bully everyone to the same degree." Trump earlier this month announced a 90-day pause in higher reciprocal tariffs against most countries following a sharp fall in Treasurys. It comes amid speculation Trump could seek a new Plaza Accord, dubbed the Mar-a-Lago Accord, to depreciate the dollar. If that were to happen it would probably be within the 90-day tariff-pause period in exchange for trade deals. This looks unlikely, however, following Trump's response to the turmoil in Treasurys, Foley says. ([email protected])0853 ET - The Treasury yield curve flattens a little after yesterday's sharp steepening, while the dollar steadies at a weak level as Wall Street worries about the Federal Reserves' independence. President Trump lambasted Chair Powell yesterday in social media. Gold and the yen are sought after as safe havens. On the data front, April's Richmond Fed business activity index is expected, in a WSJ survey, to be a negative 6.5, after March's minus 4. The 10-year yield is at 4.390% and the two-year at 3.794%. The WSJ Dollar Index rises 0.1% but remains near the lowest level since September. The greenback is at the weakest relative to the yen since 2023. Gold is $3,466 an ounce. ([email protected]; @ptrevisani)0712 ET - Base metal prices are mixed, with LME three-month copper up 0.8% at $9,326 a metric ton and LME three-month aluminum flat on $2,384.50 a ton. Copper has been climbing on a weaker U.S. dollar and early signs of Chinese demand, SP Angel analysts say in a note. A weaker greenback makes it cheaper for international buyers to purchase dollar-denominated commodities, typically boosting demand. Refined copper production in China rose 8.6% on year in March to 1.25 million metric tons, possibly a result of improved margins, SP Angel says. Alternatively, smelters might have hiked output on expectations of improving demand fundamentals from the Chinese property market, SP Angel says. ([email protected])0643 ET - Sterling looks well positioned to profit from market volatility amid chaos in the U.S., Ebury economist Enrique Diaz-Alvarez says in a note. Sterling should benefit from its relatively low exposure to U.S. tariffs, resilient demand in the U.K. economy and the prospect of closer U.K.-EU ties, he says. Meanwhile, this week looks set to be "another interesting one" for sterling. The preliminary April U.K. purchasing managers' index survey is due Wednesday followed by U.K. retail sales data on Friday. Sterling falls 0.1% to $1.3372 after hitting a nearly seven-month high of $1.3424 against a weaker dollar Monday, according to FactSet. The euro falls 0.1% to 0.8600 pounds. ([email protected])0613 ET - The cost of insuring euro credit against default using credit default swaps climbs after President Trump critisized U.S. Federal Reserve chair Jerome Powell for not lowering interest rates, sparking concerns about a threat to central bank independence. "Global markets have been shaken by a sharp selloff in U.S. assets driven by political pressure on the Federal Reserve," IG analysts say in a note. The iTraxx Europe crossover index, which tracks euro junk bond credit default swaps, rises 7 basis points to 373 basis points, S&P Global Market Intelligence data show. The iTraxx Europe Main index, which tracks euro investment-grade CDS, climbs 1 basis point to 73 basis points. ([email protected])0612 ET - The Japanese yen should remain supported in the near-term after hitting a seven-month high against the dollar amid concerns about the risk of Federal Reserve independence, ING's Francesco Pesole says in a note. The yen looks attractive as a safe-haven substitute to the dollar after President Trump renewed his calls for immediate interest-rate cuts, he says. "The yen stands to benefit a bit more than the euro from dollar outflows, thanks to a stronger domestic picture." Meanwhile, upcoming data including Tokyo inflation on Friday should argue for gradual rate rises by the Bank of Japan, he says. The dollar falls 0.4% to 140.361 yen after hitting a low of 139.888 earlier, according to FactSet. ([email protected])0601 ET - The U.S. dollar's weakness is expected to be a key topic as global finance and central bank leaders meet in Washington, D.C., this week, DBS Group Research's Philip Wee says in a note. The senior currency strategist says the fate of the DXY dollar index, which measures the U.S. dollar against a basket of currencies, hinges on the euro, its most significant component. Having appreciated more than 10% year to date against the dollar, the euro faces major resistance near 1.15, Wee adds. EUR/USD is last 0.2% lower at 1.1490. The DXY index, down more than 9% this year, is last 0.1% higher at 98.34. ([email protected])0549 ET - President Trump's tariffs will have an unclear effect on price inflation in the U.K. but are more likely to prove disinflationary, Bank of England policymaker Megan Greene says. "There are risks on both sides," Greene tells Bloomberg TV. But those risks lean more toward taking inflation lower, she says. If U.S. tariffs on U.K. exports are lower than on goods from the European Union, that effect is likely to be disinflationary as lower-cost imports enter the country in greater number, she says. ([email protected]; @joshualeokirby)0548 ET - The Federal Reserve is expected to cut interest rates at least four times in the current cycle, although rates are expected to be left on hold in May, market pricing on LSEG show. U.S. President Trump has put pressure on the Fed, saying it was wrong not to have cut rates again. "This intensifying debate on central bank independence yesterday added a new layer of uncertainty for U.S. markets," say KBC Bank analysts in a note. Markets seem to assume that the Fed will eventually give in to political pressure despite its recent cautious stance, the analysts say. Money markets price in slightly more than three Fed rate cuts this year and almost five through July 2026, LSEG data show. 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