Investing.com - Here are the top five things you need to know in financial markets on Tuesday, January 16:
1. Cryptocurrencies Plunge as Bitcoin Suffers Double-Digit Selloff
The prices of major cryptocurrencies plunged sharply, with Bitcoin, Ethereum and Ripple all suffering severe double-digit percentage losses amid a broad-based selloff.
Declining Japanese and South Korean trading volumes as well as fears over rising scrutiny from global regulators were blamed for spooking the market.
Bitcoin was down around 18% at $11,276. It fell by more than 20% to a six-week low of $10,891 at one point. It is now down more than 40% from the record high in mid-December.
Ethereum, the world’s second largest cryptocurrency by market cap, was down 22% at $1,039, well below a lifetime-high of $1,423.20 reached on Saturday.
Meanwhile, Ripple's XRP token was trading at $1.2527, down around 31% for the day.
2018 has not started well for cryptocurrencies, with last week marking the second week in a row of poor performances.
2. Dow Futures Point to Big Open Ahead of Citigroup Earnings
Wall Street futures traded significantly higher, pointing to another record session when traders return from the long holiday weekend.
The blue-chip Dow futures were up 256 points, or around 1%, to a fresh record of 26,058 ahead of markets stateside re-opening following Martin Luther King Jr. Day.
S&P 500 futures rose 14 points, or around 0.5%, while the tech-heavy Nasdaq 100 futures added 34 points, or roughly 0.5%.
This week marks the first big week of the fourth-quarter earnings season, with Citigroup (NYSE:C) and UnitedHealth (NYSE:UNH) the big names on the docket today.
3. Dollar Licks Its Wounds
The U.S. dollar languished near three-year lows, weighed by rising expectations that central banks in Japan and the euro zone could pare their monetary stimulus sooner than expected.
The dollar index, which gauges the U.S. currency against a basket of six major rivals, was last at 90.40, after dropping as low as 90.05 on Monday, when U.S. markets were closed. That was its deepest nadir since December 2014.
Against the yen, the dollar was at 110.62, after slumping to a four-month low at 110.33 on Monday.
The euro was at 1.2230, not far from a three-year peak of 1.2296 reached a day earlier.
The dollar has weakened broadly recently amid the view that the global economic recovery will outpace U.S. growth and prompt other major central banks, led by the ECB to begin unwinding loose monetary policy at a faster pace than has been expected.
4. Oil Falls From 2014 Highs on Rising U.S. Rig Count
Crude prices edged away from their strongest level since late 2014, as the market weighed rising U.S. drilling activity against ongoing efforts by major producers to cut output to reduce a global glut.
U.S. West Texas Intermediate crude futures dipped 0.1% to $64.28 per barrel, while Brent futures shed 0.7% to $69.75 per barrel.
Both benchmarks reached their best levels since Dec. 2014 in the prior session.
Analysts and traders have recently warned that U.S. shale oil producers could ramp up production in the coming weeks as they look to take advantage of higher prices, potentially derailing an OPEC-led effort to curb excess supply.
5. UK Inflation Posts First Decline in 6 Months
British inflation eased for the first time in six months in December, thanks to the cost of air fares as well as games and toys.
The decline took the rate to 3.0% from 3.1% in November, which was the fastest in more than five years. A core measure of consumer-price growth slipped to a five-month low of 2.5%.
The Office for National Statistics said it's too early to say if the move is the “start of any longer-term reduction in the rate.”
The pound remained slightly lower following the data release, with GBP/USD down 0.2% at 1.3760.