Long-end US bond yields, European shares rise with dollar; bitcoin above $90K
US bond yields rise as investors assess rates, inflation outlook
Bitcoin steadies above $90,000, underpinned by Trump's return
China's markets down despite Beijing's latest support measures
Updates at 0900 GMT
By Samuel Indyk and Rae Wee
LONDON, Nov 14 (Reuters) - Longer-dated U.S. bond yields rose alongside the dollar on Thursday as investors bet that President-elect Donald Trump's policies would fuel inflation and keep rates higher for longer, while European stocks rose on hopes of a better growth outlook.
Bitcoin BTC= jumped backabove $90,000, havingsurpassed that level in the previous session, turbocharged by Trump's return to the White House and the view that his administration will be a boon for cryptocurrencies.
The world's largest cryptocurrency, bitcoin last traded 2.3% higher at $90,654,having already soared more than 30% in the last two weeks.
In the broader market, traders responded to a U.S. inflation print that was in line with expectations by adding to bets ona Federal Reserve rate cut next month, though the monetary policy outlook for 2025 and beyond was clouded by Trump's return to office. FEDWATCH
Trump's plan for lower taxes and higher tariffs are expected to spur inflation and reduce the Fed's scope to ease interest rates, buoying the dollar.
Edison Research also projected on Wednesday that the Republican Party will control both houses of Congress when the President-elect takes office in January, which would enable Trumpto pursue his agenda largely unhindered.
Uncertainty over potentially larger U.S. deficits and stickier inflation wasreflected in longer-dated U.S. bond yields, which pushed higher on Thursday. US/
The benchmark 10-year Treasury yield US10YT=RR peaked at 4.483%, according to LSEG data, its highest since July 1.
The 30-year yield US30YT=RR hovered near a five-month peak and last stood at 4.6397%.
"Even though we're not optimistic Trump's policies will be a big boost to growth, they will increase indebtedness and boost inflation and that could change the Fed's plans," said Nordea chief analyst Jan von Gerich said.
On the shorter end of the curve, the two-year yield US2YT=RR, which typically reflects near-term rate expectations, ticked up as much as 3 basis points (bps) to 4.324%.
Markets are now pricing in an 83% chance of a 25 bps rate cut from the Fed next month, up from about 59% a day ago, according to the CME FedWatch tool.
However, expectations of Fed cuts next year have been pared back following Trump's election victory.
The dollar, meanwhile, followed longer-dated Treasury yields higher, ignoring the rising bets of a Fed cut in December which would typically be negative for the currency.
The greenback pushed the euro EUR=EBS to a one-year low of $1.0534 and broke above the 156 yen level JPY=EBS.
The dollar index =USD peaked at a one-year high of 106.77.
The Australian dollar AUD=D3 fell 0.33% to $0.6464, further pressured by a downside surprise on domesticemployment.
SHARES MIXED
European shares were mostly higher in early trade, contrasting with declines in Asia.
The Euro STOXX 50 .STOXX50E rose 0.6%, while the broader STOXX 600 .STOXX was up 0.2% after a number of earnings reports, including from Europe's largest telecoms group Deutsche TelekomDTEGn.DE and tech giant ASMLASML.AS.
In contrast, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.7%.
That came on the back of a fall in Chinese stocks as they struggled to make headway. The mainland CSI300 blue-chip index .CSI300 fell 1.7%,while the Shanghai Composite Index .SSEC fell a similar amount.
Hong Kong's Hang Seng Index .HSI slid 2%.
Trump nominatedChina hardliner Marco Rubio to be his secretary of state, signalling that a more hawkish stance towards Beijing could extend beyond tariffs.
"The Trump administration is taking shape and the names that are popping up are not doing anything to moderate expectations on what he'll deliver," said Nordea's von Gerich.
Separately, investors have beenleft unimpressed by Beijing's latest support measures to shore up China's ailing economy, after the finance ministry unveiled tax incentives on home and land transactions on Wednesday.
China's property market is grappling with a prolonged downturn since 2021 and remains a major drag on the world's second-largest economy.
"If you're considering buying a house or in the market for one, it helps, certainly. But it's not going to change the situation itself," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.
"It's not going to galvanise a lot of people to start (buying) homes. The inventory overhang is still there."
In line with the declines across Asia, Japan's Nikkei .N225 erased early gains to last trade 0.5% lower.
Elsewhere, oil prices were little changed. Brent crude futures LCOc1 were at $72.30 a barrel, while U.S. West Texas Intermediate crude (WTI) futures CLc1 traded at $68.43. O/R
Spot gold XAU= fell 0.7% to $2,555.99 an ounce. GOL/
World FX rates YTD http://tmsnrt.rs/2egbfVh
Asian stock markets https://tmsnrt.rs/2zpUAr4
Reporting by Samuel Indyk and Rae Wee
Editing by Shri Navaratnam, Kim COghill and Gareth Jones
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
