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Time is running out to avert a government shutdown, cryptocurrencies plunge, and the dollar recovers some ground. Here are some of the things people in markets are talking about today.
Republican leaders are struggling to get agreement on a funding bill that will avoid a government shutdown on Friday after President Donald Trump and Democratic lawmakers seem to move further apart on a deal that would shield young undocumented immigrants from deportation. GOP lawmakers are weighing another short-term measure, which would extend funding to Feb. 16, according to a person familiar with the negotiations.
It’s an ugly session for investors in digital currencies, with all of the major tokens suffering large reversals this morning. Bitcoin saw an almost 20 percent decline, dropping as low as $11,199, while ethereum and litecoin plunged more than 20 percent. While there is no obvious driver for this morning’s moves, yesterday Bloomberg reported that China was escalating its crackdown on trading in the digital ‘assets’ while South Korea’s finance minister repeated it may ban local cryptocurrency exchanges.
The greenback extended a four-day decline during yesterday’s U.S. holiday, weakening against every major currency with Bloomberg’s dollar index approached its lowest level in three years. That trend is seeing a modest reversal this morning as the dollar regains some of the ground lost in recent sessions, trading at $1.2212 to the euro and $1.3749 to the pound. Investors are also keeping an eye on the yuan, which has risen to the highest level in two years amid speculation authorities in China may introduce new measures to cool currency gains.
Overnight, the MSCI Asia Pacific Index added 0.5 percent, while Japan’s Topix index closed 0.6 percent higher and the Hang Seng Index climbed 1.8 percent to a record high. In Europe, the Stoxx 600 Index was 0.5 percent higher at 5:45 a.m. Eastern Time as earnings season kicks off in the region. S&P 500 futures added 0.5 percent, the 10-year Treasury yield was at 2.524 percent and gold was lower.
There was an improvement in the inflation reading for the U.K. this morning when December data showed a slight decline to 3 percent from the previous month’s 3.1 percent. Respondents to a Bloomberg survey showed little optimism for British growth prospects, with a median forecast for a 1.4 percent expansion both this year and next. The main driver of the economic outlook remains the Brexit negotiations, with JPMorgan Chase & Co. flagging a “non-negligible risk” that talks with the EU collapse as it remains bearish on the pound.
What we've been reading
This is what's caught our eye over the weekend.
- Odd Lots: This explains why modern markets developed where they did.
- This year looks different for U.S inflation.
- U.S. Treasury’s list of Putin oligarchs jolts Russia’s elite class…
- … As the country considers biggest spending spree since Putin re-election.
- How to leave credit party in full swing poses $13 trillion conundrum.
- Xi Jinping’s debt clampdown has left a trail of dead projects.
- After Trump and Brexit, Italy falls for nostalgia.