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Bitcoin, S&P 500, Nasdaq surge amid strong manufacturing data and trade hopes

Bitcoin, S&P 500, Nasdaq surge amid strong manufacturing data and trade hopes

This week, major US equity indices posted gains, with the S&P 500 climbing 0.63 per cent, the Nasdaq surging 1.52 per cent, and the Dow Jones Industrial Average edging up 0.21 per cent. The upbeat mood was fuelled by better-than-expected manufacturing data, standout performances from technology companies, and growing hopes that trade tensions, particularly between the US and China, might ease.

However, the markets remain sensitive to macroeconomic developments, with bond yields ticking higher, the US dollar gaining strength, and commodities like gold and Brent crude showing mixed responses to geopolitical shifts. Meanwhile, the cryptocurrency market, led by Bitcoin, is riding this wave of risk-on sentiment, with the digital asset flirting with the US$100,000 milestone.

As investors await the US nonfarm payrolls data for April 2025, the interplay between macroeconomic signals and market dynamics remains a critical focus. Below, I unpack these developments and offer my perspective on what they mean for investors and the broader economic landscape.

The improvement in global risk sentiment this week is a refreshing change after months of volatility driven by trade war fears and policy uncertainty. The better-than-expected manufacturing data, likely from key economies like the US and parts of Europe, suggests that industrial activity is holding up despite earlier concerns about a global slowdown.

Manufacturing is a bellwether for economic health, and this data likely reassured investors that demand remains resilient, even in the face of tariff-related headwinds. The technology sector, a powerhouse of the US economy, further bolstered market confidence with strong earnings reports. Companies in the Nasdaq, which surged by 1.52 per cent, likely benefited from robust revenue growth and optimism about artificial intelligence (AI) and cloud computing.

This tech-driven rally underscores the sector’s role as a market leader, even as valuations remain stretched. However, I believe investors should remain cautious. While tech earnings are a bright spot, the sector’s high price-to-earnings ratios make it vulnerable to sudden shifts in sentiment, especially if inflationary pressures or interest rate hikes resurface.

The bond market, meanwhile, sent mixed signals. The benchmark 10-year Treasury note yield rose three basis points to 4.21 per cent, and the two year note yield climbed seven basis points to 3.69 per cent. These upticks reflect a market grappling with expectations of tighter monetary policy, particularly as the Federal Reserve monitors inflation and labor market data.

Rising yields typically signal confidence in economic growth, but they also increase borrowing costs, which could weigh on equities and other risk assets over time. I view the rise in yields as a natural response to the improving economic outlook, but it’s a double-edged sword.

If yields climb too quickly, they could choke off the equity rally by making fixed-income investments more attractive. For now, the yield curve remains relatively steep, suggesting that recession fears are receding, but investors should keep a close eye on the Fed’s next moves.

The US Dollar Index’s 0.78 per cent jump to 100.25 reflects the greenback’s safe-haven appeal amid lingering uncertainties, as well as the relative strength of the US economy. However, the dollar’s strength is a headwind for US exporters and multinational corporations, which could temper earnings growth in the coming quarters.

Gold, often a beneficiary of dollar weakness, fell 2.3 per cent to a two-week low of US$3,212 per ounce. This decline surprised me, given gold’s recent run to record highs driven by central bank buying and geopolitical uncertainty. The drop may reflect profit-taking or a shift toward riskier assets like equities and cryptocurrencies, as investors bet on a more stable trade environment.

Conversely, Brent crude rebounded 1.75 per cent, buoyed by new US sanctions on Iran, which tightened global oil supply expectations. While this geopolitical move supports oil prices, it also risks reigniting inflationary pressures, a concern I’ll revisit when discussing the upcoming US jobs report.

In Asia, the Bank of Japan’s decision to hold its policy rate steady at 0.5 per cent was widely expected, but its downward revision of growth and inflation forecasts due to tariff uncertainties highlights the global ripple effects of US trade policies. Japan’s economy is heavily export-driven, and any escalation in trade tensions could exacerbate its challenges.

The closure of markets in China and Vietnam for public holidays limited trading activity in the region, but signals that China is open to trade talks with the Trump administration have boosted sentiment globally. From my perspective, these talks are a critical wildcard. While early negotiations could stabilise markets, the history of US-China trade relations suggests that progress is rarely linear. Investors should brace for volatility as details emerge.

The cryptocurrency market, particularly Bitcoin, is a standout performer in this risk-on environment. Bitcoin is trading near US$97,000, just five per cent shy of the US$100,000 milestone, with the total crypto market capitalisation climbing above US$3.13 trillion. The Crypto Fear & Greed Index’s shift to “greed” from “neutral” reflects growing bullishness among traders, a sentiment I share to an extent.

Bitcoin’s resilience amid earlier trade-related uncertainty is notable, and its recent decoupling from stock market movements suggests it’s maturing as an asset class. However, I caution that cryptocurrencies remain highly sensitive to macroeconomic events, particularly interest rates and trade policy. The positive signals from Washington about trade deals have likely contributed to Bitcoin’s rally, as reduced uncertainty encourages investment in riskier assets.

Corporate adoption of Bitcoin continues to drive its narrative as a store of value. Strategy Inc., one of Bitcoin’s largest corporate holders, raised its 2025 price target for the cryptocurrency during its Q1 earnings call, signaling strong confidence in its long-term value. Similarly, MicroStrategy, the largest corporate Bitcoin holder, announced plans to increase its stash despite missing earnings expectations.

This commitment from high-profile companies underscores Bitcoin’s growing acceptance in corporate treasuries, a trend I view as a structural tailwind for the asset. Tokyo-based Metaplanet’s issuance of 3.6 billion yen (US$24.8 million) in bonds to fund additional Bitcoin purchases further illustrates this trend.

Holding over 5,000 BTC, Metaplanet is positioning itself as Asia’s answer to MicroStrategy, leveraging Bitcoin to enhance shareholder value. While I admire the boldness of these strategies, I worry about the risks of such concentrated exposure, especially if Bitcoin’s price faces a sharp correction.

The upcoming US nonfarm payrolls report for April 2025 is the next major catalyst for markets. A strong jobs number could reinforce expectations of a robust US economy, potentially pushing Treasury yields higher and strengthening the dollar further. However, it might also reduce the likelihood of near-term Federal Reserve rate cuts, which could temper enthusiasm for equities and cryptocurrencies.

Conversely, a weaker-than-expected report could reignite hopes for monetary easing, boosting risk assets like Bitcoin and tech stocks. My base case is that the jobs report will show moderate growth, reflecting a labor market that is cooling but not collapsing. This scenario would likely support the current risk-on sentiment without triggering a hawkish Fed response. However, given the Fed’s data-dependent stance, any surprises could lead to sharp market reactions.

Looking ahead, I believe the interplay between trade policy, monetary policy, and corporate earnings will define the market’s trajectory in 2025. The optimism surrounding trade negotiations is encouraging, but the devil is in the details. A meaningful de-escalation of tariffs could unlock significant upside for global equities and commodities, but entrenched geopolitical rivalries make this outcome uncertain.

The Federal Reserve’s path is equally critical. With inflation still above target and the labor market showing resilience, the Fed may adopt a cautious approach to rate cuts, keeping yields elevated and testing the equity market’s valuations. For cryptocurrencies, the combination of institutional adoption and macroeconomic tailwinds is bullish, but volatility is a given in this nascent asset class.

In conclusion, the current market rally reflects a potent mix of economic resilience, corporate strength, and policy optimism. However, investors must navigate a complex landscape of rising yields, dollar strength, and geopolitical risks. While I’m cautiously optimistic about the near-term outlook, I urge vigilance.

The nonfarm payrolls report will provide fresh clues, but the broader story is one of opportunity tempered by uncertainty. For now, the markets are riding a wave of hope, but staying grounded in data and fundamentals will be key to sustaining this momentum.

 

Source: https://e27.co/bitcoin-sp-500-nasdaq-surge-amid-strong-manufacturing-data-and-trade-hopes-20250502/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Global markets steady as PCE data softens, Trump names Bitcoin in strategic reserve

Global markets steady as PCE data softens, Trump names Bitcoin in strategic reserve

The financial world is buzzing with activity, and the interplay between macroeconomic data, geopolitical tensions, and groundbreaking policy moves like Trump’s proposed Crypto Strategic Reserve offers a rich tapestry to explore.

Let’s unpack this step by step, weaving together the facts, the data, and my own perspective on what it all means for investors, policymakers, and the average person trying to make sense of these turbulent times.

The latest US PCE inflation data provides a starting point, and it’s a cautiously optimistic one. In January, both headline and core PCE price indices rose by 0.3 per cent month-over-month, aligning neatly with economists’ expectations. This moderation in price pressures suggests that the Federal Reserve’s tightrope walk of managing inflation without choking economic growth might be paying off.

For context, the PCE, or Personal Consumption Expenditures index, is the Fed’s preferred gauge of inflation, and a 0.3 per cent increase is a far cry from the scorching prints we saw in 2022. It’s not a victory lap yet—annualised figures still hover above the Fed’s 2 per cent target—but it’s enough to steady global risk sentiment. Markets crave predictability, and this benign inflation print delivered just that.

The US Treasury market certainly took notice, posting its biggest monthly gain since July. Short-term yields dipped below 4 per cent, and the 10-year yield slid 5 basis points to 4.2 per cent, the lowest since mid-December. This rally in bonds reflects a growing belief that the Fed might ease up on rate hikes, or even pivot to cuts later in 2025 if the data keeps cooperating.

But don’t pop the champagne just yet. The geopolitical landscape is throwing curveballs that could unravel this fragile calm. Last Friday’s Oval Office meeting between President Donald Trump and Ukrainian President Volodymyr Zelensky was a disaster by all accounts.

What was supposed to be a constructive dialogue on a critical minerals deal—think lithium, cobalt, and other resources vital for batteries and tech—blew up spectacularly. The fallout scrapped the deal and dashed hopes of ceasefire talks in the ongoing Russia-Ukraine conflict. This isn’t just diplomatic theater; it’s a blow to supply chains and energy transition plans. Ukraine’s mineral wealth could have bolstered US efforts to reduce reliance on China, but now that door’s slammed shut.

The implications ripple outward: heightened uncertainty, potential supply shortages, and a reminder that geopolitics can trump economic fundamentals in a heartbeat. Markets shrugged it off for now—MSCI US climbed 1.6 per cent, with Financials up 2.1 per cent and Consumer Discretionary gaining 1.8 per cent—but I’m not convinced this resilience will hold if tensions escalate further.

Switching gears to Trump’s bombshell announcement, the Crypto Strategic Reserve is the wildcard everyone’s talking about. On Sunday, Trump took to Truth Social to declare that Bitcoin, Ethereum, XRP, Solana, and Cardano would form the backbone of a “strategic national digital assets stockpile.”

Prices of these tokens soared—some reports suggest double-digit gains within hours—and the crypto community is ablaze with speculation. This isn’t a spur-of-the-moment tweet; it builds on an executive order Trump signed in January to explore such a reserve. His framing is classic Trump: a middle finger to the Biden administration’s “corrupt attacks” on crypto, paired with a promise to “elevate” the industry.

It’s a bold move, and I’ll admit, it’s got my journalist senses tingling. On one hand, legitimising crypto at this level could turbocharge adoption. Analysts at State Street are already predicting that crypto ETFs will surpass precious metals in North America by year-end, becoming the third-largest ETF asset class. That’s a seismic shift, and a government-backed reserve could accelerate it.

But let’s pump the brakes and dig deeper. What does a “Crypto Strategic Reserve” even mean in practice? Is the US government buying up billions in Bitcoin and altcoins to sit on them like a digital Fort Knox? Trump’s post didn’t specify quantities or timelines, which leaves room for skepticism.

The logistics are daunting—securing wallets, managing volatility, and navigating regulatory minefields. And why these five coins? Bitcoin and Ethereum are no-brainers; they’re the blue-chip cryptos with the deepest liquidity. XRP, Solana, and Cardano, though, raise eyebrows. XRP’s tangled legal history with the SEC, Solana’s past network outages, and Cardano’s slower development pace don’t scream “strategic” to me.

Posts on X suggest a market frenzy—Cardano reportedly jumped 60 per cent, XRP 25per cent, Solana 20 per cent—but I wonder if this is more hype than substance. Trump’s a showman, and this could be a populist play to win over the crypto crowd without a clear endgame. Still, the signal is powerful: the US might be positioning itself as a crypto superpower, daring others to follow suit.

Across the Pacific, China’s stirring the pot too. The official manufacturing and non-manufacturing PMIs for February ticked up, a relief after the Lunar New Year slowdown from January 28 to February 4. Factories are humming again, and services are rebounding. But peek under the hood, and the picture’s murkier—sub-indices like new orders and employment hint at fragility.

All eyes are on the “Two Sessions” kicking off March 4, where Beijing’s expected to unveil fiscal stimulus. Investors are salivating for measures to juice domestic demand and supercharge AI, especially after Xi’s symposium with business leaders two weeks ago. I’m cautiously optimistic here; China’s got the firepower to move markets, but execution’s the rub. Past promises have sometimes fizzled, and with Trump’s tariffs looming—10 per cent on Chinese goods starting March 4, alongside hikes on Mexico and Canada—Beijing’s got a tightrope of its own to walk.

Speaking of tariffs, they’re casting a shadow over energy markets. Brent crude slipped 1.2 per cent, reflecting fears that trade barriers will dampen global demand. It’s a logical worry: higher costs on imports could slow manufacturing and consumer spending, hitting oil consumption.

The US Dollar Index, meanwhile, edged up 0.4 per cent, flexing its safe-haven muscle, while gold dipped 0.7 per cent. That’s a classic risk-off tilt, even as equities hold firm. Asian equity indices opened mostly higher today, but US futures suggest a mixed start. It’s a market caught between hope (inflation cooling, stimulus hopes) and dread (geopolitics, trade wars).

The week ahead is a gauntlet. US payrolls and ISM data will test the economy’s pulse, while Fed Chair Jerome Powell’s keynote could drop hints on rate cuts. A barrage of Fedspeak will keep traders on edge, and the ECB’s policy rate decision across the pond adds another layer. Trump’s State of the Union on March 4—coinciding with the tariff rollout—will be must-watch TV. Will he double down on the crypto reserve or pivot to red-meat nationalism? My gut says he’ll lean into both, keeping markets guessing.

This is a pivotal moment, but it’s laced with uncertainty. The PCE data and Treasury rally signal a soft landing might be in reach, yet geopolitics and tariffs could derail it. Trump’s crypto gambit is audacious—potentially transformative if it’s more than bluster—but I’d wager it’s half-baked until we see details.

China’s stimulus could be a game-changer, but only if it delivers. For investors, it’s a time to stay nimble: ride the crypto wave, hedge against trade shocks, and watch the Fed like hawks. As an observer, I’m thrilled to chronicle this chaos—it’s where the real stories live. But as a global citizen, I can’t shake the feeling we’re one tweet or tantrum away from a very different market wrap.

 

Source: https://e27.co/global-markets-steady-as-pce-data-softens-trump-names-bitcoin-in-strategic-reserve-20250303/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

How upcoming CPI data could influence fed policy and cryptocurrency prices

How upcoming CPI data could influence fed policy and cryptocurrency prices

Key points:

– Federal Reserve’s Caution: The Fed, led by Powell, holds rates steady, awaiting CPI data. Strong labor market and slightly high inflation delay rate cut expectations to mid-year.
– Market Shifts: US Treasuries sold off; 10-year yields hit 4.54%, 2-year at 4.28%. US Dollar Index fell 0.3%, gold steady at US$2,900/oz. Consumer staples up 0.9%, Asian markets down.
– Energy Risks: Brent crude rose 1.5% after US inventory increase, but sanctions on Russian oil exports add geopolitical uncertainty.
– Crypto Challenges: Bitcoin at US$97,053.0, down slightly due to tariffs, CPI wait. High US rates pressure crypto; World Liberty Financial’s token reserve aims to stabilize.
– Investment Outlook: Fed caution, trade disputes boost gold, consumer staples. Cryptocurrencies resilient, CPI data key for future strategies.

I watched closely monitoring the global economic landscape and the recent developments, particularly the Federal Reserve’s cautious approach to monetary policy, which provided a compelling narrative regarding the nuanced relationship between central bank decisions, investor sentiment, and the burgeoning sector of digital currencies.

On February 12, 2025, the atmosphere surrounding global risk was notably cautious, a direct consequence of Federal Reserve Chair Jerome Powell’s recent comments suggesting a period of patience before further interest rate reductions would be considered. This stance has set the stage for investors now eagerly awaiting the release of the upcoming Consumer Price Index (CPI) data, which could offer critical insights into inflation trends, potentially influencing the Fed’s next steps in monetary policy.

The Federal Reserve’s choice to maintain current interest rates is a calculated move, aiming to observe more concrete advancements in reducing inflation before taking action. This decision is set against a backdrop where the labor market remains strong, and inflation, while trending downward, still slightly exceeds the Fed’s target.

It’s understandable, therefore, that market participants have adjusted their forecasts, now anticipating a potential rate cut, perhaps not until mid-year. This shift in expectation was reflected in market movements on Tuesday, where US Treasuries saw a sell-off across various maturities, with the yield on the 10-year Treasury note increasing by 3.9 basis points to 4.54 per cent and the two year note by 0.9 basis points to 4.28 per cent. These yield changes indicate that while money markets still anticipate one rate cut by the Fed this year, the timing has become less certain.

The US Dollar Index experienced a modest decrease of 0.3 per cent, signalling a consolidation phase as the market absorbs the implications of the Fed’s policy direction. Traditionally viewed as a refuge during times of uncertainty, gold held steady near US$2,900 per ounce, demonstrating its resilience despite the Fed’s indication of no immediate rate adjustments.

In the energy market, Brent crude oil prices found stability, rising by 1.5 per cent after reports highlighted a significant increase in US crude inventories. However, this stability was somewhat tempered by US sanctions impacting Russian oil exports, introducing an element of geopolitical risk into the equation.

In the equity markets, the MSCI US index concluded the day unchanged, with the consumer staples sector leading the pack with a 0.9 per cent gain, suggesting a move towards sectors considered less volatile in uncertain economic times. Conversely, Asian stock markets started the day on a lower note, indicative of broader global economic concerns, while US equity futures suggested a flat opening, reflecting an indecisive market sentiment.

Shifting the focus to the cryptocurrency sector, Bitcoin, the leading digital currency, saw a slight decrease, trading at US$97,053.0 by mid-morning. This minor decline continues a trend of subdued performance, influenced by the ongoing trade tensions sparked by tariffs from President Donald Trump and the anticipation of the forthcoming inflation data.

Since last week, when concerns about a global trade war escalated due to China’s retaliatory tariffs and Trump’s subsequent tariffs on steel and aluminium, Bitcoin has been confined to tight trading ranges, signalling investor hesitance. The market’s attention is now fixed on the imminent CPI data release, which could provide clarity on the Federal Reserve’s future rate decisions, particularly after its hawkish posture in December.

This cautious environment has somewhat offset the previous optimism that had propelled Bitcoin to a peak above US$108,000, driven by hopes of a more crypto-friendly regulatory environment under Trump.

A recent article by Reuters indicated that the Federal Reserve might postpone additional rate cuts until the following quarter, driven by concerns over inflation potentially rising due to recent trade policies. Economists, who had previously forecasted a rate cut in March, have revised their predictions, suggesting the Fed might adopt a more conservative approach in response to inflation risks.

Elevated US interest rates can have a dampening effect on cryptocurrencies by diminishing the allure of riskier investments, increasing the cost of holding non-interest-bearing assets like Bitcoin, and bolstering the US dollar, which typically exerts pressure on crypto valuations.

In an interesting development, World Liberty Financial (WLF), a new platform in the cryptocurrency space with a financial interest from President Donald Trump, announced the launch of a strategic token reserve. This initiative is designed to support Bitcoin, Ethereum, and other cryptocurrencies, positioning them as pivotal in the transformation of global finance.

WLF’s statement on X highlighted that this reserve would help in mitigating market fluctuations, enable investments in cutting-edge decentralised finance projects, and establish a robust financial reserve. Furthermore, WLF plans to forge strategic alliances with financial institutions to enhance its reserve with tokenised assets.

From my perspective, this cautious economic climate presents a complex scenario for investors. The Federal Reserve’s deliberate approach, combined with uncertainties arising from international trade policies, creates an environment where traditional safe-haven assets like gold and sectors like consumer staples gain traction.

However, initiatives like WLF’s strategic token reserve could signify a maturation in the cryptocurrency market, offering stability against volatility and encouraging innovation in decentralised finance, potentially offsetting some negative impacts of higher interest rates on digital currencies.

Moreover, the ongoing trade disputes highlight the necessity for alternative financial systems, which cryptocurrencies are well-poised to fulfil. Despite its recent subdued performance, Bitcoin’s resilience in facing macroeconomic pressures is noteworthy. It continues to act as a hedge against inflation and currency devaluation, especially in a global economy where traditional financial policies might struggle under geopolitical strains.

In summary, as we approach the release of the CPI data on February 12, 2025, the financial markets are in a state of watchful anticipation, balancing between conventional economic indicators and the potential of digital currencies.

The Fed’s cautious stance, alongside geopolitical manoeuvres, crafts an investment landscape that demands vigilance, flexibility, and an openness to the evolving story of global finance, where cryptocurrencies might increasingly play a significant role. This intricate relationship between policy decisions, market sentiment, and technological innovation continues to redefine investment strategies, presenting both challenges and opportunities.

 

Source: https://e27.co/how-upcoming-cpi-data-could-influence-fed-policy-and-cryptocurrency-prices-20250212/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j