Bitcoin Rises But Gains Remain Limited — Market Talk
0646 GMT - Bitcoin rises slightly but struggles for a meaningful recovery as investors balance improving institutional adoption against deteriorating macroeconomic conditions, Zaye Capital Markets analyst Naeem Aslam says in a note. "President Trump's declaration that the U.S. is not negotiating with Iran, alongside warnings that further developments could occur relatively soon, has intensified concerns about Middle Eastern energy supplies." Nevertheless, U.S. spot bitcoin exchange traded funds attracted about $1.08 billion across three sessions, suggesting institutional accumulation has continued, he says. U.S. PMI data at 1345 GMT could help determine bitcoin's moves ahead of the Federal Reserve's October 28 decision, he says. Bitcoin rises 0.7% to $81,738, LSEG data show.([email protected])0625 GMT - The dollar recovers after reaching a three-week low against a basket of currencies on Thursday as Treasury yields rise and oil prices jump. Fresh tensions in the Middle East propelled Brent crude prices to their highest levels since May, above $114 per barrel. Higher oil prices support the dollar as the U.S. is a net oil exporter while the currency tends to act as a safe haven. Concerns about French debt and civil unrest also weigh on the euro and lift the dollar. The DXY dollar index rises 0.1% to 101.691, having reached a three-week low of 101.446 Thursday driven by concerns about AI investments. ([email protected])0602 GMT - The key catalysts for the currency market for next week will include whether tech stocks extend losses on AI-related jitters, whether French bond yields rise further due to fiscal concerns, and upcoming policy meetings by the Bank of Japan and Federal Reserve, Mizuho Securities analysts say. While higher crude oil prices could make the BOJ more hawkish, lower stock prices imply a tightening of financial conditions and serve as a dovish factor, they say. "If there is a clear hint about the possibility of a December rate hike-which is nearly 80% priced in by the OIS market-it would be seen as hawkish and could put upward pressure on the yen," they say, adding that without such a signal, the Japanese currency could face renewed weakness. Mizuho expects the dollar to trade around Y158.00 at the end of December. The pair was last trading at Y156.95. ([email protected])0559 GMT - The European Central Bank would not hesitate to intervene if monetary policy transmission were impaired, but TwentyFour Asset Management doesn't see evidence of this happening yet, says portfolio manager Felipe Villarroel in a note. French government bond yields and spreads have hit key levels, raising investor concerns about potential contagion. "If there were disorderly reactions in Italian and other government bond markets, then the ECB's first steps would likely be an attempt to calm markets with verbal intervention, or a reduction or termination of its quantitative tightening (QT) program," he says. ([email protected])0558 GMT - Investors remain cautious over French government bonds, or OATs, waiting for greater clarity or even better entry levels, Societe Generale rates strategists say in a note. Although the strategists see some selective appetite for front-end OATs, they remain defensive on OATs given the fiscal and political risks, they say. They also warn of new waves of volatility, "given uncertainties about next social protests, the budget adoption and investors not yet keen to add a lot of risk." ([email protected])0532 GMT - The market has real concerns about the French fiscal situation, says Domini Impact Investments' Maria Llerena, as 10-year OAT yields rose above 5% for the first time in 24 years this week. With bond yields at or around 5%, French debt is now trading at yields above those of Italy and Greece, the director of financial research says. "Debt to GDP is close to 120% and the country has been running deficits above 5% for four straight years," she says, adding that protests, a government trying to pass a budget and presidential elections in the spring of 2027 "complicate things further." ([email protected])0521 GMT - Nomura expects European Central Bank President Christine Lagarde to refrain from commenting on France at her post-ECB meeting press conference on Oct. 29. She is expected to "instead state that the ECB has the tools necessary to lean against unwarranted market moves that are disorderly and hamper the transmission of the ECB's monetary policy," says Nomura's analyst team. French government bonds have come under hefty selling pressure in recent weeks amid skepticism over the government's capacity to narrow its budget deficit to 5% of gross domestic product in 2027, particularly given recent violent protests. ([email protected])0517 GMT - Eurozone government bond supply in 2027 is expected to reach a record high of 1.583 trillion euros, Commerzbank's Hauke Siemssen and Erik Liem say in a note. This issuance volume will be driven primarily by higher redemptions, which will amount to around 967 billion euros, an increase of 65 billion euros over 2026, the rates strategists say. "Budget consolidation remains in the back seat in most European countries in 2027 amid elevated defense spending plans, support measures and a lack of welfare reforms," they say. Refinancing needs are also on an upward trajectory as bond redemptions pick up noticeably, they add. ([email protected])0516 GMT - Germany looks set in 2027 to emerge as the largest eurozone government bond issuer for the first time, with an estimated gross bond supply of 400 billion euros, say Commerzbank's Hauke Siemssen and Erik Liem in a note. "With the budget deficit and special funds for defense and infrastructure, net financing needs look set to rise to above 200 billion euros," the rates strategists say. Furthermore, Bund redemptions of 238 billion euros need to be refinanced, they say. ([email protected])0502 GMT - The dollar will likely trade between 4.08 and 4.09 ringgit next week, with investors weighing the Fed's policy outlook against persistent inflation risks from elevated oil prices, Kenanga economists say in a note. They expect the Fed to hold rates next week and expect a hike in December, while escalating Middle East tensions could keep Brent crude above $110 a barrel. Reports of potential U.S. strikes on Iranian energy and nuclear sites around the midterms could also keep markets cautious, they note. However, concerns over debt linked to AI investments may limit gains in U.S. bond yields and the dollar, they add. Kenanga expects the dollar to face resistance against the Malaysian currency at 4.087 ringgit, with support at 4.080 ringgit. The dollar is flat at 4.0840 ringgit. ([email protected])0448 GMT - Japanese businesses are less upbeat about output in the year ahead as inflation risks continue to generate concerns about the outlook, S&P Global's flash PMI shows. The October survey indicates private-sector business activity grew for a 19th straight month, but stayed flat from September and weaker than the year-to-date average. Sales growth in the goods-producing sector was the slowest since March, while growth gathered pace in the services sector but remained modest. Input cost inflation edged higher during the month, while the Bank of Japan once again hiked interest rates, says Usamah Bhatti, economist at S&P Global Market Intelligence. Against that backdrop, it will be important to monitor how domestic demand conditions evolve, Bhatti says. ([email protected])0422 GMT - The Bank of Japan is likely to hike rates in December 2026, and in March and July 2027, taking the policy rate to 2%, according to BofA Securities' baseline scenario. "As rates approach that level, we expect more debate within the [Bank of Japan] board about the lagged impact on financial conditions," BofA says. Higher borrowing costs could also prompt renewed government pushback. However, expectations of delayed hikes may weaken the yen and add to inflation pressures, which could potentially increase the risk of a terminal rate above BofA's baseline, it says. ([email protected])