Bitcoin jumps on US crypto reserve plan; euro rises on Europe’s Ukraine peace push – business live

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Neil Wilson, analyst at TipRanks, said:

European stocks rallied at the start of the month despite fears over tariffs, tracking gains in Asia overnight and a bounce on Wall Street on Friday as US PCE inflation came in as expected, somewhat easing fears about the state of the world’s largest economy. A strong-than-expected Chinese PMI also warmed investor sentiment.

There was that conversation in the Oval Office. Europe is rallying round Ukraine and it’s hard to see defence stocks not enjoying years of orders – Rheinmetall, Saab, Leonardo, Thales, BAE Systems, Rolls-Royce, etc. London’s FTSE 100 closed at a record on Friday and extended higher early in trading on Monday, now up 7% so far this year. The Dax also rallied as Rheinmetall surged another 15% this morning. There is suddenly a lot of extra cash for defence.

The UK hosted a summit on Ukraine in London over the weekend, as Europe attempts to wrest control of the peace narrative from Donald Trump. The French president, Emmanuel Macron, said France and Britain proposed a one-month ceasefire that would cover air, sea and energy infrastructure “and then, once peace is signed, a (troop) deployment”. Pushing back against the US position, Volodymyr Zelenskyy pointed out that “if you don’t have an end to the war and you don’t have security guarantees, no one is able to control a ceasefire”.

Wilson added:

Today, eurozone inflation data is due, but we all know the European Central Bank is going to cut on Thursday anyway and president Christine Lagarde will signal more to come. All that extra defence spending is going to need to be financed somehow and that will require lower interest rates.

European stocks climb, lifted by defence stocks

European stock markets have opened higher, with defence stocks rallying.

Aerospace and defence companies are among the biggest risers in London. BAE Systems is the top riser on the FTSE 100 index in early trading, up by more than 16%, while Rolls-Royce jumped by 6.1% and Melrose Industries, another aeorospace company, advanced by 1.6%.

German arms maker Rheinmetall climbed by 13.8%. Germany could be at the heart of Europe’s defence splurge after reports over the weekend suggested the two parties that are locked in talks to form the next government, the CDU/CSU and the SPD, are considering setting up two special funds for defence and infrastructure spending.

The FTSE 100 index is 40 points ahead at 8850, a 0.46% gain, while Germany’s Dax has rallied by 0.88% and France’s CAC rose by 0.69%. The Italian borsa edged 0.1% lower.

Introduction: Bitcoin jumps on US crypto reserve plan; euro rises on Europe's Ukraine peace push

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Cryptocurrencies have rallied on plans for a new US strategic reserve, while the euro and sterling rose amid Europe’s peace push for Ukraine.

After a summit of 18 leaders, mostly from Europe, in London over the weekend, Keir Starmer announced a “coalition of the willing” led by the UK and France to help end the fighting in Ukraine, following Russia’s invasion of the country three years ago.

The euro climbed by 0.4% to $1.0417, recovering from Friday’s low of $1.0360 hit after US president Donald Trump and Ukrainian president Volodymyr Zelenskyy clashed publicly at the Oval Office. Sterling rose by 0.2% to $1.2604.

Bitcoin and some of its rivals jumped on news that it would be included in a new US strategic reserve of cryptocurrencies, along with ether and XRP.

Trump named five digital assets on social media that he expects to include in a new reserve, including bitcoin, ether, XRP, solana and cardano.

Bitcoin, the world’s largest crypto asset rose by 9.2% to more than $92,000 this morning while ether advanced by nearly 7% and XRP leapt by more almost 25%.

The rally came after bitcoin recorded its largest monthly loss since June 2022, as the euphoria over cryptocurrencies after Trump’s election win faded, before the president pumped it up again on Sunday. The price of bitcoin, which tends to be volatile, fell by 17.5% in February.

Stock markets in Asia made some gains following upbeat Chinese factory data, while investors are waiting nervously to see if new US tariffs will go ahead. Japan’s Nikkei rallied by 1.7% while Hong Kong’s Hang Seng gained by 0.3% and China’s Shenzhen rose by 0.36%. However, exchanges in South Korea, Taiwan and India were in the red.

Production at China’s factories returned to growth last month, an official survey showed, thanks to higher new orders and purchase volumes.

US commerce secretary Howard Lutnick said on Sunday that tariffs on Canada and Mexico will come into effect on Tuesday, but president Trump will determine whether to stick with the planned 25% level. The Canadian dollar and Mexican peso initially gained about 0.2%, but are now down by the same amount.

A further 10% levy on Chinese imports is also due to kick in tomorrow, as the country’s National People’s Congress opens its third annual session on Wednesday where stimulus measures and potential counter-measures against the US could be announced.

The Agenda

• 9.30am GMT: Bank of England consumer credit and mortgage lending for January

• 10am GMT: Eurozone inflation flash for February (dip to 2.3% from 2.5% expected)

• 3pm GTM: ISM Manufacturing PMI for February