Weekly Market Update - 19 February 2024

Trade Restrictions

The European Union has proposed new trade restrictions on about two dozen firms — including three based in China — that are accused of supporting Russia’s war efforts in Ukraine. If adopted, this would be the first time the EU has imposed restrictions on companies in mainland China since the invasion. The list also includes companies in Hong Kong, Serbia, India and Turkey. This issue is crucial since the EU counts Beijing as one of its most vital trade partners, particularly Germany for whom China is the biggest market for carmakers including Volkswagen.

Source: Bloomberg

Bitcoin

Sustained appetite for risk assets propelled Bitcoin to $50,000 for the first time in more than two years, tripling its value since the start of 2023, though it remains below its all-time high of almost $69,000. The milestone comes one month after the historic debut of Bitcoin spot funds. The 10 new ETFs have raked in about $2.8 billion in total net inflows, data compiled by Bloomberg Intelligence show. Even so, some are still reeling from the wealth burned by collapsed exchanges, bankrupt lending programs and pump-and-dump altcoins. And hedge funds considering crypto investment strategies must now, confidentially, share more information to US regulators.

Source: Bloomberg

Japan

Kim Yo Jong, the powerful sister of North Korean leader Kim Jong Un, offered a rare olive branch to Japan, saying she saw a positive tone in comments from Prime Minister Fumio Kishida, who is seeking a summit. “If Japan makes a political decision to open up a new way of mending the relations through its courteous behavior and trustworthy action,” she said, “the two countries can open up a new future together.” The tone is a reversal from the comments she issued nearly two years ago when she lumped Japan in a bunch of “sinister” nations. Meanwhile, Japan’s economy unexpectedly slipped into recession after shrinking for a second quarter amid anemic domestic demand. GDP contracted at an annualized pace of 0.4% in the final three months of last year.

Source: Bloomberg