Bitcoin Hits $100K Amid Political Turmoil and Rate Optimism

Bitcoin surged past the $100,000 milestone, propelled by institutional investments and new Bitcoin ETFs, following Donald Trump's election on a crypto-friendly platform. Wall Street indexes hit record highs as confidence in US rate cuts grew, while German stocks defied European political instability, including a historic no-confidence vote in France and impeachment efforts in South Korea.

Equities

The FTSE 100 fell by 0.3%, ending a five-day rally, as AstraZeneca’s 2.8% drop weighed on the index. The pharmaceutical company’s share price declined after HSBC reduced its target price to 13,720p and following the announcement of Iskra Reic as its new International Executive Vice President.

Copper miners Glencore and Anglo American saw their shares fall 1% and 2.5%, respectively, as the dollar strengthened and copper prices weakened. In contrast, Legal & General climbed 6% after revealing plans to return capital to shareholders and reiterating confidence in its financial targets. The FTSE 250 gained 0.5%, with ZIGUP falling 12.9% following a 17.2% drop in pretax profits.

In the United States, Wall Street saw record highs across major indices. The S&P 500 rose 0.6% to 6,086, while the Nasdaq gained 1.3% to 19,735. The Dow Jones was up 0.7% to 45,014. Technology stocks drove the rally, with Salesforce rising on strong third-quarter results, reflecting robust demand for its enterprise cloud services.

Marvell Technology saw a similar boost after posting earnings above expectations. UnitedHealth shares edged up nearly 1%, despite the shocking news of the fatal shooting of its insurance division CEO, Brian Thompson, in New York City.

Global events added to market movements, with France and South Korea experiencing political turmoil. However, the dollar and euro remained stable, reflecting resilient investor sentiment. US Treasury yields fell as Federal Reserve Chair Jerome Powell indicated a cautious approach to interest rate adjustments.

Cryptocurrencies rallied, with Bitcoin rising 3% to $98,892 and Ethereum jumping 7.4%, following news that US President-elect Donald Trump plans to nominate Paul Atkins, a crypto-friendly figure, to head the SEC.

Forex & Commodities

The euro edged higher by 0.18% to $1.0528, staying near the two-year low of $1.0332 hit in November. Political instability in France following a no-confidence vote against the government continued to weigh on sentiment. European Central Bank President Christine Lagarde noted downside risks to growth and hinted at potential rate cuts, with markets pricing in 157 basis points of easing by the end of 2025. Sterling remained steady at $1.2714 amid muted market activity.

The US dollar index held firm at 106.18 after Federal Reserve Chair Jerome Powell signalled a cautious approach to future rate cuts. Markets anticipate a 74% chance of a 25-basis-point rate cut in December, supported by softer economic data, including a slowing services sector and a modest rise in job openings.

Gold prices were subdued, with spot gold down 0.1% at $2,648.02 per ounce as investors awaited Friday’s non-farm payrolls data for further direction on the Federal Reserve's monetary policy. US gold futures mirrored the decline, settling at $2,672.90.

Oil prices remained stable ahead of an OPEC+ meeting, with Brent crude at $72.36 per barrel and US crude at $68.60. Both benchmarks had dropped nearly 2% the previous day due to a significant sale of US oil futures contracts. Investors are watching for an expected extension of output cuts by OPEC+ as the group seeks to stabilise prices in a challenging supply environment.