Bitcoin Edges Higher on Tariff Extension — Market Talk

0712 GMT - Bitcoin rises slightly after President Trump confirmed a three-week extension to negotiate trade agreements. Trump signed an executive order extending the date his reciprocal tariffs would take effect until August 1. A pause in the tariffs was previously scheduled to expire Wednesday. Trump also outlined hefty tariffs for a number of countries if they fail to reach a trade deal. While relief over the extension provides some support to bitcoin as a risky asset, continued uncertainty limits gains. Crypto markets are showing "signs of fatigue" following recent rallies, Trade Nation analyst David Morrison says in a note. "Cryptos remain stuck in their respective ranges, with little fresh momentum emerging." Bitcoin rises 0.4% to $108,363, according to LSEG. ([email protected])0704 GMT - U.S. tariffs appear to have lost their power to shock markets, says Chris Beauchamp, chief market analyst at IG. Markets had little reaction to the tariff developments and instead appear "resigned" to the news, which could lead to dangerous complacency, Beauchamp says. However, President Trump has signaled a willingness to continue trade negotiations, negating some of the effects of the tariff threats, Beauchamp says. "At this point it feels like the administration's heart isn't in it," Beauchamp says. "It may well spur some more negotiations," but markets are likely only really bothered by deals with South Korea and Japan, Beauchamp says. ([email protected])0659 GMT - Asian countries are likely to get better trade deals under Trump's new deadline, Nomura analysts say in a research note. The new tariff rates are largely similar to those announced on "Liberation Day," and the Aug. 1 deadline gives Asian policymakers time to negotiate a better deal. While India, Taiwan and the Philippines didn't receive any letters from Trump, there may be more letters sent in the coming days and weeks, they add. Nomura expects India to strike a favorable trade deal soon, while negotiations continue for Thailand, Malaysia and Indonesia. ([email protected])0649 GMT - China's potential subsidies to booth birth rates are unlikely to have a noticeable impact, Capital Economics analysts write in a note. Bloomberg reported that Chinese authorities plan to introduce nationwide incentives starting 2025, offering cash handouts of 3,600 yuan a year for each child during the first three years after birth. There isn't an official announcement yet and the policy could still change or be dropped, the CE analysts note. If confirmed, the policy would mark a major milestone in terms of direct fiscal support for parents, they say. However, an extra 3,600 yuan a year is just over one week's income for the average household, which won't do much to alter couples' family-planning decisions, CE says. ([email protected]; @ivy_jiahuihuang)0643 GMT - The dollar falls after President Trump outlined substantial tariffs against a number of countries if trade deals aren't reached. Japan and South Korea both face tariffs of 25%, South Africa was hit with a 30% rate, and Laos and Myanmar were slapped with 40% duties. In total, letters have been sent to 14 countries about new tariffs and the White House said more letters will be arriving throughout the week. Trump also signed an executive order extending the date the so-called reciprocal tariffs will take effect by three weeks until August 1. The news increases uncertainty over trade policy and raises worries about the potential hit to U.S. economic growth. The DXY dollar index falls 0.1% to 97.357. ([email protected])0610 GMT - Malaysia's central bank could be about to make its first rate cut since May 2023, a Wall Street Journal poll suggests. Six out of the nine economists surveyed expect Bank Negara to lower its benchmark overnight policy rate by 25 bps to 2.75% this week. Three predict a hold. A rate cut could be a preemptive step to support the economy amid domestic policy shifts and rising external risks, HSBC economists say in a note. With inflation low and the ringgit strengthening, conditions offer a timely window to act, they add. The rate decision is due Wednesday. ([email protected])0603 GMT - Singapore's inflation is expected to be contained this year given modest imported inflation, gradual business cost pass-through to consumer prices, and manageable essential services price increases, DBS economists and strategists write in a research report. Headline inflation remained low in 2Q, they add. In the first five months, Singapore's imported inflation was also contained. The gradual Singapore dollar appreciation has kept external price pressures in check, DBS says. The bank lowers its 2025 average headline and core inflation forecasts for Singapore to 1.0% and 0.8%, respectively, from 1.3% and 1.0%. ([email protected])0600 GMT - The Federal Reserve's reluctance to cut interest rates could cause U.S. Treasury yields to remain elevated, BNP Paribas Asset Management's Chi Lo says in a note. With financial markets pricing in neither major disruptions to oil supplies nor a protracted conflict in the Middle East, there has been little refuge buying of U.S. dollar assets, the senior market strategist says. "It is also possible that a sustained rise in oil prices, which drives up inflation, could push up bond yields," the strategist says. The 10-year Treasury yield falls 0.4 basis point to last trade at 4.390%, according to LSEG. ([email protected])0548 GMT - European government bonds offer a compelling story from a yield pickup perspective that is hard to ignore, Mizuho strategists Evelyne Gomez-Liechti and Shoki Omori say in a note. The euro, increasingly viewed as a stable and strengthening currency, adds a layer of confidence that makes euro-denominated assets all the more attractive, they say. French and Spanish government bonds may dazzle with their yields, but political uncertainty at home dims their shine, the strategists say. Italian BTPs, meanwhile, have seen increasing Japanese buying, but memories of past political turmoil still likely haunt the more conservative players, they say. ([email protected])0546 GMT - U.S. President Trump's tariff announcement in April--'Liberation Day'--and the volatility surrounding it have deterred Japanese investors from buying large amounts of overseas sovereign bonds, say Mizuho's strategists Evelyne Gomez-Liechti and Shoki Omori. This has put the U.S. Treasury accumulation seen throughout 2023-24 on hold, while holdings of eurozone government bonds have remained around multi-year lows, they say in a note. This suggests "an apparent lack of appetite." Within the broader trend in the eurozone space, peripheral holdings have now surpassed holdings of French government bonds, or OATs, "withstanding the otherwise downtrend of other eurozone government bonds." ([email protected])0543 GMT - Thailand's already-weak growth outlook could be further weighed by factors including the unchanged U.S. tariff rate of 36%, Nomura economists and analysts say in a note. Thai Finance Minister Pichai Chunhavajira was in the U.S. last week and offered a different proposal from the initial version, which included reducing tariffs and nontariff barriers to zero. Citing a news report, Nomura notes Chunhavajira said Tuesday that the U.S. hasn't considered the new proposal, but he believes tariffs will be reduced before the Aug. 1 deadline. Nomura maintains its 2025 growth forecast for Thailand at 1.8%. ([email protected])0503 GMT - The Reserve Bank of Australia is likely to cut rates further, Capital Economics' Marcel Thieliant says in a commentary. The RBA defied widespread expectations of a rate cut at today's meeting, and its statement sounded a touch more hawkish than expected, the head of Asia-Pacific says. Nonetheless, the RBA reiterated that "the risks to inflation have become more balanced" and signaled that a rate cut had merely be postponed. Barring a major upside surprise in Australia's 2Q inflation data, Capital Economics retains its expectations for an RBA rate cut at the next meeting in August. ([email protected])