How high can Bitcoin go?

Thoughts of the Day

BTC ATH: ~$69K

last week: 30% away

yesterday: 8% away

today: < 0.5% away

When BTC breaks above $70,000, the media attention could draw even more money to flow into the US BTC ETFs and push it to $100,000.

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Day Ahead

Bank of Japan Governor Ueda is due to speak at the FIN/SUM 2024 (Fintech Summit), in Tokyo.

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What Happened Yesterday

Market Movements as of New York Close 04 Mar 24

Bostic (current voter, known hawk):
“Soft landing is hardly assured given uncertainty. Needs to see more progress and gain confidence on disinflation before voting to reduce policy rates. Expects two quarter-point cuts in 2024.”
(Bostic is keeping to his expectations of 2 rate cuts from his comments since last month.)

The US Treasury Yield curve inversion widened to 0.39% as the US 2-year bond yield rose +0.07% to 4.61% while the 10-year yield edged +0.03% higher to 4.22%.

The US stock futures fell slightly through the Asian and London trading hours with the S&P 500 futures down -0.13% when the New York session began.

The US stock market opened a tad lower from Friday. It then continued to trade sideways through the New York session and experienced a slight whipsaw at the end of the session with a brief spike that was short lived. As a result, the S&P 500 fell -0.12% (high: +0.25%, low: -0.19%), the Dow Jones decreased -0.25% (high: +0.00%, low: -0.45%) while the Nasdaq sank -0.42% (high: +0.06%, low: -0.46%).

Crypto continues to power higher with Bitcoin rising more than 8%, breaking the 68,000 level, and is now whiskers away from all-time highs just below 69k.
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Headlines & Market Impact

Inflation in Japan’s capital re-accelerates in February

Notable Snippet: Core inflation in Japan’s capital re-accelerated in February above the central bank’s target as the effects of government fuel subsidies faded, data showed on Tuesday, a sign conditions for ending negative interest rates were falling into place.

But an index stripping away the effect of energy costs, seen as an indicator of the broader price trend, slowed, shifting the focus on whether Japan can see wage hikes strong enough to underpin consumption.

The data will be among factors the Bank of Japan (BOJ) will scrutinise ahead of its policy-setting meeting on March 18-19 in judging whether to phase out its massive stimulus programme.

Core consumer price index (CPI) in Tokyo, a leading indicator of nationwide figures, rose 2.5% in February from a year earlier, matching market forecasts, data showed on Tuesday.

The rise in the core index, which strips away the effect of volatile fresh food prices, followed a 1.8% rise in January.

A separate index that excludes the effect of both fresh food and fuel costs, rose 3.1% in February from a year earlier, slowing from a 3.3% gain in January. It was the slowest annual pace of increase since February 2023.

“The disinflation isn’t very broad-based as it mostly reflects a slowdown in processed food inflation,” Marcel Thieliant, head of Asia-Pacific at Capital Economics, said on the slowdown in the index excluding fresh food and energy.

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China sets GDP target of ‘around 5%’ for 2024

Notable Snippet:  China set a growth target of “around 5%” for 2024, according to the “Government Work Report” released Tuesday.

The targets for GDP and other economic indicators were published as part of the opening of the National People’s Congress annual meeting.

Last year China’s economy grew by 5.2%, matching the official target of around 5%. The overall rebound from the pandemic was slower than many expected, while growth also faced drags from a slump in real estate and exports.

China plans to target an urban unemployment rate of around 5.5%, the creation of 12 million new urban jobs and a consumer price index increase of around 3%. The 2024 targets were the same as those set for 2023.

In 2023, the National Bureau of Statistics said the country averaged a 5.2% unemployment rate in cities and created 12.44 million jobs. However, the consumer price index rose by 0.2% amid lacklustre demand.

The work report emphasised the need to “ensure both high-quality development and greater security,” preventing risks and maintaining social stability, among other tasks.

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China drops ‘peaceful reunification’ reference to Taiwan; raises defence spending by 7.2%

Notable Snippet: China will boost defence spending by 7.2% this year, the same rate as last year, but higher than the government economic growth forecast, according to an official work report reviewed by Reuters on Tuesday.

The budget showed 1.67 trillion yuan ($230.60 billion) allocated to military spending.

The defence budget is closely watched by China’s neighbours and the United States, who are wary about Beijing’s strategic intentions and the development of its armed forces as tensions rose sharply in recent years over Taiwan.

In a separate report, China said it would “resolutely oppose separatist activities aimed at ‘Taiwan independence’ and external interference”.

The work report also said China would “be firm in advancing the cause of China reunification”, dropping the mention of “peaceful reunification” in previous reports.

This year’s increase in defence spending marks the ninth consecutive single-digit increase. As in previous years, no breakdown of the spending was given, just the overall amount and the rate of increase.

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Stock Indices

Phan Vee Leung
CIO & Founder, TrackRecord