Bitcoin climbed on Monday, tracking a broad rebound in risk assets after the United States and China announced a framework for a trade deal aimed at preventing further escalation in their ongoing trade dispute.

Risk sentiment received an additional boost from weaker-than-expected US inflation data, which reinforced expectations that the Federal Reserve will move to cut interest rates during its upcoming policy meeting later this week.

Bitcoin jumped 3.5% to $115,504 at 01:22 a.m. Eastern Time (05:22 GMT), breaking out of the $100,000–$110,000 range that dominated most of October.

US–China trade optimism supports crypto markets

US and Chinese officials said over the weekend that they had reached a framework agreement to be expanded upon when President Donald Trump meets Chinese President Xi Jinping later this week.

The agreement covers key contentious issues such as China’s recent restrictions on rare earth exports, elevated US tariffs, and higher shipping fees between the two countries. The Trump–Xi meeting is scheduled to take place in South Korea this week.

News of progress in trade talks between the world’s two largest economies helped lift risk appetite across markets, easing bets on any immediate escalation in the trade conflict.

While cryptocurrencies are not directly impacted by trade disputes, global sentiment shifts often drive volatility in digital asset markets. Trade tensions between Washington and Beijing had kept crypto prices subdued through most of October.

Broader crypto rally and Fed rate-cut expectations

The wider crypto market also advanced Monday, extending gains that began over the weekend.

Ether — the world’s second-largest cryptocurrency — surged 7.5% to $4,240.35, while BNB rose 2.8% to $1,151.90. Solana, Cardano, and XRP gained between 1.5% and 6%.

Among memecoins, Dogecoin climbed 6.3%, and the $TRUMP token added 4.2%.

The rally followed US inflation data for September that came in slightly below expectations, strengthening investor confidence that the Federal Reserve will cut rates this week and adopt a more dovish tone on future easing.

The Fed is widely expected to reduce rates by 25 basis points at its upcoming meeting, following a similar cut in September. According to the CME FedWatch tool, markets are pricing in nearly a 100% probability of such a move.

Rate cuts boost crypto appeal

Lower interest rates are generally seen as supportive for cryptocurrencies, as they free up liquidity to flow into speculative assets. The low-rate environment was one of the key drivers behind the historic crypto bull run of 2021.

Beyond monetary policy, investors this week are also watching earnings reports from major US tech firms, which could influence overall market sentiment.

Crypto prices often move in tandem with US tech stocks, though they lagged behind them for much of October.

Oil prices fell on Monday as investors questioned whether the newly proposed trade framework between the United States and China would immediately boost demand, while remarks from Iraq’s oil minister confirming that a fire at one of the country’s oil fields had not affected exports also weighed on sentiment.

Brent crude futures declined by 32 cents, or about 0.5%, to $65.62 a barrel by 10:15 GMT. US West Texas Intermediate (WTI) crude slipped 30 cents, or roughly 0.5%, to $61.20 per barrel.

US Treasury Secretary Scott Bessent said Sunday that US and Chinese officials had reached a “substantial framework” for a trade deal that could avert 100% tariffs on Chinese goods and delay Beijing’s restrictions on rare earth exports. The two sides are set to continue trade talks later this week.

The announcement lifted global equities on Monday, while traditional safe havens such as gold, bonds — and oil — retreated.

Demand concerns weigh on oil markets

“Oil traders are more skeptical about trade agreements than their counterparts in the equity market,” said John Evans, analyst at PVM Oil Associates. “Positive headlines around negotiations don’t necessarily translate into an immediate boost in demand.”

Concerns about weak global demand have weighed on oil prices in recent weeks, with Brent earlier this month touching its lowest level since May. However, US sanctions on Russia and stronger-than-expected American consumption have provided partial support.

Chris Beauchamp, chief market analyst at IG Bank, noted: “Optimists in the market are hoping that US oil consumption continues to recover — otherwise, the modest pullback we’re seeing today could deepen in the coming days.”

Iraq negotiating its OPEC production quota

Meanwhile, Iraqi Oil Minister Hayan Abdul-Ghani said Monday that Iraq — the largest OPEC member exceeding its production quota — is negotiating its share within its total output capacity of 5.5 million barrels per day.

OPEC and its allies shifted strategy earlier this year by rolling back previous output cuts in an effort to reclaim market share, a move that has partly curbed further price gains.

The Iraqi minister also confirmed that Sunday’s fire at the Zubair oil field had not affected the country’s crude exports.

Impact of sanctions on Russian oil

Last week, Brent crude jumped 8.9% and WTI gained 7.7%, both supported by fresh US and European sanctions targeting Russian energy companies.

“Persistent challenges remain for Russian oil flows,” said Yaniv Shah, analyst at Rystad Energy. “Much depends on how strictly the sanctions are implemented and monitored.”

The US dollar saw mixed performance on Monday, ending a six-day winning streak against the Japanese yen while snapping a three-day losing streak versus the euro, as investors brace for a busy week of major central bank decisions and global trade negotiations.

The Federal Reserve will conclude its two-day policy meeting on Wednesday, followed by interest rate decisions from the European Central Bank (ECB) and the Bank of Japan (BoJ) on Thursday.

President Donald Trump said the United States and China were close to reaching a trade deal, with a meeting between him and Chinese President Xi Jinping scheduled later this week in South Korea.

The Chinese yuan climbed to its strongest level in more than a month, reaching 7.1103 per dollar ahead of the summit. Before the market opened, the People’s Bank of China set the official midpoint rate at 7.0881 per dollar — the strongest since October 15, 2024 — and firmer than Reuters’ forecast of 7.1146.

Focus on the ECB and Bank of Japan

The yen extended its decline for a seventh straight day against the dollar, pressured by expectations of expansionary fiscal and monetary policies under new Prime Minister Sanai Takaichi. Higher oil prices also weighed on the yen and other oil-importing currencies.

After touching 153.26 yen — the highest since October 10 — the dollar later eased 0.05% to 152.80 yen. Analysts expect Japan’s so-called “fiscal premium,” driven by concerns over worsening public finances, to remain high and limit the yen’s recovery potential.

While the ECB is expected to keep policy unchanged this week, markets are turning their attention to the Bank of Japan’s meeting on Thursday.

Bob Savage, head of macro strategy at BNY, said: “There’s a real chance the BoJ could raise interest rates, and any hawkish guidance could spark a sharp move in the yen.”

The central bank is likely to discuss whether current conditions justify resuming rate hikes amid easing recession fears, though political factors may prompt a delay.

Federal Reserve prepares for 25-basis-point rate cut

With markets fully pricing in a 25-basis-point rate cut by the Fed, investors are focused on any signals regarding the potential end of quantitative tightening (QT).

Strategists at Barclays said, “The biggest market catalyst would be an immediate end to QT with hints of upcoming Treasury bill purchases to support bank reserves.”

They added that such policy shifts in the past typically boosted risk assets, which now show a growing positive correlation with the dollar.

Savage of BNY added: “Given tighter funding conditions and shrinking reserves, the Fed is likely to scale back quantitative tightening soon.”

The dollar index was nearly flat at 98.90. The euro traded steady at $1.1628, while gaining to a new record high of 178.13 yen. The Swiss franc also hit a record high of 192.27 yen.

Strong economic data from the eurozone last week reinforced expectations that the ECB will keep rates elevated for longer, lending further support to the common currency.

Currency and commodity moves

The Australian dollar rose 0.4% to $0.6541, supported by improved risk sentiment following progress in US-China trade talks, which lifted demand for higher-yielding assets.

Mujhabeen Zaman, head of FX research at ANZ Bank, said in a podcast: “We expect the US dollar to remain firm in the near term. October and December rate cuts are fully priced in, so any cautious tone from the Fed will likely support the dollar.”

In digital assets, Bitcoin rose 1.8% to $115,441.69, while Ether jumped 4% to $4,227.56.

Ray Attrill, head of FX strategy at National Australia Bank, said: “We’re seeing a positive start to the week for risk sentiment, thanks to upbeat headlines on trade talks over the weekend. That improving risk appetite is putting mild pressure on the US dollar.”

Gold prices fell in European trading on Monday, extending losses for the second consecutive session and moving toward a two-week low. The metal is also at risk of losing its footing above the key psychological level of $4,000 per ounce amid weaker safe-haven demand as trade tensions between the United States and China continue to ease.

The Federal Reserve’s highly anticipated policy meeting begins Tuesday, with a decision due Wednesday. Markets currently expect a 25-basis-point interest rate cut — the second consecutive reduction in US borrowing costs.

Price Overview

• Gold prices fell 1.4% to $4,053.94 from an opening level of $4,112.53, after touching an intraday high of $4,112.53.

• On Friday, gold slipped 0.35%, resuming its losses after a brief recovery from a two-week low of $4,004.56 per ounce.

• The metal lost 3.3% last week, marking its first weekly decline since August, as profit-taking accelerated from an all-time high of $4,381.73 per ounce.

• That decline ended the longest winning streak since June 2020, which had lasted nine consecutive weeks.

Easing Trade Tensions

On Sunday, senior economic officials from the US and China held key talks to outline a framework for a potential new trade agreement expected to be presented to President Donald Trump and Chinese President Xi Jinping in the coming days.

The two leaders are scheduled to meet Thursday in South Korea — their first encounter since the start of Trump’s second term — in what is expected to be a pivotal moment for bilateral relations, particularly concerning global trade and geopolitical stability in Asia.

Federal Reserve Outlook

The Fed’s two-day policy meeting begins Tuesday, with a decision due Wednesday. Markets widely expect a 25-basis-point rate cut, marking the second straight reduction in US rates.

The accompanying policy statement and remarks from Fed Chair Jerome Powell are expected to provide clearer signals on whether additional rate cuts could follow later this year.

According to CME’s FedWatch tool, markets currently price in a 97% probability of a 25-basis-point cut this week and just 3% odds of no change.

Outlook for Gold

Kyle Rodda, an analyst at Capital.com, said: “The potential trade deal between the US and China came as a surprise and was generally seen as a positive development for markets — though, of course, that’s negative for gold.”

He added: “Market momentum has begun to cool, and sentiment is more neutral now. The key reason gold remains supported is the expectation of continued fiscal and monetary easing in the months ahead. If that persists, gold is likely to maintain its upward trend.”

SPDR Holdings

Holdings in the SPDR Gold Trust — the world’s largest gold-backed exchange-traded fund — fell by 5.44 metric tons on Friday to 1,046.93 metric tons, marking the lowest level since October 16.