Bitcoin Surges on US Crypto Reserve Initiative; Euro Gains Amid Europe’s Ukraine Peace Efforts – Live Updates | Business News

The downturn in eurozone manufacturing has moderated last month, marking its least severe phase since early 2023 according to survey results.

The headline purchasing managers’ index from Hamburg Commercial Bank, compiled by S&P Global, rose to 47.6 in February (final reading), up from January’s 46.6. Any reading above 50 indicates a contraction. This indicated that industrial output was nearing stabilization, with declines in new orders—both domestic and international—becoming less severe.

Expectations for manufacturing growth were at their highest since Russia’s invasion of Ukraine three years ago. However, job losses in factories accelerated, with employment contracting at its fastest rate in four and a half years.

Inflation in input costs rose to a six-month peak, but companies faced challenges in passing on these costs to customers as output pricing slightly decreased.

Cyrus de la Rubia, the chief economist at Hamburg Commercial Bank, remarked:

While it’s still early to declare a recovery, the PMI suggests that the manufacturing sector could be regaining traction. The slowdown in new orders is the smallest since May 2022, and production is approaching stabilization. Thus, after nearly three years of recession, there’s potential for slight growth in the coming months. Rapid government formation in Germany, political stability in France, and an agreement with the US regarding significant tariff issues would certainly assist in this process.</p>

February witnessed an acceleration in job cuts; however, it is common for layoffs to persist even after a recession has ended. This doesn’t guarantee that recovery is not imminent.

For the four major eurozone nations, Spain continues to display production growth, though its manufacturing PMI, which had been performing well for the past three years, dropped below the 50 threshold due to dwindling new orders.

Overall, companies are generally optimistic about the future, as indicated by the confidence index being slightly above the long-term average. This sentiment is notable considering the tariff concerns from the US, as firms understand that downturns are often followed by rebounds. Additionally, there are indications that the conflict in Ukraine may conclude this year, along with the expected political stabilization in Germany serving as a positive factor.

Manufacturing PMIs by country: February

• Ireland 51.9, 12-month peak

• Netherlands 50.0, eight-month peak

• Spain 49.7, 13-month low; Italy 47.4, five-month peak

• Austria 46.7, 24-month peak

• Germany 46.5 (flash: 46.1), 25-month peak

• France 45.8 (flash: 45.5), nine-month peak

Neil Wilson, an analyst at TipRanks, commented:

European stocks experienced an upward trajectory at the month’s outset despite tariff concerns, reflecting gained traction in Asia overnight and a recovery on Wall Street observed on Friday, where the US PCE inflation aligned with expectations, somewhat alleviating anxieties regarding the state of the world’s largest economy. A stronger-than-anticipated Chinese PMI has also improved investor morale.

The discussions at the Oval Office cannot be overlooked. Europe is rallying support around Ukraine, and it’s difficult to imagine that defence stocks won’t be enjoying years of demand – Rheinmetall, Saab, Leonardo, Thales, BAE Systems, Rolls-Royce, among others. London’s FTSE 100 closed at a record high on Friday and has continued to rise in early trading on Monday, with an increase of 7% year-to-date. The DAX also climbed as Rheinmetall surged another 15% this morning. There is a sudden influx of funding for defence initiatives.

The UK convened a summit to discuss Ukraine in London over the weekend as Europe attempts to take control of the peace narrative from Donald Trump. French President Emmanuel Macron proposed during the discussions a one-month ceasefire covering air, sea, and energy infrastructure, noting that, “once peace is established, a (troop) deployment can follow.” Pushing back against the US stance, Volodymyr Zelenskyy emphasized, “without a resolution to the war and security guarantees, no one will be capable of managing a ceasefire.”

Wilson added:

Today, inflation data from the eurozone is anticipated, although it’s well-known that the European Central Bank is slated to implement cuts on Thursday anyway, and President Christine Lagarde will likely foreshadow more reductions to come. All this increased spending on defence will necessitate financing, which means lower interest rates will be required.

European stock markets have opened positively, driven by a surge in defence stocks.

Aerospace and defence companies are seeing significant rises in London. BAE Systems is leading the FTSE 100 with an early gain of over 16%, while Rolls-Royce has increased by 6.1%, and Melrose Industries, another aerospace firm, has seen a modest gain of 1.6%.

German defence contractor Rheinmetall has surged by 13.8%. Germany could play a central role in Europe’s burgeoning defence spending following reports from the weekend indicating that the CDU/CSU and SPD, locked in negotiations for the next government, are considering establishing two special funds for defence and infrastructure projects.

The FTSE 100 index is up 40 points at 8850, a 0.46% increase, while Germany’s DAX has ascended by 0.88%, and France’s CAC has risen by 0.69%. On the other hand, the Italian bourse fell slightly by 0.1%.

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Cryptocurrencies experienced a rally in response to a new US strategic reserve announcement, while both the euro and pound gained value amid Europe’s diplomatic efforts concerning Ukraine.

After a summit held in London over the weekend involving 18 leaders, predominantly from Europe, Keir Starmer declared a “coalition of the willing” led by the UK and France aimed at resolving the ongoing conflict in Ukraine resulting from Russia’s invasion three years ago.

The euro rose by 0.4% to $1.0417 as it bounced back from a low of $1.0360 that occurred after a public disagreement between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy in the Oval Office. The pound saw a slight increase of 0.2% to $1.2604.

Bitcoin, along with other digital currencies, surged following reports of its inclusion in a new strategic reserve for cryptocurrencies planned by the US, which will also feature ether and XRP.

Trump identified five digital assets he expects to be part of the reserve: bitcoin, ether, XRP, solana, and cardano.

Bitcoin, the largest cryptocurrency, has jumped 9.2%, surpassing $92,000 this morning, while ether increased by nearly 7%, and XRP surged by almost 25%.

This price rally follows Bitcoin’s largest monthly decline since June 2022, attributed to waning excitement around cryptocurrencies after Trump’s election win, with Bitcoin experiencing a 17.5% drop in February alone.

Asian stock markets have registered gains following positive data from Chinese factories, while investors anxiously await the potential implementation of new US tariffs. Japan’s Nikkei index rose by 1.7%, Hong Kong’s Hang Seng increased by 0.3%, and China’s Shenzhen index climbed by 0.36%. However, exchanges in South Korea, Taiwan, and India recorded losses.

Official surveys indicated that production in China’s factories returned to growth last month, buoyed by elevated new orders and increased purchase volumes.

On Sunday, US Commerce Secretary Howard Lutnick indicated that tariffs targeted at Canada and Mexico would come into effect on Tuesday, but the decision to maintain the proposed 25% rate remains with President Trump. The Canadian dollar and Mexican peso, which initially rose around 0.2%, are now both down by a similar margin.

Additionally, a 10% tariff on Chinese imports is set to commence tomorrow, coinciding with the opening of China’s National People’s Congress on Wednesday, where new stimulus measures and potential counteractions against the US may be unveiled.

The Agenda

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

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

• 3pm GMT: ISM Manufacturing PMI for February