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Oil prices rebound on the uncertainty surrounding the Iran peace agreement and inventory reductions
The oil prices recovered on Thursday, after two days of losses. This was due to supply concerns arising from the uncertainty surrounding the end of the Iran War and the U.S. inventory withdrawal which raised fears about the depletion of global stocks. Brent crude futures grew 81 cents or 0.77% to $105.83 a barrel by 0055 GMT. U.S. West Texas intermediate futures rose 97 cents or 0.99% at $99.23. Both benchmarks fell more than 5.6% after U.S. president Donald Trump announced that negotiations with Iran are in their final stages. He also threatened to launch further attacks against Iran if they refused to agree to a peaceful deal. Iran warned against any further attacks and announced measures to consolidate its control of the Strait of Hormuz, a vital waterway that before the war transported oil and liquefied gas equaling about 20% of world consumption. It has since been mostly closed. Analyst at Haitong Futures, Yang An said: "The sharp fall in oil prices appears to be pricing the possibility of a breakthrough" in the negotiations. Yang stated that if Trump insists upon?making no compromises to Iran then an agreement is unlikely and the outcome of the negotiation could'reverse sharply. The?Iran announced on Wednesday a new "Persian Gulf Strait Authority" that would create a "controlled marine zone" along the Strait of Hormuz. Iran closed the Strait as a retaliation for the U.S. attacks and Israeli attacks which started the conflict on February 28. The majority of fighting has stopped following an April ceasefire, but the U.S. is blocking its coast. Supply losses in the Middle East region due to the war has forced countries into a rapid withdrawal of their strategic and commercial inventories, causing concern about the draining. Energy Information Administration reported on Wednesday that the U.S. withdrew almost 10 million barrels from its Strategic Petroleum Reserve last week. This was the largest drawdown in history. The EIA said that commercial crude inventories dropped by 7.9m barrels, to 445m barrels last weekend. This was compared with analyst expectations of a 2.9m barrel draw. Gasoline inventories fell by 1.5 million barrels while distillates increased by 372,000 barrels. Mingyu Gao is the chief researcher for energy and chemicals, at China Futures. Gao stated that "global refined-product inventories and onshore crude stocks are expected to drop below their lowest levels in this time of the year for the last five years by late may and late juin," Gao said. (Reporting and editing by Lewis Jackson, Sam Li)
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Arafura opens the way for Australia's 1st ore-to -oxide rare Earths plant
Arafura Rare Earths announced on Thursday that it had made a final investment decision for the development of 'Nolans' project in Australia's Northern Territory. This would be 'the country's 'first 'fully integrated ore to oxide rare earths 'operation. The company's shares rose 13.6% intraday to A$0.335, their highest intraday gain since 11 March. As of 0046 GMT, the benchmark index was up by 1.7%. The Nolans project is designed ?to deliver 4,440 metric tons of neodymium-praseodymium (NdPr) oxide annually, targeting markets outside China ?amid growing demand for rare earths used in electric vehicles and wind ?turbines. Arafura announced that Hatch, an engineering contractor, has been hired to support the development. Site works and early contractor mobilization are expected in advance of a construction start planned for September. The final investment decision comes after a multiyear financing and offtake plan that secured binding agreements from institutions backed by sovereigns in four countries along with supply agreements with global manufactures. The package of financing includes an equity raise of A$481million ($343.87million), A$230million in equity subscriptions by?Germany’s state-owned Development Bank Kreditanstalt fur Wiederaufbau and Export Finance Australia, and a A$200million convertible notes term sheet with the National Reconstruction Fund Corporation. The funding is part of a 'Western push' to develop rare earth supply chains outside the top producer China with international partners. The Australian government’s Critical Minerals Strategic Reserve, administered in partnership by?EFA has issued a nonbinding letter to support the potential rights to receive up to 500 tonne per year of ndPr from the project, according to the firm. The CMSR ensures that Australia and its key international partners are supplied with critical minerals.
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SpaceX IPO filing lays bare its losses and Musk's control as it stakes its future on AI
SpaceX released its IPO on Wednesday. It revealed to investors how much Elon Musk loses on?artificial Intelligence, while betting on the future of the company by transforming it into a rocket maker that is a powerhouse in AI. SpaceX's future depends on dominating markets and technologies that don't yet exist, from AI data centers to Mars missions. Musk's track record of turning Tesla into the world's most valuable automaker, developing the first reusable rocket and the largest satellite network and making it the most valuable company in the industry is enough for many to justify investing. Musk has tightened his grip on SpaceX with this filing, while shareholders have little influence over his decisions. The filing shows how important AI has become since the purchase of xAI in February, which was the main driver of spending by the company and the majority of its losses during the first quarter. This listing could be the first U.S. debut over $1 trillion, and immediately make SpaceX the most valuable public company in the world. In the first quarter of this year, only one division of SpaceX, the connectivity segment powered through satellite internet unit Starlink, was profitable. Starlink's operating profit was $1.19 Billion, but that wasn't good enough to stop the company from recording a total loss of 1.94 Billion in the first quarter. The revenue for the quarter was $4.69 Billion. The AI division alone accounted for a loss of $2.47 billion on revenue of $818 million. Musk's acquisition of his AI and social media company xAI has given SpaceX new capabilities, but also a staggering amount in spending. It accounted for 76% in its first-quarter capital expenditure of $10.1 billion, and it led to fresh losses. According to the filing, the company relies on technologies that have not been developed for much of its revenue stream in future. This includes operating data centers powered with solar power from space to reach a market worth $28.5 trillion. The filing confirmed recent reports about the IPO. The IPO was the subject of a number of reports. SpaceX, founded in 2002, has become the largest space company by launching thousands Starlink internet satellites. SpaceX's use of reusable launchers has revolutionized the economics of space and forced competitors such as Jeff Bezos Blue Origin to catch up. A successful sale of shares could put the company's value at $1.75 trillion, a record. This would make its founder the first billionaire in history. Musk will retain 85.1% combined voting power for the company. The disclosure by the company comes at a crucial time for the rocket maker. It is about to launch its next-generation Starship rocket, and it's a very important week. Musk has been given control of the company by the board, which has also tied Musk's compensation to the audacious goals of building a permanent colony of humans on Mars, and space data centers powered by 100 terawatts or 100,000 1-gigawatt nuclear power reactors. SpaceX aims to list its shares by June 12. A roadshow is planned for June 4, and the sale of shares could begin as soon as June 11. 'HALO EFFECT' Analysts and academics have said that Musk's celebrity as a CEO may be more important to some investors than SpaceX’s fundamental business, since there are no comparable companies to compare its valuation to. Reena Aggarwal is a finance professor from Georgetown University. She said that there was a "halo" effect surrounding Musk and his unconventional views. It is hard to value companies of this nature because there are no comparables. If achieved, the $1.75 trillion target would surpass Saudi Aramco’s 2019 offering. It set a world record as the largest IPO at $1.7 trillion when it was launched on Riyadh’s exchange. SpaceX was reported to have planned to raise $75 billion or more in the offering. The prospectus revealed that SpaceX would use a dual share structure, giving Class B shareholders a total of 10 votes, which will concentrate control with Musk and a few other insiders. Class A shares will be sold to the public, but will only have one vote. The company adopted a number of provisions which, when taken together, severely restrict'shareholder rights. They include forcing legal claims to be resolved through arbitration, limiting where cases can be filed, and protecting Musk against being fired by anyone but Musk. The size of the offering brought attention to Musk's increasingly interconnected business empire. This includes the leading electric vehicle manufacturer Tesla as well as his businesses for AI and brain-chip implant. SpaceX merged into Musk's AI company?xAI as part of a deal valued at $1 trillion. The developer of Grok, the chatbot developed by SpaceX, was valued at $250 billion. SpaceX signed deals with Anthropic, paying $1.25 billion per month for the use of its Colossus II and Colossus data center clusters located in Memphis, Tennessee, through May 2029. The company revealed that it was named as a defendant to multiple lawsuits stemming from the image generation and editing features of its AI chatbot Grok. SPACE RACE INTENSIFYING As private companies like SpaceX and Blue Origin vie to reduce launch costs, deploy satellite networks, and win government contracts, the race to commercialize outer space has intensified. Starlink is the largest satellite operator in the world. The network of about 10,000 satellites provides broadband internet for consumers, government and enterprise customers. The company's growing footprint in aviation, maritime, and enterprise markets helps turn capital-intensive projects into a revenue generator. SpaceX will allocate a large portion of its shares to retail investors, and it plans to host 1,500 at an event scheduled for June. This was reported in April. The company will be listed on Nasdaq, Nasdaq Texas and the Nasdaq Global under the ticker "SPCX." Bookrunners include Goldman Sachs and Morgan Stanley as well as Bank of America, Citigroup, Citigroup, and J.P. Morgan.
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McGeever: Trump blinks at the bond market's teeth as it grows bigger and worse.
Donald Trump, the president of the United States, is learning - again - how powerful and unforgiving bond markets can be. The sovereign debt markets have been hit by a global selloff, with rising inflation driving yields on bonds of long duration to the highest level in decades. The yield on the 30-year U.S. Treasury hit 5.20% on Wednesday, its highest since 2007. BNP Paribas' analysts predict a "deanchored rise" to 5.50% or even higher. The Federal Reserve's response function has changed dramatically, and traders are now predicting a rate increase by December with a 80% probability. They were preparing for two to three rate cuts in this year before the Iran war. The U.S. doesn't stand alone. Monday, the 30-year gilt yield climbed to 5.90% - its highest level since 1998. The UK bond sale has been fuelled not only by inflation concerns but also by increasing alarm about the country's financial outlook. It's already having political consequences. Andy Burnham, mayor of Manchester and widely considered the frontrunner for replacing embattled PM Keir starmer in a leadership race, reneged on a pledge made earlier to ease fiscal rules by the government if he won. Trump might seem to share little with a leftist mayor from the northern?of England. The rate drop and inflationary spike have been so extreme that Trump now seems to be backing off some of his previous pledges. In recent days, Trump has toned down his expectations that the incoming Fed chair Kevin Warsh would preside over rapid and aggressive rate reductions. Trump said in an interview published by Fortune magazine on Monday that he might have to wait for the war against Iran to be over before lowering interest rates. "You can't look at the numbers until the war ends," he said. Trump continued his comments on Tuesday by telling the Washington Examiner that he would let Warsh do what he wanted to do in regards to interest rates. He's very talented, and he will be fine. REALITY CHECK Uncertainty surrounds whether Trump's softening of his stance on interest rates was a result of his own assessment or that of Treasury Secretary Scott Bessent. Bessent is a former hedge-fund manager and former George Soros colleague who has been familiar with bond market sentiments for a long time. Trump seems to accept the fact that rates will not be reduced any time soon. The energy supply shock caused by the Iran War and the closing of the Strait of Hormuz has led to a surge in price pressures. This is because a fifth of all global oil and LNG supplies pass through this sea route. Inflation has also been higher than the Fed's target of 2% for over five years, and it is now on course to exceed 4%. According to a survey by the Philadelphia Fed of professional forecasters, CPI inflation is expected to average 6% in this quarter. Be Rational This backdrop is causing the pressure on the bond markets to increase rates. The spread between the two-year and the fed funds target is the largest in more than three decades. Investors are clearly saying that the Fed needs to tighten its policy. Tim Duy, SGH Macro Advisors, argues that the Fed will raise rates in September if it is "rational". It would still be less than two month before the midterms, which is a time that Trump will not like. Duy says that inflation is a "clear political liability" for Trump as he enters these elections. This complicates the president's calculations. Even though Trump may no longer be as fervent about lower rates, that doesn't mean he's now open to higher rates. Trump told CNBC about a month back that he'd be disappointed if Warsh did not?cut interest rates immediately. He posted on his Truth Social platform only two weeks ago: "Interest rates too high!" Reality, as reflected in the $30 trillion U.S. Bond Market, is beginning to bite for the moment. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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UN supports world court climate opinion, U.S. is among few who oppose
The United Nations General Assembly voted on Wednesday, 141-8, to support a 'world court opinion' that states have a legal duty to address climate change. UN Secretary General Antonio Guterres stated that the vote in which 28 countries abstained underscored the fact that governments must protect citizens from an "escalating crisis of climate change." He said that he welcomed the adoption of a resolution by the General Assembly on the ICJ advisory opinion on Climate Change. It was a powerful affirmation of international law, climate justice and science, as well as the responsibility of governments to protect their citizens from the escalating crisis. The resolution brought forward by Vanuatu affirms a July 20, 2025 advisory opinion of the 'International Court of Justice' (ICJ), that states are obligated by law to reduce their fossil fuel usage and combat global warming. The opinion, while not legally binding is expected to be used in legal cases involving climate change around the world. The United States, along with Saudi Arabia, Russia and Israel, Yemen, Liberia, Belarus, and Iran, joined Saudi Arabia in opposing the resolution. Turkey, India and oil producers Qatar, Nigeria and Qatar, who hosted the COP31 climate conference, were also abstaining. The Trump?administration removed the U.S.from the Paris Climate Agreement?and other?major?environmental accords and has pursued a policy to boost fossil fuel production. The resolution contains inappropriate political demands relating to fossil?fuels, said U.S. deputy ambassador to the?UN Tammy Bruce. Washington did not see any basis to require the secretary-general?to report on the legal questions raised. Vishal 'Prasad is the director of Pacific 'Islands Students Against Climate Change. The group that led the campaign to get an ICJ opinion called the vote a "commitment" to make it a reality. (Reporting and editing by Sanjeev?Miglani; Reporting by Valerie Volcovici)
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SoftBank-backed SB Energy files confidentially for US IPO
SB Energy, a power?infrastructure company, has filed a confidential IPO in the United States, it said?on Wednesday. The firm is looking to capitalize on investor demand for new listings. Investors are driving the IPO market, and recent'strong debuts' of AI chipmaker Cerebras Systems as well as geothermal -energy firm Fervo Energy have boosted confidence in firms that want to tap into public markets. SpaceX filed for an IPO in the U.S. on Wednesday. SB Energy is a large-scale infrastructure project developer backed by the SoftBank Group and OpenAI. The company was founded in 2019 and is currently building data center campuses for the rising demand of AI workloads. SB Energy announced in?January its partnership with OpenAI, as part of Stargate. Stargate is a U.S. Initiative to build next generation AI and energy infrastructure. According to its website, the company has raised over $18 billion for project capital. It also boasts a portfolio of?about 5 Gigawatts in operating and under-construction energy. Companies can prepare for IPOs without the scrutiny of the public by filing confidential documents with 'the U.S. Securities regulator. Reporting by Prakhar Shrivastava, Bengaluru. Editing by Shilpi Major and Shailesh Kuber.
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Oil and bond yields fall amid hope for Iran deal
U.S. treasury yields fell and oil prices dropped on Wednesday, as investors grew hopeful that the U.S. was close to a deal with Iran to end a war?in?the Middle East. Major stock indexes also rose - with?chipmaker stocks rising ahead of Nvidia quarterly results. Investors continue to watch headlines to see if there are any signs that the U.S. is making progress in its negotiations with Iran. Donald Trump, the U.S. president, said that on Wednesday negotiations with Iran are in their final stages. He also warned of more attacks if Iran does not agree to a deal. Trump said that the United States would wait for a few more days to get the "right response" from Iran. The U.S. Dollar fell from its?six week high while U.S. Crude fell $5.89 and settled at $98.26 per barrel. Brent fell $6.26 and settled at $105.02. Shipping data revealed that there were also some signs of an easing of the Gulf pressure on Wednesday, when two Chinese oil tanks left the Strait of Hormuz. The yield on the benchmark 10-year U.S. notes dropped 9.4 basis points, from 4.669% at late Tuesday. Recently, yields reached multi-year highs on inflation fears fueled by war. Consumer discretionary led the gains among S&P sectors. Jake Dollarhide is the CEO of Longbow Asset Management, located in Tulsa. He added that "pessimism is on the horizon" because the Fed has been pushed into a corner by higher oil prices. Fed funds futures traders have priced in about 50% odds that rates will be raised by the Federal Reserve in December. This is a dramatic change from the markets' expectations before the Iran War began in late Febuary, when they had been expecting two rate cuts for this year. The Dow Jones Industrial Average rose by 645.47, or 1.31 %, to 50,093.55. The S&P 500 gained 79.36, or 1.08 %, to 7,432.97. And the Nasdaq Composite increased by 399.65, or 1.55% to 26,270.36. The MSCI index of stocks around the world rose by 9.86 points or 0.90% to 1,101.65. The STOXX 600 pan-European index increased by 1.46%. In Europe and Japan too, longer-dated bonds were sold, but like Treasuries they also found relief on Wednesday. The benchmark yield for the eurozone, Germany's 10-year bond, has fallen 3 basis points to 3.16% from its 15-year high on Tuesday. The benchmark yield on 10-year U.S. Treasury bonds reached its highest level in 16 months Tuesday. Meanwhile, 30-year yields have hit their highest levels since 2007. NVIDIA RESULT, SPACEX FILING Nvidia's shares fell slightly after the close bell. The company announced an $80 billion program to repurchase shares and forecasted second-quarter revenues above Wall Street expectations. The stock closed the regular session with a 1.3% gain. The index of semiconductors closed the regular session with a 4.5% gain. After the closing bell, SpaceX also revealed its IPO filing. The company, which has revolutionized rocket tech, opened their books. This listing could be the first trillion dollar U.S. stock market debut. The dollar index (which measures the greenback against a basket including the yen, euro and a few other currencies) fell by 0.22% on the currency market to 99.09 while the euro rose by 0.22%, reaching $1.163. The dollar fell 0.14% against the Japanese yen to 158.81. Spot gold increased 1.39%, to $4543.55 per ounce. Reporting by Caroline Valetkevitch and Alun Qiu in New York; Additional reporting by Stella Qiu, Editing by Nick Zieminski & Matthew Lewis
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SpaceX's IPO: The Road to Success
Elon Musk filed SpaceX's hotly anticipated U.S. Initial Public Offering?on Wednesday. This move has transformed space exploration from being a speculative endeavor to a mainstream investing theme. Here's a timeline of SpaceX’s journey towards its blockbuster IPO. Elon Musk founded SpaceX in March 2002 using the money he earned from selling PayPal. SpaceX launched its first rocket in March 2006, but it failed. September 2008 - Falcon 1 was launched successfully by SpaceX for the first launch and became the world's first liquid-fuel rocket. SpaceX signed its first major contract in December 2008 with NASA for the transportation of cargo and supplies to International Space Station. May 2012 - SpaceX Falcon 9 rockets launched a Dragon capsule into space, becoming the first private spacecraft docked at the ISS. Falcon 9 Rocket explodes in mid-air on June 15, 2015. December 2015 – First successful vertical landing of Falcon 9 rocket. This was the first large rocket to successfully recover from a controlled landing after it had delivered a payload in orbit. February 2018 - Musk's Tesla Roadster, and its mannequin Starman driver, were launched into space by the?first Falcon Heavy launch. April 2019 - Crew Dragon capsule explodes during a ground test. May 2019 - SpaceX started launching Starlink satellites. This constellation is capable of beaming high-speed internet signals from space to customers all over the world. October 2020 - SpaceX completes its 100th successful Falcon rocket flight?since Falcon 1 flew into orbit for the first time in 2008. SpaceX Crew-1 will be the first operational mission in NASA's Commercial Crew Program. NASA has awarded SpaceX a contract for the first commercial human landing on the Moon as part of the Artemis program in April 2021. SpaceX launches the first ever all-civilian crew to orbit the Earth in space on September 20, 2021. NASA's Double Asteroid Redirection Test mission (DART) was launched in an interplanetary transfer orbit on a SpaceX rocket. This marks the first ever test of a planet defense system that is designed to protect Earth from a possible asteroid impact. April 2023: First Starship Rocket explodes after losing control. November 2023: Starship launch fails minutes after reaching the space. November 2023: A U.S. Judge?blocked the U.S. Department of Justice's pursuit of an administrative case accusing Elon Musk’s SpaceX of refusing to illegally hire refugees and asylum seekers. September 2024: The SpaceX Polaris Dawn spacecraft performed its first privately-managed spacewalk. SpaceX's "Starship" rocket fragmented in space just minutes after it was launched from Texas. This forced airline flights flying over the Gulf of Mexico, to change course to avoid falling debris. Starship explodes during a test on the ground in June 2025. February 2026 - SpaceX acquired Musk's artificial-intelligence startup xAI in a record-setting deal worth $250 billion, unifying the world's richest man's AI and space ambitions by ?combining the rocket-and-satellite company with the maker of the Grok chatbot. Musk stated that SpaceX will be focusing on building "a self-growing city" (February 2026) on the Moon. NASA official stated that the Starship rocket has been delayed by at least two years since NASA selected it as an astronaut'moon lander' in 2021. It is expected to need a?more amount of time before landing on the moon. SpaceX files its U.S. initial IPO confidentially in April 2026, laying the foundation for what could be one of the largest stock market flotations ever. SpaceX files its long-awaited U.S. IPO in May 2026, and it is expected to be the largest listing ever. (Reporting and editing by Leroy Leo, Anil D'Silva and Arasu Kanagi Basil in Bengaluru)
Shares rise on Nvidia earnings and Samsung strike suspension
Stocks rose on Thursday as some vessels resumed their passage through the Strait of Hormuz. Meanwhile, forecast-beating Nvidia results and a suspended workers' strike by Samsung Electronics boosted?shares of the chipmakers.
The MSCI broadest Asia-Pacific share index outside Japan rose 1.2% to end a four-day losing streak. Meanwhile, the KOSPI soared over 4%.
Brent crude futures rose 0.7% in Asia to $105.76 per barrel, retracing their declines following the passage of three supertankers through the Strait on Wednesday. Iran also consolidated control over the waterway.
Wall Street saw the S&P500 rise 1.1% and the Nasdaq Composite rally 1.5%, after three days of declines. President Donald Trump stated that the United States would be ready to continue with more attacks against Iran if Tehran refused to agree to a peaceful deal. However, he suggested Washington wait a couple days until it "got the right answers."
Analysts at Westpac said in a report that "Oil prices fell and other major markets rallied as investors were comforted by headlines quoting Trump as saying the U.S. is in the final stages" with Iran.
Asian chipmakers' stocks rose on Wednesday after Nvidia announced a better-than expected revenue forecast. CEO Jensen Huang wanted to assure investors that world's largest company, Nvidia, could sustain a blockbuster increase in demand for their flagship AI chips.
Dan Ives is the global head of technology at Wedbush in New York. He said, "The chipscape remains Nvidia’s world, with everyone else paying rent.
Nvidia shares dropped 1.1% during extended trading while S&P500 e-minis futures fell 0.5%.
Tony Sycamore is a market analyst with IG Sydney. He said that the market's response was "relatively muted" by his own high standards. The lack of China sales in the outlook, and guidance that only modestly exceeded expectations left some investors wanting more fireworks.
Samsung Electronics shares in Seoul jumped more than 6% following the union's announcement that it would suspend its industrial action if a tentative wage agreement was reached with the company. This prevented a strike of nearly 48,000 employees, which threatened South Korea's economic growth and the global supply of?chips.
The Nikkei index rose 1.9% in Japan after S&P Global’s flash manufacturing PMI expanded a?slower rate than a?month earlier. It?slipped to 54.5 from 55.1 last month.
Data from the Finance Ministry showed that Japanese exports increased 14.8% on an annual basis in April. This was the eighth consecutive month of growth, and dispelled fears about a global economic stagflation.
Australian shares rose 1.5%, despite mixed leading indicators. Flash PMI data showed that activity in Australia's service sector slowed in May to 47.7 from 50.7 one month earlier. However, a manufacturing gauge remained at 50.2, which is just above the threshold separating growth from contraction.
The yield on the 10-year Treasury bond in the United States increased 1.9 basis points, to 4.588%. This is a return to growth after a three-day decline. The minutes of the Federal Reserve meeting on April 28-29 showed that policymakers were more concerned about inflation last month.
Bitcoin fell 0.3% to $77,453.44, and ether dropped 0.3% to $2,127.53. (Reporting and editing by Jacqueline Wong; Gregor Stuart Hunter)
(source: Reuters)