Bitcoin Plunges 30% In A Week: 5 Things The Global Markets Are Talking About Today

Global equities remain on the back foot, with Asian and European bourses tracking North American equities lower overnight amid investor fears over global trade and FAANG stocks.

The U.S. dollar was little changed in Euro trading, Euro bonds are a tad lower, while U.S 10-year notes trade atop of +3.06% ahead of a holiday shortened U.S Thanksgiving week.

Elsewhere, sterling trades relatively stable in a tight range as Prime Minister Theresa May reaches out to the business community to help her deliver a Brexit deal. Also, there is mounting evidence that a plot to try and oust her from power is waning. Nevertheless, uncertainty is likely to loom for the foreseeable future, given that no date has been set for the U.K. Parliament to vote on the Brexit deal and PM could still face a no-confidence vote.

Bitcoin is trading well below the psychological $5,000 (around $4,500) for the first time in 13-months, crude trading around $57 a barrel.

With all this in mind, here are five things the global markets were talking about on Tuesday.

1. Global Equity Markets See Red

U.S equities came under heavy selling on Monday, as investors dumped internet and other tech stocks. The theme remained the same in overnight trading.

In Japan, the Nikkei fell to a three-week low as a drop in NASDAQ dragged down Japanese tech names, and while Nissan plummeted on news of Chairman Carlos Ghosn's arrest and dismissal. Also, gains in the yen and bond prices have pressured equities. The Nikkei share average ended 1.1 percent lower, while the broader Topix shed 0.7 percent.

Australia's ASX 200 dropped 0.38 percent, though managed to pare majority of the losses as financials and miners notched surprise gains late in the day. In South Korea, the Kospi was 0.8 percent lower, with Samsung and Hynix down 2-3 percent after the tech-led slide stateside.

In China, stocks dropped the most in three-weeks overnight, led by financial and tech shares. The blue-chip CSI300 index fell 2.3 percent, while the Shanghai Composite Index lost 2.1 percent. In Hong Kong, stocks gave up 2 percent to log their biggest one-day loss in more than a week.

2. Oil Prices Slip Despite Expected OPEC Cuts

Understanding the oil market has become a tad more difficult due to rising geopolitical uncertainties and U.S. foreign policies concerning OPEC and other top producers. Oil priced have again come under pressure despite expectations that OPEC will introduce new output curbs.

Brent crude oil futures were at $66.37 a barrel, down 0.6 percent from Monday's close, while U.S. West Texas Intermediate (WTI) crude futures were at $56.94 per barrel, 0.5 percent below their last settlement.

Market consensus sees oil-demand growth over the next couple of quarters will help balance rising supplies, but demand could structurally slow further into 2019-2020.

In this scenario, OPEC and company will be required to act decisively and quickly with a combined supply cut if they want to avoid a much deeper pull back in oil prices.

The North American crude bears continue to see further price downside risks from the growth in U.S shale production as well as the deteriorating economic outlook.

Concerned about an emerging production overhang, OPEC is expected to push for cuts at its December 6 meeting. Expectations for a supply cut are in the region of 1-1.4 million bpd.

3. Italian Government Bond Yields Soar

Italian BTP yields jumped to a monthly highs earlier this morning, pushed higher on risk aversion triggered by sharp tech equity losses, tensions over Brexit and concerns about the Italian budget.

Italian BTP yields backed up as much as 13 bps, with 5-year yields rising to 2.97 percent, and those on 10-year bonds reaching a montly high of 3.70 percent.

Germany's 10-year Bund yield, meanwhile, hit a 3-week low at 0.347 percent.

With little sign of any easing in the Italian government's budget dispute with the EU Commission and with the vulnerability of the Italian bond market likely to remain very high has widened the BTP/Bund spread. The 10-year Italy/Germany bond spread has widened by over 10 bps to 333 bps for a 1-month high.

Note: The market is waiting for the EU Commission's expected response to the Italian budget draft on Wednesday.

4. Bitcoin Loses 30% In A Week

Bitcoin (BTC) has fallen 18 percent in the last day. Since the market began to drop last Wednesday, it's down 30 percent. In the context of the cryptocurrency's all-time high of $19,783.06 in mid-December of last year, the cryptocurrency is down 75 percent from its high print. A new version of Bitcoin cash was introduced last week (Bitcoin ABC) and this has provided some of the immediate weakness.

5. Carney Says Bank Of England Is A Sideshow In "No Deal" Brexit

Bank of England Governor Mark Carney and several MPC members testified on Tuesday on U.K. inflation and the economic outlook before Parliament's Treasury Committee.

Carney has noted that if the U.K. crashes out of the EU without a deal on its future relationship with the bloc the central bank's response will be "a sideshow."

In testimony to lawmakers, Carney says whether the BoE cuts or raises interest rates are of less importance that what such an outcome would mean for the economy.

"This is not the financial crisis round two, where the Bank of England and other central banks were center-stage," he says. "This is a real economy shock and therefore central banks have a role but we're more of a sideshow."

36 Stocks Moving In Tuesday's Mid-Day Session

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