Time running out to avoid shutdown, cryptocurrencies plunge, and the dollar regains some ground.
Getting tight
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.
Crypto crash
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.
Dollar uptick
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.
Markets rise
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.
U.K. outlook
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.