| Central bank officials warn of a higher peak, Bitcoin has a rough day and what Wall Street may have got wrong about Xi Jinping's new money men. — David Goodman To catch up on the trading day in the UK and Europe, check out Markets Today. Central bankers around the world are pushing back against the idea of an imminent pause in rates, cautioning that they may need to raise rates to a higher peak than previously expected. Two Fed policymakers -- Governor Christopher Waller and Atlanta Fed President Raphael Bostic — yesterday flagged recent stronger-than-expected economic data as a reason to push rates even higher, while European Central Bank Governing Council member Pierre Wunsch said market bets for euro-area interest rates peaking at 4% may prove accurate if inflation remains elevated. Even the Bank of England, which has been less equivocal about where rates may peak, has noticed the changing outlook. Chief Economist Huw Pill said Thursday that the UK economy has proved "slightly stronger than expected" over the past month and wage growth stickier than thought. Bitcoin dropped to the lowest level in about two weeks, part of a wider retreat in crypto markets as investors digested the unraveling of a key industry payments network. The digital-asset industry is absorbing the fallout of the troubles at crypto-friendly US bank Silvergate Capital, which has said that it's reviewing whether it can remain viable. The bank offers a widely used payments network that facilitates the real-time transfer of funds between crypto firms. But many digital-asset exchanges, stablecoin issuers and trading desks are no longer accepting or initiating payments through Silvergate. Bitcoin sank as much as 6% before paring some of the slide on Friday. Smaller coins such as Ether, Avalanche and the meme token Dogecoin also suffered declines. China is about to see its biggest reshuffle in decades as a generation of internationally respected economic officials makes way for a clutch of politicians better known for strong ties with President Xi Jinping than academic credentials or overseas exposure. That prospect is ratcheting up anxiety from Wall Street and Washington to the UK and Japan, with concerns the new lineup will prove to be Xi yes-men who take China further toward state intervention and international isolation. But there's an alternative take. Whisper it quietly, but perhaps trust from the top, experience toughing it out in China's fierce political system and a pragmatic approach to policymaking are more important than rigid adherence to the economics textbook. If that's the case, the new team may turn out to be better placed than their predecessors to push through the painful reforms China now needs. Stocks were set for a weekly gain after heavy losses in February, as investors took comfort in underlying economic strength and started March on a high note. Treasury yields fell after moving higher across the curve Thursday, though the 10-year benchmark held above 4%. The dollar dropped as a gauge of the currency's strength headed for its first weekly loss since January. It's the first Friday of the month, but investors will have to wait until next week for the all-important US payrolls report, which will round off a heavy few days for data. Instead, there is only a brace of services reports today, before the Fed's Lorie Logan, Raphael Bostic and Michelle Bowman make remarks. Here's what caught our eye over the past 24 hours: The whole Treasury market moved to yields above 4% as a relentlessly robust US data pulse met a similarly robust rhetorical response from policymakers. Federal Reserve Bank of Atlanta President Raphael Bostic, currently deemed on the dovish side by Bloomberg's spectrometer, is mulling whether the US cash rate will need to go beyond the 5% to 5.25% range he has endorsed as necessary to tame cost pressures. Markets are already pricing in strong odds for a 5.5% peak, and they've backed away from the expectation that the Fed will pivot to rate cuts this year to favor the idea it won't ease policy before 2024. Meanwhile, the trader who bet big in early February on a 6% cash rate has begun unwinding the position, which has already doubled in value since it was put on. That number four cropped up again in Europe. For the first time, investors boosted bets on the ECB's peak interest rate being higher than 4% after inflation in France and Spain came in unexpectedly hot. Core CPI growth for the euro area came in at a record high later in the week to underscore the case earlier laid out by the central bank's Chief Economist Philip Lane. He said the ECB might hold borrowing costs at a high level for some time once they reach their peak. It all made for a rough start to March after February saw investors hit the sell button across assets. Tumbling bonds completely unwound the gains they made during the market's best January on record. All the same, the fact that yields are at the highest level in a decade keeps investors clinging to the hope of a strong bond-market rebound at some stage in 2023. There's also the consolation of the actual income now on offer. For the first time in more than two decades, some of the world's most risk-free securities are delivering bigger payouts than a 60/40 portfolio of stocks and bonds. Short-end yields may also get an extra fillip as the US Treasury Department is on the cusp of once again slashing the amount of bills floating around, potentially creating ripples in funding markets as investors chase a dwindling supply of securities or hunt for other places to stick short-term cash. | 
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