Reuters
Mon Dec 11 2017
Futures in bitcoin, which has taken global financial markets by storm, got off to a volatile start at its launch. - FILEpic
Futures in bitcoin, which has taken global financial markets by storm, got off to a volatile start at its launch, while the dollar kept gains in Monday's Asian session on expectations the Federal Reserve will stick to its tightening path.
The most-traded contract on the Chicago-based CBOE Global Markets exchange opened at $15,460, then leapt to a high of $16,660 and was last quoted at $16,050, a more than $1,000 premium to the price on the Luxembourg-based Bitstamp.
The cryptocurrency has skyrocketed to a record high this year, making a gravity-defying 15-fold gain since the start of the year and attracting institutional interest. The surge has also led to fears of a bubble.
Some market participants believe the fallout across other financial assets from a potential bursting of the bubble will be limited.
"Bitcoin's market capitalization is currently around $240 billion, which is much smaller, say, than the value of gold outstanding," said Andrew Kenningham, economist at Capital Economics.
"If the price of bitcoin fell to zero today, the paper losses would be equivalent to a 0.6 percent fall in U.S. equity prices. As most investors have bought bitcoin at much lower prices, the relevant losses would arguably be smaller."
In Asian equity markets, trading was subdued. MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> stayed above a recent two-month trough of 542.27 points amid optimism about global growth after the strong U.S payrolls data on Friday.
Japan's Nikkei <.N225> climbed 0.1 percent while Australian shares <.AXJO> were unchanged.
Currency market investors were cautious ahead of a big week for policy meetings globally, with the Federal Reserve the only major central bank expected to raise interest rates. The Bank of England and the European Central Bank are likely to hold rates steady.
The dollar rose to near one-month top against the yen , having risen 1.2 percent last week. The dollar index, which measures the greenback against a basket of currencies, was steady near a three-week high. <.DXY>
RATE RISES?
Traders will keep their eyes peeled for the Fed's future rate projections as U.S. wages growth and inflation crawl at a snail's pace.
Data out on Friday showed average hourly earnings in the United States nudged up 5 cents or 0.2 percent in November when economists had looked for a 0.3 percent gain.
The annual increase in wages was also slower than forecast: the November figure came in at 2.5 percent versus a 2.7 percent expectation.
The weakness persisted despite stronger-than-expected non-farm payrolls which rose by 228,000 in November.
"We'll be listening close for any signs of a dovish shift," said Aerin Williams, New York-based forex strategist for Citi about the Dec 12-13 Fed meeting.
"This is not just due to wages but more so following Fed member Evans comments that the recent data may point to a delay in the rate increase."
Chicago Fed President Charles Evans told the New York Times that the case for a December rate hike was not "obvious" as he worried about the slow pace of inflation.
Elsewhere, oil prices slipped with U.S. crude down 28 cents at $57.08 a barrel. Brent crude inched 37 cents lower to $63.03, drifting away from a recent 2-1/2 year peak of $64.65.
Spot gold was barely changed at $1,247.61 an ounce.
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