Markets stall, inflation and bitcoin rise amid Trump fears

1 week ago 1

Awaiting the return of Donald Trump to the White House, Wall Street traders were digesting a big jump in bitcoin and a smaller one in inflation

Global equities stalled Wednesday while bitcoin hit a fresh high as traders fret over the impact of Donald Trump's presidency on the Chinese and global economies amid fears his policies may reignite US inflation, which rose on latest data.

The prospect of higher prices on the back of Trump's planned tax cuts, import tariffs and an easing of regulations gave fresh impetus to the dollar, which has rallied since the Republican's election win last week.

Adding to concerns on the impending transfer of White House power, key US October consumer price data saw a 2.6-percent rise, up from 2.4 percent in September, the Labor Department said.

Although the figure was in line with the median forecast of economists surveyed by Dow Jones Newswires and The Wall Street Journal, the data complicates the US Federal Reserve's plans to cut interest rates, even if it remains broadly on track to slow the rate of price increases, EY chief economist Gregory Daco told AFP.

"It's particularly pertinent given concerns that Trump's tariff policies will be inflationary," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

"If prices are already looking unruly, expectations will rise for Trump's threats to be watered down."

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," Katyal said.

As inflation edged up, bitcoin, the world's premier cryptocurrency, soared to fresh heights in topping $90,000, hitting 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 minor 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 one factor that is certainly weighing on sentiment on this side of the pond is political uncertainty in Germany," which faces elections in February.

On Wall Street, the Dow stood 0.4 percent in the green two hours into the session as traders digested the inflation data but the tech heavy Nasdaq was flat.

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.