5 Things You Need to Know to Start Your Day: Americas

Good morning. Investors will have to navigate a data vacuum before next week’s Fed decision on interest rates. Plus, a rate hike is in play [View in browser]( [Bloomberg]( Good morning. Investors will have to navigate a data vacuum before next week’s Fed decision on interest rates. Plus, a rate hike is in play in Japan and Bitcoin fervor is losing steam. Here’s what people are talking about. — [Sofia Horta e Costa]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. Data vacuum It’s been a busy week for economic data in the US as the market gears up for what the Federal Reserve will say next Wednesday. Inflation and unemployment reports [have given officials more reasons]( to hold off on cutting interest rates, pushing Treasury yields higher in recent days. The adjustment means markets and the Fed are now on the same page when it comes to rate cuts — more on that from Kristine below. With no significant data prints on the calendar before the Fed meets to decide on interest rates and release its dot plot, [markets may tread water]( as investors assess the outlook with the information gathered this week. S&P 500 futures and the dollar are slightly up to start the day, while Treasuries are flat. Japan in play Alongside the Fed, decisions from central banks in the UK and Japan are also due next week. The latter could be the most market moving, especially with speculation intensifying that the Bank of Japan will raise interest rates for the first time since 2007. Japan’s largest union group [announced stronger-than-expected annual wage deals]( earlier today, adding more fuel to bets the central bank will move this month instead of waiting until April. A former BOJ official [sees a chance]( the bank’s policy board will seize the opportunity, though a Bloomberg survey of economists earlier this week showed a slim majority still saw April as more likely. Big name investors [are making large bets]( before the decision. Bitcoin retreats The cryptocurrency is, believe it or not, [actually falling today](. The largest digital asset set a fresh record of almost $73,798 on Thursday before beginning its descent, which comes amid signs that speculative fervor is petering out in the derivatives market. [Coinglass data]( earlier showed $526 million worth of bullish crypto wagers were liquidated in 24 hours — the most in about two weeks. There has been so much money chasing the crypto rally that the assets attracted a record $3.4 billion worth of inflows in the week ending March 13, according to the latest Flow Show report from the team at Bank of America. [US stock funds]( also drew a record $56.1 billion. China’s chip champions The Chinese government is [accelerating its campaign](to reduce reliance on Western imports and boost its home-grown semiconductor industry. Authorities have asked electric-vehicle makers to ramp up their purchases from local auto chipmakers and are directly instructing firms to avoid foreign semiconductors if at all possible. It comes after Washington [opened an investigation]( into potential data and cyber-security risks posed by internet-connected cars from China, including EVs. US Commerce Secretary Gina Raimondo in January [expressed concern]( that data collected by the cars could wind up in Beijing’s hands, and is overseeing an investigation that may result in sales restrictions in the US. Coming up… Adobe is sinking more than 11% in early New York trading after the [company’s weak sales outlook]( fueled concerns that new AI startups are a competitive threat. Economic data today include releases on US industrial production as well as the University of Michigan’s preliminary consumer sentiment index for March. Canada releases housing starts data, while in Colombia we’re due data on industrial production and retail sales. What we’ve been reading This is what’s caught our eye over the past 24 hours. - India’s bankers get [bigger pay hikes]( than in Hong Kong or Singapore. - Russians go to the polls, with [Putin widely expected]( to win another term. - Here’s why prices for copper and iron ore are [diverging quickly](. - The US plans to award [more than $6 billion]( to Samsung Electronics. - Middle managers make up [almost a third]( of layoffs in the US. And finally, here's what Kristine is interested in this morning Markets are once again back on the same page as the Fed in terms expecting three rate cuts in 2024. Yet there's a growing sense bond traders are in for more painful adjustments given the US economy's continued resilience. US policymakers' latest projections for borrowing costs -- as captured by the dot plot -- will be in focus when the Fed delivers its decision next week. As colleague [Liz Capo McCormick]( noted, the question is whether policymakers maintain current expectations or potentially scale them back in the wake of price increases that remain well above their 2% inflation target. Bank of America strategists warn it would take only only two officials to switch to two cuts for the median dot to move higher, and that puts the balance of risks toward higher yields. And it's not just expectations for 2024 that have investors fretting -- they're also starting to weigh how much easing the Fed will deliver next year. As of December, Fed officials expected four rate cuts in 2025. Since then, we've gotten data that showed US growth remains robust while inflation is still sticky. That said, Treasury yields that are a few basis points away from this year's high could prove enticing enough for bargain hunters, especially if the longer-term trajectory of rates remains lower. Yet for any investors enticed by US debt at this point, the reality will be that any payoff will likely come after a little bit of pain. [Kristine Aquino]( is managing editor for Bloomberg Markets Today. Follow her on X at [@krisaqnews](. Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. 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