Bitcoin is experiencing a significant rise, nearing $90,000 amid expectations of deregulation following Donald Trump’s electoral win. In contrast, global stock markets are reacting negatively to potential tariff increases, particularly affecting European and Asian indices. The U.S. dollar strengthens due to anticipated tighter monetary policy, while oil prices remain stagnant amid uncertainty over China’s economic stimulus. Bayer’s shares plummet after reporting a substantial quarterly loss, reflecting challenges in its agrochemical sector.
Bitcoin Soars as Stock Markets Face Challenges
On Tuesday, Bitcoin is on an impressive upward trajectory, inching closer to the $90,000 milestone, buoyed by Donald Trump’s electoral success and his plans for deregulation. The cryptocurrency has seen a 1.08% rise from the previous day, reaching $88,935. Notably, prior to the presidential election on November 5, Bitcoin was trading below $70,000. Ipek Ozkardeskaya, an analyst at Swissquote Bank, highlights that “Donald Trump will likely dismiss the skeptics of government institutions and replace them with regulators favorable to cryptocurrencies.”
Global Market Reactions to Tariff Concerns
Conversely, the stock markets are feeling the pressure from potential tariff increases announced by the incoming U.S. president. “European investors are preparing for the impact of a 10% tariff imposed by Trump,” explains Stephen Innes, an analyst at SPI Asset Management. Early trading showed declines across European markets, with Paris down 1.01%, London 0.55%, and Frankfurt 1.03%. Milan also saw a decrease of 0.68%, reflecting the ongoing volatility in European indices following Trump’s victory.
Investor sentiment remains mixed, swinging between optimism about tax cuts and deregulation for businesses and anxiety regarding tariffs on European goods. In Asia, the mood is similarly grim, as Trump has vowed to impose tariffs of up to 60% on Chinese imports, which could further strain the already sluggish Chinese economy. Major Asian markets also reported losses, with Hong Kong down 2.95%, Shanghai 1.39%, and Shenzhen 0.65%. Concerns were exacerbated by Beijing’s recent announcement of a €780 billion increase in local government debt ceilings, which was seen as insufficient to address China’s sluggish consumption and real estate market challenges, according to Charu Chanana, a currency strategist at Saxo Capital Markets.
On the currency front, the dollar continues to strengthen, buoyed by expectations of a tighter monetary policy in response to inflationary pressures from Trump’s plans. The greenback gained 0.23%, reaching 1.0631 dollars per euro. Additionally, U.S. ten-year benchmark bond yields increased to 4.36%, up from 4.30% the previous day.
The trading session appears relatively calm, with minimal indicators to analyze, aside from the upcoming release of the ZEW institute’s investor sentiment barometer for Germany at 12:00 PM GMT. The political landscape in Germany is also shifting, as Chancellor Olaf Scholz’s coalition faced collapse last week, potentially leading to new elections in Europe’s largest economy, which has been grappling with a prolonged industrial crisis.
In this climate, the yield on the German ten-year bond, a key indicator in Europe, reached approximately 2.34% by 8:20 AM GMT, slightly up from the previous day’s 2.32%.
Oil Prices Remain Stagnant
Amidst the uncertainties regarding China’s stimulus plans, which are essential for global oil demand, crude prices are struggling to gain traction. Investors are also anticipating upcoming monthly reports from OPEC and the IEA regarding production levels. As of 8:20 AM GMT, North Sea Brent crude stabilized, rising 0.15% to $71.94, while West Texas Intermediate (WTI) increased by 0.13% to $68.13.
In corporate news, Bayer, the German agrochemical and pharmaceutical giant, saw its shares plummet by 9.99% around 8:20 AM GMT after announcing a staggering net loss of €4.18 billion for the third quarter, primarily due to underperformance in its agrochemical sector. The Leverkusen-based company noted declining agricultural sales and a significant depreciation of €4.09 billion in its agrochemical division, although total sales only rose by 0.6% to €9.97 billion.