Bitcoin Gains as Investors Weigh Fed Rate Hike Bets — Market Talk
0220 GMT - Bitcoin gains in Asia. A sharper-than-expected rise in U.S. producer prices has revived expectations of further tightening from the Fed, says VT Markets Dubai's Mahmoud Mashal in a note. However, Fed officials have signaled little urgency to act, reducing the implied probability of an October hike, the senior market analyst adds. A Fed hold decision should keep Treasury yields contained and provide some support to bitcoin. Higher borrowing rates tend to weigh on risk appetite, hurting cryptocurrencies. Bitcoin is 1.8% higher at $82,365.86.([email protected])0158 GMT - Communication from the Reserve Bank of Australia this week is likely to reassert its hawkish stance. Attention will be on remarks on Wednesday by Andrew Hauser, deputy governor of the RBA. Hauser only recently said that the RBA will do what is required to get inflation under control, and since then the central bank has delivered a further interest-rate increase. But instead of toning things down, Hauser is more likely to remain hawkish, warning that the RBA has lost patience. There's also the problem that 3Q inflation data due at the end of this month appears likely to be troubling for policy makers. ([email protected]; @JamesGlynnWSJ)0148 GMT - The yuan is steady against the dollar in offshore and onshore markets ahead of the release of major Chinese economic data such as 3Q GDP due this morning. Focus is on the data, especially "whether export resilience continues to offset sluggish domestic demand," two strategists at OCBC Group Research say in a research report. "We maintain a constructive bias on RMB," the strategists add. The dollar is steady at 6.6851 offshore yuan after it fell below the 6.6900 yuan level last Friday for the first time since July 2022, LSEG data show. ([email protected])0138 GMT - Malaysia's exports likely rose 41.3% on year in September, slowing from the 45.5% increase in August, according to the median estimate of six economists polled by The Wall Street Journal. Imports likely rose 40.8%, leading to a trade surplus of 28.55 billion ringgit. Export growth was supported by robust demand for electrical and electronics products, while oil and gas shipments likely remained strong, say DBS economists Taimur Baig and Radhika Rao in a note. However, a high base of comparison likely limited the pace of expansion, they add. The data is due later Monday.([email protected])0136 GMT - MUFG Bank maintains its bias for further weakness in Indonesian rupiah against the dollar, according to a research report. "Indonesia remains one of our key concerns," senior currency analyst Lloyd Chan says. "Our existing framework points to a combination of higher U.S. yields, weaker external balances from elevated oil prices and a tougher trade-off for Bank Indonesia," Chan says. MSCI-related worries add "another layer of pressure" on the rupiah, the analyst says. "MSCI has launched a consultation to potentially reclassify Indonesia directly from Emerging Market to Standalone Market status," Chan notes. MUFG Bank currently forecasts the dollar at 18,350 rupiah in 4Q 2026 and 18,500 in 1Q 2027. The dollar is 0.2% lower at 18,020.50 rupiah, according to FactSet data. ([email protected])0131 GMT - Malaysia's consumer inflation likely rose 2.0% on year in September, gaining slightly from 1.9% in August, according to the median estimate of six economists polled by The Wall Street Journal. The slight increase likely reflects higher unsubsidized fuel costs, partly offset by softer food prices and renewed electricity relief measures, says ANZ economist Sanjay Mathur in a note. Core inflation is estimated to have remained broadly stable at 1.7%, as domestic demand remains too weak to generate significant price pressures, he says. Despite the benign inflation outlook, Bank Negara Malaysia is expected to raise its policy rate by 25 bps next month as part of policy normalization, he adds. The CPI data for September are due later Monday. ([email protected])0106 GMT - The yen consolidates against other G-10 and Asian currencies in early trade, but may be supported by a risk-off mood. An AI-led sell-off dominated trade on Friday, NAB's Rodrigo Catril says in commentary. This has prompted a "broad risk sentiment deterioration," the senior FX strategist says. "Investors are increasingly questioning whether future revenue can justify the capital and financing required for data centers, chips and power infrastructure," Catril adds. The U.S. dollar edges 0.1% lower to 157.88 yen, while the Australian dollar is flat at 109.92 yen, LSEG data show. ([email protected])0052 GMT - JGBs rise in price terms in early Tokyo session amid artificial-intelligence-related credit concerns. "[We are] watching whether [these concerns] could serve as a catalyst for investors to move away from the excessive avoidance of duration risk, having favored credit and spread risk over duration risk," two members of J.P. Morgan's Japan Markets Research say in a research report. "Assuming the recent credit concerns do not develop into a major risk-off episode, we maintain our view that excessive rate hike pricing will first be unwound at the front end, followed by a decline in longer-term yields, they add. Ten-year JGB yield is down 2.5 bps at 2.905%. ([email protected])0030 GMT - Japanese stocks are lower in early trade, tracking Wall Street's losses last Friday. A theme from Friday has been a further sell-off in U.S. technology shares, Commerzbank Research analysts say in a research report. This reflects growing concerns over the sustainability of AI-related investment, the analysts add. Among the worst performers on Japan's benchmark index, Sumitomo Electric Industries is down 4.9%, Taiyo Yuden is off 5.0%, and Lasertec is 4.9% lower. The dollar is at 157.82 yen versus Y157.86 around Friday's Tokyo market close. The Nikkei Stock Average is down 1.8% at 64172.19. ([email protected])Japanese stocks may fall, tracking Wall Street's losses on Friday. "Nikkei May Fall, Tracking Wall Street's Losses — Market Talk," at 2338 GMT, incorrectly said they may track Wall Street's losses overnight.2338 GMT - Japanese stocks may fall, tracking Wall Street's losses on Friday. Concerns among investors including those in Japan appear to be mounting over whether companies can generate sufficient AI-related profits to meet increasingly rising credit obligations. Nikkei futures opened 1,615 points lower at 63990 on the SGX. The dollar is at 157.83 yen versus Y157.86 around Friday's Tokyo market close. The Nikkei Stock Average closed 1.4% higher at 65324.29 on Friday. ([email protected]) Corrections & AmplificationsThis article was corrected at 0017 GMT to reflect that Japanese stocks may fall, tracking Wall Street's losses on Friday. The original article incorrectly said they may track Wall Street's losses overnight.2204 GMT - Australian 10-year government bond yields have been drifting lower as traders question the artificial intelligence trade, says Jack Chambers, debt strategist at ANZ. Fed speakers have also appeared more cautious about further hikes, he adds. Still, this could be only a temporary reprieve as over time these factors will reverse, he says. ANZ expects the Reserve Bank of Australia and Fed will both hike at their next meetings and it seems pre-emptive to call time on the AI trade, Chambers adds. Aussie bond yields will likely be higher by the end of the year, he says. ([email protected]; @JamesGlynnWSJ)