Investing.com - Here are the top five things you need to know in financial markets on Thursday, January 11:
1. Talk of South Korea Ban Rattles Cryptocurrency Market
Major cryptocurrencies including Bitcoin, Ethereum and Ripple came under intense selling pressure following reports that South Korea could be preparing to ban all cryptocurrency trading.
At 5:10AM ET (1010GMT), Bitcoin was down nearly 2% at $13,559, having tapped an overnight low of $12,845.71. Ethereum slid 6% to $1,201.10, while Ripple stumbled 12% to $1.7380.
The crypto market was rattled by reports saying that South Korea’s Justice Ministry is "basically preparing a bill to ban cryptocurrency trading through exchanges" and that the country's largest cryptocurrency exchanges were raided by police and tax agencies this week for alleged tax evasion.
Prices briefly pared losses as headlines crossed the wires from the South Korean Presidential office stating that the banning of the cryptocurrency market in the country is not a measure that is finalized as of yet.
2. China Bond Purchases in The Spotlight
A report that China is considering slowing or halting purchases of U.S. Treasury bonds may be based on erroneous information and could be "fake", the country's foreign exchange regulator said on Thursday.
Bloomberg News reported on Wednesday that Chinese officials reviewing the country's vast foreign exchange holdings had recommended slowing or halting purchases of U.S. Treasury bonds amid a less attractive market for them and rising U.S.-China trade tensions.
The news prompted investors to buy back dollars and bonds. Against a basket of six major currencies, the dollar inched up 0.2% to 92.28, having fallen as low as 91.66 on Wednesday, while the U.S. 10-year Treasury yield edged down to 2.535% from Wednesday's ten-month high of 2.597%.
3. Global Stocks Steady as U.S. Treasury Sell-Off Eases
Global stock markets steadied, as investors sought to put Wednesday’s selloff behind them amid easing concerns that China may reduce its buying of U.S. government bonds.
Most Asian-Pacific markets closed slightly lower, following the softer lead from Wall Street overnight.
In Europe, the majority of the continent's bourses were mixed in mid-morning trade, as investors monitored the release of corporate earnings.
On Wall Street, U.S. stock futures pointed to a slightly higher open. The S&P 500 and Nasdaq snapped a six-day winning streak on Wednesday, as investors fretted over the possibility of China halting its Treasury bond purchases.
4. Shrinking U.S. Crude Supplies Keep Oil At 3-Year Highs
Crude prices held near three-year highs, drawing support from a report showing U.S. crude stockpiles declined for an eighth straight week.
U.S. WTI crude futures traded at $63.83 per barrel, their highest level since Dec. 2014. Meanwhile, Brent futures were at $69.37 per barrel, its best level since May 2015.
U.S. crude oil inventories fell by 4.9 million barrels last week to 419.5 million barrels, according to the U.S. Energy Information Administration. That's slightly below the five-year average of just over 420 million barrels.
The report also showed that U.S. crude oil production fell by 290,000 barrels per day (bpd) to 9.49 million bpd.
5. Looking Ahead: U.S. PPI Data, Fed's Dudley Speaks
Looking ahead, today's calendar features top-tier U.S. data on inflation. The Commerce Department will publish producer price inflation figures for December at 8:30AM ET (1330GMT).
Analysts expect wholesale prices to rise 0.2% last month, underlining the view that price pressures in the production pipeline are firming up gradually.
On the Fed front, outgoing New York Federal Reserve Bank President Bill Dudley is scheduled to speak about the economic outlook at the Securities Industry and Financial Markets Association, in New York at 3:30PM ET (2030GMT).