Trump Set to Designate Cryptocurrency as National Priority

Cryptocurrency

Summary:

US President-elect Donald Trump is planning to release an executive order elevating crypto as a policy priority and giving industry insiders a voice within his administration, according to people familiar with the plans.

The order is expected to name crypto as a national imperative or priority — strategic wording intended to guide government agencies to work with the industry, according to people familiar with the matter. It is also slated to create a crypto advisory council to advocate for the industry’s policy priorities, said the people who requested anonymity to discuss an executive order that is not yet public.

Trump has enjoyed strong support from the crypto industry, which has a powerful presence in Washington, backed by well-funded political action committees. A slew of companies, including Coinbase and Ripple, have donated to Trump’s inaugural committee in recent months. On Friday, days before the inauguration, the industry is hosting an “inaugural crypto ball” in support of Trump.

The executive order would mark a sea change for crypto, which has been a target for investigations during President Joe Biden’s administration following a spate of high-profile fraud cases, including the bankruptcy of the FTX exchange. Federal agencies including the Securities and Exchange Commission filed more than 100 enforcement actions against the sector in recent years, and banking regulators made it difficult for crypto companies to work with financial institutions.

Still under discussion for inclusion in the executive order is a directive for all government agencies to review policies about digital assets and possibly pause any litigation involving crypto, the people said. Stopping legal actions that have targeted a range of companies from Binance Holdings Ltd, the world’s biggest crypto exchange, to startup Ripple Labs Inc is a top priority for the industry.

Also under consideration is the creation of a national bitcoin stockpile, which would encompass the government’s existing holdings of the world’s biggest cryptocurrency, the people said. The US government currently holds nearly US$20 billion (RM90 billion) worth of bitcoin, confiscated as part of various investigations, according to analytics company Arkham. Bitcoin has rallied almost 50%, to above US$100,000, since the November election in part on hopes that such a stockpile would be created. The token more than doubled in price in 2024.

The people cautioned that the executive order, which could come as soon as Monday, is not final and could change before it is made public. A representative for Trump did not immediately respond to a request to comment.

Trump has vowed to issue a bevy of executive orders across a range of disparate industries and issues within his first few days back in office.

“What I think Donald Trump is going to do is signal that the US is back and we are ready to lead in this industry,” said Kara Calvert, the vice-president for US policy at Coinbase Global Inc, the country’s biggest cryptocurrency exchange. “What it’s signalling to other countries is be careful, or you won’t keep up.”

Despite regulatory setbacks under Biden, crypto in the US expanded, with major financial companies including the world’s largest asset manager, BlackRock Inc, launching spot bitcoin and Ether exchange-traded funds last year. BNY has been working to expand its crypto custody effort, and Cantor Fitzgerald announced plans to launch a bitcoin financing business.

Trump embraced the crypto industry during the presidential campaign last year. In July, he headlined a bitcoin conference, where he promised to make the US the crypto capital of the world. Trump-branded collections of non-fungible tokens have been coming out for several years, and last year he and his sons announced a crypto effort called World Liberty Financial, which is supposed to let people earn and borrow crypto, but has yet to provide those services.

Source: Theedgemarkets

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Warren Takunda

Commodity

Oil prices rose on Friday, heading for a fourth consecutive week of gains as the latest U.S. sanctions on Russian energy trade hit supply, pushing up spot trade prices and shipping rates.

Brent crude futures were trading 55 cents or 0.7% higher at $81.84 per barrel as of 0804 GMT and have gained 2.6% so far this week.

U.S. West Texas Intermediate crude futures were up 72 cents or 0.9% at $79.4 a barrel, having climbed 3.6% for the week.

The Biden administration last Friday announced broader sanctions targeting Russian oil producers and tankers and followed that with more measures against Russia's military-industrial base and sanctions-evasion efforts.

Analysts estimate that around 10% of the world's oil tanker fleet is now subject to U.S. sanctions. The drop in shipping capacity and a ban imposed by Shandong Port Group on U.S.-sanctioned tankers from calling into its ports has tightened oil supply and pushed buyers to scramble for replacement barrels.

"Supply concerns from U.S. sanctions on Russian oil producers and tankers, combined with expectations of a demand recovery driven by potential U.S. interest rate cuts, are bolstering the crude market," said Toshitaka Tazawa, an analyst at Fujitomi Securities.

"The anticipated increase in kerosene demand due to cold weather in the U.S. is another supportive factor," he added.

Investors are also anxiously waiting to see if more supply disruptions will emerge after Donald Trump returns to the White House next Monday.

"Mounting supply risks continue to provide broad support to oil prices," ING analysts wrote in a research note, adding that the new Trump administration is expected to take a tough stance on Iran and Venezuela, the two main suppliers of crude oil.

Expectations for better demand lent some support to the oil market. Data showed inflation easing in the United States, the world's biggest economy, bolstering hopes of interest rate cuts.

Inflation is likely to continue to ease and possibly allow the U.S. central bank to cut interest rates sooner and faster than expected, Federal Reserve Governor Christopher Waller said on Thursday.

Meanwhile, data on Friday showed China's economy matched the government's ambitions for 5% growth last year, although many Chinese feel their living standards have worsened.

China's oil refinery throughput in 2024 fell for the first time in more than two decades barring the pandemic-hit year of 2022, government data also showed on Friday, as plants pruned output in response to stagnant fuel demand and depressed margins.

Also weighing on oil prices were remarks by Yemen maritime security officials who said the Houthi militia is expected to announce a halt in its attacks on ships in the Red Sea in the wake of a ceasefire deal in the war in Gaza between Israel and the militant Palestinian group Hamas.

The attacks have disrupted global shipping, forcing firms to make longer and more expensive journeys around southern Africa for more than a year.

Source: Reuters

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Warren Takunda

Stocks

London stocks had extended gains by midday on Friday as weaker-than-expected retail sales data underpinned rate cut expectations.

The FTSE 100 was up 1.1% at 8,487.64.

Figures released earlier by the Office for National Statistics showed that retail sales fell 0.3% on the month in December following a downwardly-revised 0.1% increase in November. Economists were expecting a 0.4% jump.

ONS senior statistician Hannah Finselbach said: "This was driven by a very poor month for food sales, which sank to their lowest level since 2013, with supermarkets particularly affected."

The ONS said falls in supermarkets were partly offset by a rise in non-food stores, such as clothing retailers, which rebounded from falls in recent months.

For the fourth quarter, sales volumes fell by 0.8% compared with the third quarter, but rose by 1.9% versus the same period a year earlier.

The retail sales figures rounded off a trio of disappointing releases from the ONS this week. On Thursday, data showed the economy grew 0.1% in November following contractions of 0.1% in October and September. This was below expectations of 0.2% growth, however.

On Wednesday, it was revealed that UK inflation unexpectedly eased in December after two months of increases.

Consumer price inflation rose 2.5%, down from 2.6% in November, and versus expectations for it to remain unchanged.

Meanwhile, core inflation - which excludes food and energy - declined to 3.2% from 3.5%, versus expectations for a smaller drop to 3.4%.

Services inflation eased to 4.4% in December from 5% the month before. Economists were expecting 4.8%.

Kathleen Brooks, research director at XTB, said the market is now predicting a 91% chance of a rate cut from the Bank of England next month, versus a 73% chance at the start of the week.

"The interest rate futures market is also on the way to pricing in nearly three rate cuts from the BOE this year, earlier this week there had been less than two cuts priced in," she said.

"As we mentioned, the market appears to be moving closer to the BOE’s expectation of four rate cuts in 2025."

In equity markets, Smiths Group jumped to the top of the FTSE 100 as US activist investor Engine Capital called on the diversified engineer to explore a breakup.

In a letter sent to the board, Engine Capital - which holds a 2% stake in Smiths - said the company should launch a strategic review.

"We believe that Smiths has significant value that is currently unrealised due to its conglomerate structure, and that it is time for the board to announce a strategic alternatives process to maximise value for shareholders," it said.

Engine Capital said a sale of the entire company or its four business could deliver a significant premium to the current share price.

Ladbrokes owner Entain rose after William Hill and 888 owner Evoke said that FY24 EBITDA was set to be at the high end of guidance and "well above" market expectations after a strong performance in the fourth quarter.

Rio Tinto and Glencore were in focus following reports the two miners have been discussing a potential merger. According to Bloomberg News, which cited people close to the matter, discussions were at an early stage but it was unclear whether these talks were still ongoing.

According to sources cited by the Financial Times, talks were held as recently as October.

Ninety One advanced as it said third-quarter assets under management rose to £130.2bn as at the end of the December from £127.4bn at the end of September.

Big Yellow was also in the black even as the self-storage group delivered a cautious outlook on trading reporting a drop in occupancy levels over the third quarter, and said it plans to cut jobs as it deals with higher National Insurance payments to employees from April.

Source: Sharecast

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ACY

Economic

Gradual Policy Adjustments Amid Uncertainty

The December 2024 FOMC minutes underscored a measured approach to rate cuts. Policymakers emphasized the importance of aligning monetary policy with incoming economic data, suggesting that while the current trajectory includes easing, the pace may decelerate. This perspective reflects heightened vigilance toward inflation, which has proven more persistent than anticipated in earlier projections. Despite these concerns, the Committee acknowledged that progress has been made toward its 2% inflation target.

Governor Waller echoed this sentiment, emphasizing the dual mandate of price stability and maximum employment. He noted, “If the outlook evolves as expected, further rate cuts may be appropriate. However, the pace of adjustments will depend on measurable progress in reducing inflation without undermining labour market strength.”

Inflation: Progress with Persistent Challenges

Recent data reveals that inflation remains elevated, albeit lower than its peak levels. Core inflation metrics, particularly the Personal Consumption Expenditures (PCE) index, signal gradual improvement. However, the minutes highlighted upside risks, including potential shifts in trade and immigration policies, geopolitical tensions, and persistent price pressures in specific sectors like shelter.

Participants expressed concern over stalled disinflationary momentum, with several noting the difficulty in distinguishing between temporary and persistent inflationary factors. As noted in the minutes, “A few participants remarked that it might be challenging to differentiate persistent influences on inflation from temporary shocks, such as those stemming from changes in trade policy.”

Labor Market Resilience

The U.S. labour market remains robust, with unemployment rates hovering near historical lows. Nonetheless, signs of cooling are emerging. Indicators such as job vacancies, quits rates, and turnover suggest a gradual easing in labour demand. The FOMC noted that current conditions align with its longer-term employment goals, though risks to labour market stability remain.

Economic Growth and External Influences

Economic activity continues to expand at a solid pace, driven by strong consumer spending and favourable supply-side developments. However, uncertainties around global growth and potential policy shifts under the incoming administration add complexity to the economic outlook. Policymakers highlighted the need for caution, particularly considering potential trade and fiscal policy changes that could impact inflation and growth trajectories.

Policy Outlook: Data-Driven Flexibility

The Committee reaffirmed its commitment to a data-driven approach, emphasizing flexibility in responding to evolving economic conditions. The minutes stated, “Monetary policy decisions are not on a preset course and remain conditional on the economy’s performance and outlook.” This approach reflects a careful balance between fostering economic stability and mitigating inflationary risks.

Looking ahead, the FOMC’s baseline scenario includes a gradual path toward a neutral policy stance. However, the pace of adjustments will hinge on achieving sustainable progress toward the dual mandate. The minutes also acknowledged the importance of clear communication to manage market expectations effectively.

The bottom of the line is that

The Federal Reserve’s is doing a cautious yet proactive approach to the monetary policy in 2025. While progress on inflation and economic growth provides a foundation for optimism, persistent uncertainties call for measured and adaptable policy actions. As the Fed navigates these challenges, its commitment to price stability and maximum employment remains steadfast, guiding its efforts to support a resilient and balanced economy.

To stay updated on all economic events of today, please check out our Economic calendar

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ACY

Forex

Currency Strength

United States: Easing Inflation but Lingering Concerns

The latest Producer Price Index (PPI) report from the US has introduced fresh concerns about inflationary persistence, despite headline figures falling below expectations. Core and core-ex-trade PPI metrics also weakened, which contributed to a softening of the US dollar.

PPI Release

However, components such as airline passenger services, which saw a striking 7.2% month-on-month increase—the largest since early 2022—highlight pockets of price stickiness. This development suggests the potential for a 0.3% rise in the core Personal Consumption Expenditures (PCE) index, a key inflation gauge closely monitored by the Federal Reserve.

The Federal Open Market Committee (FOMC) is navigating a challenging environment as it eases monetary policy amidst stubborn inflation, you can check my blog about FOMC cutting or not this year; Historically, the current average core PCE inflation of 3.0% is the highest at the onset of a rate-cutting cycle since 1989. Unlike previous easing phases, the 10-year US Treasury yield has risen over 100 basis points since the September rate cuts, signalling heightened market apprehension over entrenched inflation risks.

Japan: Rising Probability of a Policy Shift

Japan's monetary policy landscape is poised for a potential shift as signals from key officials, including Governor Ueda and Deputy Governor Himino, indicate the likelihood of a 25-basis-point rate hike. Comments from these leaders have pointed to robust wage growth as a key factor supporting such a move. Market expectations for a hike at the upcoming January 24 Bank of Japan (BoJ) meeting have surged to 75%. If realized, this decision could strengthen the yen further, though significant pre-decision movements are unlikely due to market caution.

The BoJ's readiness to discuss tightening reflects a broader shift in Japan’s policy stance after years of ultra-loose monetary measures. Additional media reports or official guidance in the lead-up to the meeting could further shape market sentiment.

USDJPY 5 minutes

Europe: Fiscal and Political Adjustments in Focus

In Europe, the spotlight is on France, where Prime Minister François Bayrou delivered a critical policy address aimed at breaking political gridlock. His proposals for the 2025 budget, which target a 5.4% GDP deficit reduction rather than the previously proposed 5.0%, have calmed immediate investor concerns. The narrowing of the OAT/Bund spread by 2-3 basis points reflects this easing tension.

Bayrou's announcement to reopen pension reform negotiations represents a strategic shift, seeking to balance fiscal discipline with political stability. While these measures provide short-term relief, scepticism remains about the credibility of medium-term fiscal projections, particularly as economic growth forecasts have been revised downward. Despite these efforts, the euro's performance is unlikely to see sustained impacts from these developments.

United Kingdom: Easing Inflationary Pressures

In the UK, softer-than-expected inflation data provided a reprieve for Chancellor Reeves, who has faced mounting pressure amid rising gilt yields. The services CPI fell to 4.4%—the lowest since March 2022—undershooting both market expectations and the Bank of England's (BoE) projections. This development strengthens the case for a February rate cut, which is now priced with an 85% probability.

Although rate cuts often weigh on currency values, the pound could benefit in the short term as easing inflation alleviates concerns over a potential gilt crisis. Investor sentiment is further supported by the government's commitment to fiscal discipline, as highlighted by Reeves' assurances of spending cuts to meet self-imposed fiscal rules.

The inflation landscape and central bank actions underscore the delicate balancing act faced by policymakers globally. Upcoming events, including the BoJ meeting and further US inflation data, will be critical in shaping market trajectories. The interconnectedness of monetary policies, fiscal adjustments, and geopolitical developments continues to define the complex dynamics of global financial markets.

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Michelle

Commodity

Silver (XAG/USD) attracts some sellers on Friday and for now, seems to have snapped a three-day winning streak to the $31.00 neighborhood, or over a one-month high touched the previous day. The white metal remains depressed through the first half of the European session and currently trades around the $30.60-$30.55 area, down 0.70% for the day.

From a technical perspective, the recent move-up witnessed since the beginning of this month stalls near a confluence hurdle comprising the 100-day Simple Moving Average (SMA) and the top end of a descending channel extending from a multi-year top touched in October. A sustained breakout through the said barrier should pave the way for a further near-term appreciating move for the XAG/USD.

Given that oscillators on the daily chart are holding comfortably in positive territory and are away from being in the overbought zone, the commodity might then accelerate the momentum towards the $31.70 hurdle. The subsequent move-up should allow the XAG/USD to reclaim the $32.00 round-figure mark and climb further towards testing the December monthly swing high, around the $32.30-$32.35 region.

On the flip side, any further decline could be seen as a buying opportunity near the $30.40-$30.35 region, which, in turn, should help limit the downside near the $30.00 psychological mark. A convincing break below the latter might prompt technical selling and drag the XAG/USD towards the $29.55-$29.50 support en route to the $29.00 mark and the $28.75-$28.70 area, or a multi-month low touched in December.

XAG/USD daily chart

Source: FXSTREET

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Warren Takunda

Stocks

Shares were mostly lower in Asia on Friday after China reported that its economy grew at a 5% annual pace last year, hitting the government’s target but slowing from the year before.

U.S. futures edged higher and oil prices also climbed.

Strong exports and policies aimed at spurring more consumer spending and investment helped drive a boom in manufacturing, which jumped nearly 6% from a year earlier, the Chinese government reported.

Share benchmarks in China showed scant reaction, given that the 5% annual growth exactly matched the government’s target for “about 5%” growth in 2024. The economy grew 5.4% year-on-year in the October-December quarter.

Economists are forecasting a further slowing of growth this year and beyond, and President-elect Donald Trump’s threats to raise U.S. tariffs on Chinese goods have added to Beijing’s challenges as it faces a raft of moves by Washington to limit access to advanced technology, such as computer chips used in artificial intelligence.

Hong Kong’s Hang Seng index rose 0.2% to 19,568.38 and the Shanghai Composite index also edged 0.2% higher, to 3,241.82.

In Tokyo, the Nikkei 225 index lost 1% to 38,193.05. Shares in gaming giant Nintendo dropped 4.3% in Tokyo as investors apparently were unimpressed by the company’s newest console, which gamers have been waiting for since rumors of its release first spread years ago. Nintendo said the Switch 2 will be released in April.

In South Korea, the Kospi shed 0.2% to 2,523.55. Australia’s S&P/ASX 200 edged 0.2% lower to 8,310.40.

Taiwan’s Taiex gained 0.5% after computer chip maker Taiwan Semiconductor Manufacturing Corp., or TSMC, reported Thursday that its profit in the last quarter jumped 57%. The world’s biggest semiconductor manufacturer — which has found itself in the middle of a trade and technology rift between the U.S. and China — said it results were propelled by the artificial intelligence boom.

TSMC U.S.-traded shares rose 3.9% on Thursday. Early Friday, its Taiwan-traded shares were up 1.4%.

The Sensex in India declined 0.5%.

In other dealings early Friday, U.S. benchmark crude oil rose 29 cents to $78.14 per barrel. Brent crude, the international standard, was up 16 cents at $81.46 per barrel.

The U.S. dollar rose to 155.59 Japanese yen from 155.16 yen late Thursday. The euro fell to $1.0280 from $1.0301.

On Thursday, U.S. stock indexes drifted lower Thursday following a mixed set of earnings reports from Morgan Stanley, UnitedHealth Group and other big companies.

The S&P 500 slipped 0.2% to 5,937.34. Gainers outnumbered losers, but drops for some influential stocks like Tesla outweighed advances. Tesla fell 3.4% on news it is offering discounts on its Cybertruck, the latest sign that Elon Musk’s company is struggling to attract buyers as sales of its electric vehicle models drop for the first time in a dozen years.

The Dow Jones Industrial Average dropped 0.2% to 43,153.13, and the Nasdaq composite fell 0.9% to 19,338.29.

The relatively modest moves for stocks came a day after they shot higher on hopes that an encouraging report on inflation may convince the Federal Reserve to deliver more cuts to interest rates this year. Treasury yields were also more placid in the bond market following mixed economic reports on Thursday.

One report showed growth for sales at U.S. retailers wasn’t as strong last month as economists expected. Another said more U.S. workers filed for unemployment benefits last week, and a third said manufacturing in the mid-Atlantic area unexpectedly roared back to growth.

Taken together, the trio of reports suggests the U.S. economy is nowhere near a recession but may be showing some signs of slowing that could keep pressure off inflation. Markets have been lurching down and up in recent weeks as economic reports force traders to revamp their expectations about what the Federal Reserve may do with interest rates in 2025.

UnitedHealth Group tumbled 6%. The insurer reported a stronger profit than expected, but its revenue for the latest quarter came up shy of forecasts. It was the company’s first financial report since the shooting of one of its executives outside a New York City hotel early last month.

Source: AP

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Trump Set to Designate Cryptocurrency as National Priority

Source: Theedgemarkets

Oil Climbs, Set for Fourth Week of Gains as US Sanctions Hit Supply

Source: Reuters

London Midday: Stocks Extend Gains Amid Rate Cut Hopes

Source: Sharecast

FOMC Will Still Cut in 2025, Slowly But Surely

Inflation: Progress with Persistent Challenges

Labor Market Resilience

Economic Growth and External Influences

Policy Outlook: Data-Driven Flexibility

The bottom of the line is that

Rate Hike at Upcoming BoJ Meeting

Currency Strength

United States: Easing Inflation but Lingering Concerns

PPI Release

Japan: Rising Probability of a Policy Shift

USDJPY 5 minutes

Europe: Fiscal and Political Adjustments in Focus

United Kingdom: Easing Inflationary Pressures

Silver Price Forecast: XAG/USD Retreats from One-Month Top, $31.00 Confluence Hurdle

Source: FXSTREET

Stock Market Today: Asian Shares Are Mixed After China’s Economy Hit Its 5% Growth Target in ’24

Source: AP

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