Bitcoin hits new highs, markets stall amid US inflation increase
Global equities stalled Wednesday while bitcoin hit a fresh high as traders digested a small rise in inflation and mulled what Donald Trump's presidency might mean for global trade and the adoption of cryptocurrency.
US stocks were little changed on Wednesday, as traders digested data pointing to a small increase in the Consumer Price Index (CPI) measure of inflation last month.
"The drivers in large part are the fact that the CPI came in very much in line with expectations, and some buzz in the markets yesterday," B. Riley Wealth Management chief market strategist Art Hogan told AFP.
"So that coming in line was very much a positive," he added.
Despite inflation matching expectations, there are lingering concerns that Trump's stated plans for sweeping tariffs could prove to be inflationary, forcing the US Federal Reserve to cut interest rates by less than they otherwise would.
"If prices are already looking unruly, expectations will rise for Trump's threats to be watered down," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
For Srijan Katyal, global head of strategy and trading services at ADSS brokerage, "this (inflation data) reading has slightly disrupted the disinflationary pattern we have seen in the last few months but continues to remain stable around the targeted level."
Yet, given Trump's election victory, "inflation worries could return to markets," he said.
- Bitcoin hits fresh record -
As inflation edged up, bitcoin, the world's best-known cryptocurrency, soared to an all-time peak above $93,400 before easing back slightly.
Trump has notably pledged to ease regulation around digital tokens.
With main European indices hardly budging -- Frankfurt and Paris lost a bit of ground and London closed barely ahead -- FOREX.com analyst Fawad Razaqzada suggested that "this week's US inflation data may impact Wall Street but will likely have limited implications for European indices."
But, he added, "one factor that is certainly weighing on sentiment on this side of the pond is political uncertainty in Germany," which faces elections in February.
Asian markets had mostly ended lower as Trump named known China hawks to key cabinet positions, fuelling concerns about another debilitating trade war between the economic superpowers.
- Key figures around 2130 GMT -
New York - Dow: UP 0.1 percent at 43,958.19 points (close)
New York - S&P 500: UP less than 0.1 percent at 5,985.38 (close)
New York - Nasdaq Composite: DOWN 0.3 percent at 19,230.74 (close)
London - FTSE 100: UP 0.1 percent at 8,030.33 (close)
Paris - CAC 40: DOWN 0.1 percent at 7,216.83 (close)
Frankfurt - DAX: DOWN 0.2 percent at 19,003.11 (close)
Tokyo - Nikkei 225: DOWN 1.7 percent at 38,721.66 (close)
Hong Kong - Hang Seng Index: DOWN 0.1 percent at 19,823.45 (close)
Shanghai - Composite: UP 0.5 percent at 3,439.28 (close)
Dollar/yen: UP at 155.51 yen from 154.59 yen on Tuesday
Euro/dollar: DOWN at $1.0564 from $1.0625
Pound/dollar: DOWN at $1.2710 from $1.2748
Euro/pound: DOWN at 83.11 pence from 83.34 pence
Brent North Sea Crude: UP 0.5 percent at $72.28 per barrel
West Texas Intermediate: UP 0.5 percent at $68.43 per barrel
(L.Svenson--DTZ)
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