Published : 4 days ago, on 05/12/2024

By Dhara Ranasinghe and Tom Westbrook

LONDON (Reuters) -Bitcoin broke $100,000 on Thursday as investors bet on a friendly U.S. regulatory shift, while world stocks touched fresh record highs with sentiment bolstered by upbeat comments on the economy from Federal Reserve chief Jerome Powell.

France’s government lost a confidence vote late on Wednesday for the first time since 1962, with the far-right and leftist lawmakers joining forces to topple Michel Barnier’s government, but the move had been widely anticipated by investors, so the euro, French stocks and bonds were largely steady on Thursday.

European stocks opened firmer, while U.S. stock futures were little changed a day after all three major U.S. stock indexes scored record closing highs, helped by the comments from Fed chief Powell.

Powell said the economy was stronger than it had appeared in September when the central bank began cutting interest rates, allowing policymakers to potentially be a little more cautious in reducing rates further.

Japan’s Nikkei stock index closed 0.3% higher, while MSCI’s world stock index touched a fresh record highs.

Francois Savary, Chief Investment Officer at Genvil Wealth Management, said a fall in U.S. Treasury yields in recent weeks, relatively robust U.S. data and Powell’s latest comments were supporting sentiment in equity markets.

“But there is a risk to the euphoria,” he added.

“Everything is going the right way, right now, but wait for January, (U.S. President-elect Donald) Trump will take power and have to implement economic plans and people will realize that this could have some potential inflationary impact.”

BITCOIN IN THE SUN

It was Bitcoin’s day to shine as the cryptocurrency hit the $100,000 mark and was last trading around 5% higher on the day.

Its latest surge came after Trump said he would nominate Paul Atkins to run the Securities and Exchange Commission.

Atkins, a former SEC commissioner, has been involved in crypto policy as co-chair of the Token Alliance, which works to “develop best practices for digital asset issuances and trading platforms”, and the Chamber of Digital Commerce.

“At the end of the day, it’s just a number,” said Geoff Kendrick, global head of digital assets research at Standard Chartered.

But the reality is we’ve been able to get to this level because the industry has become institutionalised this year particularly – and that’s mostly the ETF inflows,” he said, referring to exchange traded funds approved earlier this year.

U.S. rate cut optimism supported sentiment across broader markets.

Over the past week and a half markets have all but priced in an extra U.S. rate cut for 2025 and the implied chance of a cut in December has lifted from even to around 75%.

Earlier this week Fed Governor Christopher Waller had said he was leaning towards a cut later in December.

The closely watched U.S. ISM survey showed services sector activity slowed in November after posting big gains in recent months. Benchmark 10-year Treasury yields edged up after falling the previous day.

The week’s focus is on U.S. employment data on Friday.

The dollar weakened against major currencies and was last down 0.25% at 150.23 yen.

The euro was a touch firmer at $1.0521, while sterling was up 0.1% at $1.2716.

The risk premium investors demand to hold French debt over German Bunds dropped further away from its highest levels in over 12 years on Thursday after the widely expected collapse of the French government.

French stocks rallied to their highest levels in over three weeks.

“A lot of bad news was priced in, it was obvious that we were heading towards the fall of the government,” said Savary Genvil Wealth Management.

Elsewhere, the Australian dollar, at $0.6435, was nursing what was its heaviest fall in a month on Wednesday following weaker-than-expected growth data.

Financial markets in South Korea were broadly steady after President Yoon Suk Yeol’s failed attempt to impose martial law late on Tuesday triggered volatility and a political crisis. [.KS]

Oil inched higher ahead of an OPEC+ meeting later in the day. The Organization of the Petroleum Exporting Countries and its allies in OPEC+ are likely to extend their latest round of oil production cuts, sources told Reuters.

Brent crude futures rose 0.25% to $72.49 a barrel. Gold prices dipped 0.25% to $2,643 an ounce. [GOL/]

(Reporting by Dhara Ranasinghe in London and Tom Westbrook in Singapore, Editing by Gareth Jones)