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Bitcoin
At a glance: Bitcoin rose over 2% over the weekend and another 1.46% this morning.
Details: Bitcoin prices surged past the previous peak to reach another record high of 104,621, ahead of interest rate decisions by major central banks due this week.
Bitcoin received a boost from President-elect Donald Trump, who on Friday officially confirmed his plans to create a strategic reserve for the leading digital currency.
Why it matters: The U.S. Federal Reserve and the Bank of England are set to announce interest rate decisions this week.
The Fed, which is set to announce its monetary policy decision on Wednesday, is widely expected to cut interest rates by 25 basis points. Expectations of a weaker US dollar, due to increased speculation of a rate cut, has supported Bitcoin because a weaker US dollar raises concerns about fiat currencies, while also making BTC/USD cheaper for foreign currency holders.
At its last meeting of the year, the Bank of England is expected to keep interest rates steady at 4.75%. The European Central Bank already announced its decision to cut key interest rates by 25 basis points last week, in line with expectations.
Maintaining the pro-cryptocurrency stance he announced during his campaign, Donald Trump on Friday proposed creating a national Bitcoin reserve similar to the U.S. gold and oil reserves. During an interview with CNN, Trump said: "We're going to do something great with digital currencies to maintain our global leadership and keep China or anybody else from getting ahead of us."
Republican Senator Cynthia Lummis has proposed a bill called the BITCOIN Act, which takes the name of the leading cryptocurrency as a term to promote innovation, technology and competitiveness through optimal investment nationwide. The bill, if passed, would result in the U.S. purchasing one million Bitcoins over the next five years to help reduce the country's $35 trillion national debt.
Although Trump's comments and the proposed bill have been criticized by many economists, they have led to a boost in Bitcoin prices.
Bitcoin prices rose 2.9% to $103,203, adding more than $2,000 on Sunday night. The world's largest cryptocurrency added 1.46%, or about $1,500, to reach a record high of $104,621 this morning.
What to watch: Investors will be watching for comments from Federal Reserve officials on the pace of the U.S. central bank's interest rate cuts next year. Markets will also monitor further comments from Donald Trump.
Markets today
Asian stocks will be in focus today ahead of the Bank of Japan's interest rate decision
Synopsis: Asian stock markets are mostly lower this morning, following a slew of data releases from China and Japan.
Details: Asian markets closed lower on Friday, with Asia's Dow Jones down 1.46%, Japan's Nikkei 225 down 0.95%, Hong Kong's Hang Seng down 2.09%, and China's Shanghai Stock Exchange down 2.01%. India's Sensex bucked the trend and rose 1.04%.
Japan's core machinery orders, excluding ships and electric power companies, rose 2.1% to 869.8 billion yen in October, after three consecutive months of decline. The figure also exceeded market expectations of 1.2% growth.
The Bank of Japan's composite PMI improved to 50.8 for December, from 50.1 in the previous month. This is the second consecutive month of growth in private sector activity and the strongest growth since September. The composite PMI was mainly services-driven, with the manufacturing sector index remaining in contractionary territory.
However, disappointing Chinese data releases put pressure on risk appetite. New home prices in China contracted for the seventeenth consecutive month, down 5.7% year-on-year in November. This followed a 5.9% drop in October, the steepest in nearly nine years.
China's industrial production expanded 5.4% year-on-year in November, slightly exceeding market expectations of 5.3%.
China's retail sales growth slowed to 3% year-on-year in November, from 4.8% in the previous month. The figure was well below market expectations of 4.6% and marked the weakest growth since August.
China's unemployment rate came in unchanged at 5% in November, in line with market expectations.
Asia's Dow Jones fell 0.35% to 4,158.10, the Nikkei 225 by 0.04%, to 39,455.51, Hong Kong's Hang Seng by 0.57% to 19,856.911, and India's Sensex by 0.09% to 82,055.77 this morning. China's
Shanghai recovered some of Friday's losses and rose 0.10% to 3,395.11.
What to watch: The Bank of Japan will announce its interest rate decision on Thursday with speculation among policymakers varying between keeping the benchmark rate steady and raising it.
Other Markets: European indices traded lower this morning, with the DAX 40, CAC 40, STOXX Europe 600 and FTSE 100 down 0.10%, 0.15%, 0.53% and 0.14%, respectively.
Trump
Other important news
President Volodymyr Zelensky stated that Russia has started using North Korean troops "in large numbers" in its war with Ukraine. The news sent the RUB/USD pair higher in this morning's forex trading session.
France's annualized inflation rate accelerated to 1.3% in November, from 1.2% in the previous month. The rise in inflation to a three-month high sent the CAC 40 down 0.2% on Friday.
Eurozone industrial production was flat in November, following a 1.5% drop in October and a 2% decline in September. The pause in contraction sent EUR/USD slightly higher in FX trading this morning.
India's total passenger car sales grew 4.3% year-on-year to 300,459 units in November, following 1.1% growth in the previous month. The acceleration in growth supported the INR/USD pair.
Saudi Arabia's annual inflation rate accelerated for the fourth consecutive month to 2.0% in November, from 1.9% in October. Although this is the highest reading since August 2023, SAR/USD remained broadly flat in this morning's FX trading session.
Today's economic releases
France's composite PMI preliminary reading (12:15 UAE time), composite PMI preliminary reading (13:00 UAE time), ECB's monetary analyst survey (13:30 UAE time), labor cost index (14:00 UAE time) and wage growth (17:15 UAE time) in the Eurozone, UK's composite PMI (13:30 UAE time), Canada's new homes index (17:30 UAE time), and the U.S: 15:00 UAE time) in the Eurozone, PMI Composite (13:30 UAE time) in the UK, Housing Starts (17:30 UAE time) in Canada, Empire State Manufacturing Index (18:00 UAE time) and PMI Composite (18:45 UAE time) in the US.