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US stocks inch higher ahead of Fed; Bitcoin surges



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Corrects bitcoin, ethereum percentage moves in paragraph 23

US PMI shows business activity accelerating in Dec

China retail data badly misses forecasts

Europe PMIs still in contraction, but above previous month

Fed seen cutting 25bps, focus on future easing plans

BOE, BOJ and Norges seen on hold, Sweden to cut

Trump's Bitcoin reserve remarks send crypto higher

By Stephen Culp

NEW YORK, Dec 16 (Reuters) -Wall Street stocks inchedhigher in contrastto world shares on Mondayas U.S. Treasury yields eased and investors readiedfor a busy central bank week.

Bitcoin touched a new high, boosted President-elect Donald Trump suggesting he plans to set upa bitcoin strategic reserve.

The Federal Open Markets Committee (FOMC) is due to convene on Tuesday for its last monetary policy meeting of 2024, which is expected to conclude with a 25 basis point cut in the key Fed funds target rate.

Investors will scrutinize the Fed's Summary of Economic Projections (SEC) and its "dot plot," which maps out the central bank'sfuture rate cut path, which has become less certain in light of recent data showing sticky inflation amid a relatively robust economy.

A report from S&P Global showed that U.S. business activity has accelerated its expansion this month, despite ongoing weakness in the manufacturing sector.

"The U.S. economy is the best house on the block right now, if you look at Europe, depending on the country it appears to be floundering," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "And China has its own issues with the various stimulus measures they’re undertaking."

"It looks like we're going to get a rate cut in a couple days, and (investors) like the pro-growth agenda that the new administration is putting forth," Tuz added.

Soft retail sales data from China underscored the need for more aggressive stimulus from Beijing.

The Dow Jones Industrial Average .DJI rose 73.61 points, or 0.17%, to 43,904.10, the S&P 500 .SPX rose 25.05 points, or 0.41%, to 6,076.14 and the Nasdaq Composite .IXIC rose 149.34 points, or 0.75%, to 20,076.25.

French stocks weighed on European markets after Moody's unexpectedly downgraded the country's rating on Friday, offsetting signs of easing euro zone business conditions.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 2.05 points, or 0.24%, to 868.19.

The STOXX 600 .STOXX index fell 0.12%, while Europe's broad FTSEurofirst 300 index .FTEU3 fell 1.04 points, or 0.05%

Emerging market stocks .MSCIEF fell 2.97 points, or 0.27%, to 1,104.04. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed lower by 0.37%, to 583.21, while Japan's Nikkei .N225 fell 12.95 points, or 0.03%, to 39,457.49.

Yields on 10-year U.S. Treasuries eased from three-week highs as investors awaited the Fed's rate decision on Thursday.

The yield on benchmark U.S. 10-year notes US10YT=RR fell 1.8 basis points to 4.381%, from 4.399% late on Friday.

The 30-year bond US30YT=RR yield fell 2 basis points to 4.5935% from 4.614% late on Friday.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 1.1 basis points to 4.23%, from 4.241% late on Friday.

Anticipation ahead of the Fed meeting also had the greenback hovering near three-week highs, as investors reconcile themselves to the possibility that the central bank will signal a more measured pace of easing in the coming year.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.03% to 106.84, with the euro EUR= up 0.09% at $1.0511.

Against the Japanese yen JPY=, the dollar strengthened 0.4% to 154.26.

Bitcoin, which has surged more than 50% since the U.S. presidential election, touched a new high, topping $106,000 after Trump indicated the possible establishment of a bitcoin reserve fund.

"When I heard (the)idea of establishing a Bitcoin reserve, my first thought was why it’s necessary?" Tuz said. "Who does it help, other than people who are already own Bitcoin or are kind of in the Bitcoin sphere?"

Bitcoin BTC= gained 4.00% while Ethereum ETH= rose 2.81%.

Crude oil prices eased lower as soft data from China raised fears of softening demand from the world's largest oil importer.

U.S. crude CLc1 fell 0.36% to $71.03 a barrel and Brent LCOc1 fell to $74.20 per barrel, down 0.39% on the day.

Gold prices inched higher ahead of the central bank decision.

Spot gold XAU= rose 0.27% to $2,655.60 an ounce. U.S. gold futures GCc1 rose 0.24% to $2,662.50 an ounce.


Asia stock markets https://tmsnrt.rs/2zpUAr4

Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA

Flash PMI https://reut.rs/3ZTCQ3z


Reporting by Stephen Culp; Additional reporting by Wayne Cole in Sydney and Alun John in London; Editing by Alexander Smith

To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA
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