Bitcoins sit on top of a collection of U.S. one dollar bills. (Photographer: Chris Ratcliffe/Bloomberg)

Five Things You Need to Know to Start Your Day

(Bloomberg) -- All eyes on the debut of Bitcoin futures, central bank decisions from the Fed, ECB and BOE this week and China’s continuing crackdown on the debt binge. Here are some of the things people in markets are talking about.

Bitcoin Futures Start 

Trading in bitcoin futures began at 8:00a.m. Tokyo time, with Cboe Global Markets becoming the first major exchange to offer the contracts pegged to the cryptocurrency.  Fewer than 120 January contracts traded in the first seven minutes of trading, with the price getting as high as 16,660 before slipping below 16,000. Bitcoin itself spiked briefly as the futures opened, nearly reaching $16,000. The virtual currency, which has divided opinions among executives and central bankers worldwide about its legitimacy as an asset, has been on a wild ride in the past two weeks and at one point flirted with the $20,000 level. Cameron Winklevoss, said to be one of the largest holders, predicted it will rise as much as 20-fold as investors come to view it as an upgrade to gold. Meanwhile, New Zealand central bank governor Grant Spencer warned the gains resemble a speculative bubble and it's too unstable to be useful in the future. Similar contracts start trading in a week on CME Group, another Chicago-based exchange, in a test of whether institutional money will go after bitcoin, which so far has mainly lured individual investors.

Coming Up …

Central banks will be in the spotlight in a week when economic data is pretty thin. The Federal Reserve is widely expected to raise interest rates on Wednesday after November's jobs report showed U.S. payrolls rose 228,000 versus an expected 195,000, underscoring robust U.S. economic conditions and a solid labor market that they hope will eventually fan inflation. The expected quarter-point increase will be the last for Chair Janet Yellen before Jerome Powell takes over in February.  A day later, the European Central Bank may reveal details of how it will taper monthly asset purchases beginning January. The Bank of England is widely expected to keep its key rate on hold after November's increase. 

Taming Inflation

China’s consumer and factory inflation moderated in November from a year earlier, suggesting policy makers are doing the right thing by addressing the ballooning pile of debt with tougher financial regulation rather than monetary tightening. The producer price index rose 5.8 percent in November from a year earlier, while consumer prices climbed 1.7 percent, slower than the 1.8 percent forecast. The numbers came amid an undertaking following a Communist Party Politburo meeting led by President Xi Jinping that the government will better support the real economy and promote higher-quality and more efficient development. Moderating inflation pressures mean there is “little urgency to tighten,” according to Fielding Chen, an economist at Bloomberg Economics in Hong Kong.

Futures Climb 

Equity markets across the Asia-Pacific region look well supported following the kicker that the U.S. jobs report gave to American shares on Friday. It bolstered optimism in the global economic outlook and sent futures on indexes in Japan, Hong Kong and Australia all higher late Friday. With Bitcoin futures beginning trading for the first time, all eyes will be on how the Chicago exchange deals with a any price volatility.

BOJ’s ETF Purchases 

It might be time for the Bank of Japan to consider reining in its purchases of exchange-traded funds as stocks surge and consumer prices inch higher. The Japanese central bank’s buying has been criticized for distorting the market and investor say conditions have improved since July last year, when the bank doubled its ETF buying goal amid concerns about a market downturn after the Brexit vote. The BOJ started buying ETFs in 2010 and accelerated purchases as part of an unprecedented stimulus package aimed at revitalizing the economy. The central bank had spent $150 billion on Japanese ETFs as of Dec. 7 and owned 74 percent of the market at the end of October.

What we’ve been reading

This is what caught our eye over the last 24 hours.

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