Bitcoin Falls Ahead of Nvidia Earnings, Fed Minutes — Market Talk

0821 GMT - Bitcoin edges lower as investors turn cautious ahead of key earnings from AI group Nvidia and the Federal Reserve's latest meeting minutes. "All eyes will be drawn to Nvidia's results due out later, and given the trade tariff turmoil which struck in April, there's an expectation that the numbers and guidance might not be as stellar as investors have become used to," Hargreaves Lansdown analyst Susannah Streeter says in a note. The minutes of the Fed's May 7 meeting when it left interest rates unchanged will be published at 1900 GMT. The Fed has indicated that it is in no rush to cut rates on uncertainty over the U.S. economic outlook. Bitcoin falls 0.8% to $108,787, according to LSEG. ([email protected])0751 GMT - The Swedish krona's positive correlation to risk sentiment has seemingly broken down recently, ING's Francesco Pesole says in a note. The krona started the week softer even as President Trump's decision to delay EU tariffs boosted risk appetite, he says. The krona appears to be moving in "near-perfect asymmetry" with the dollar rather than market sentiment. Last week, Treasury concerns coincided with a stronger krona versus the euro. "One reason may be that the krona has been supported by equity repatriation from the U.S., with negative U.S. news accelerating these flows." The euro trades flat at 11.5072, having reached a three-and-a-half-week high of 11.0126 on Tuesday, according to FactSet.([email protected])0738 GMT - Yields on U.K. government bonds, or gilts, rise as investors shift from safe-haven assets such as government bonds to risky assets amid risk-on sentiment ahead of Nvidia's earnings report due on Wednesday. "A positive quarterly report from Nvidia could further bolster risk appetite," Jochen Stanzl, chief market analyst at CMC Markets, says in a note. The 10-year gilt yields rise 1 basis point to last trade at 4.693%, Tradeweb data shows. ([email protected])0731 GMT - The dollar's recovery is likely to remain limited as concerns over slowing U.S. economic growth and the U.S. budget deficit persist, ING analyst Francesco Pesole says in a note. A rebound in the Conference Board's U.S. consumer confidence survey for May has contributed to the dollar's rise, he says. However, more positive data are needed to rebuild confidence in U.S. growth while deficit worries "aren't disappearing anytime soon." The dollar continues to face "downside risks" in the near term. "The upside surprise in consumer confidence reduces those risks, but we remain cautious about chasing the DXY dollar index above 100." The DXY rises 0.1% to 99.6650. ([email protected])0725 GMT - Bank of Japan Gov. Kazuo Ueda's comments have helped contain the rise in Japanese government bond yields but the BOJ is likely to remain very reluctant to alter its current policy plans, says MUFG's Derek Halpenny in a note. Earlier in the day, Ueda pledged to closely monitor moves in the superlong sector. "The BOJ is determined to normalize the monetary policy framework and not reacting would be the best signal that decades of mild deflation have come to an end," the head of research says. The onus therefore is likely to fall back on the government to address fiscal deficit concerns, Halpenny says. ([email protected])0713 GMT - The euro looks unlikely to replace the dollar as the dominant global currency, Commerzbank's Thu Lan Nguyen says in a note. The dollar's dominance is based on its role in cross-border transactions, she says. The euro came close to challenging the dollar in this regard in 2017 when Emmanuel Macron was elected French President. Macron campaigned for greater integration of the eurozone. For investors this reduced the risks associated with the euro but disillusionment quickly set in again after the election, Nguyen says. "A currency that is exposed to the risk of a break-up of the currency area obviously finds it difficult to assert itself as a vehicle currency." That means replacing the dollar will prove difficult, she says. ([email protected])0656 GMT - Eurozone government bond yields edge higher, tracking the direction but not the magnitude of rises in ultralong Japanese bond yields. A weak 40-year JGB auction prompted rises in domestic bond yields, leading to higher bond yields on other markets, too. "The front-end can't benefit from lower inflation pointers as the news on ultra-long supply are in the driving seat," says Commerzbank Research's Erik Liem in a note. In the eurozone, Spain is set to syndicate a new 10-year government bond, while Germany will auction a combined 2 billion euros in 2038- and 2040-dated Bunds. Besides, retail subscriptions continue for Italy's BTP Italia. The 10-year German Bund and Spanish bond yields are up about 1 bp at 2.548% and 3.155%, respectively, according to Tradeweb. ([email protected])0641 GMT - The dollar rises after a fall in yields of ultralong Treasurys eased fears about the U.S. debt trajectory, Deutsche Bank analysts say in a note. A sharp decline in ultralong Japanese bond yields on Tuesday, fueled by speculation that Japan was considering revising its bond-issuance plans, had a knock-on effect on Treasurys, they say. Tuesday's improved U.S. consumer confidence survey data from the Conference Board also lifted the dollar. The data support the view that a serious economic downturn will likely be avoided, the analysts say. Meanwhile, there is growing optimism that more trade deals are in the pipeline, particularly after President Trump agreed to delay threatened EU tariffs, they say. The DXY dollar index rises 0.2% to 99.712. ([email protected])0639 GMT - The Reserve Bank of New Zealand cut its official cash rate by 25 bps to 3.25%, with the revelation that the decision to cut was not a unanimous one interpreted as a hawkish signal by financial markets, says Abhijit Surya, economist at Capital Economics. Still, he puts more emphasis on the fact that the central bank is now projecting a lower path for interest rates than it did in February. Accordingly, he now thinks the RBNZ will be cutting into 2026, with the OCR to bottom out in 1Q 2026. ([email protected]; @JamesGlynnWSJ)0635 GMT - Long-dated U.S. Treasury yields rise as weak demand at Japan's 40-year government bond auction sparked a renewed jump in ultralong JGB yields, with some spillover to other markets. "Global yields are giving back some of their gains this morning," say market strategists at Deutsche Bank Research. The 10- and 30-year U.S. Treasury yields rise 4 bps to last trade at 4.474% and 4.981%, respectively, according to LSEG. ([email protected])0629 GMT - The weakness in Japanese government bonds should be attributed largely to a supply-demand imbalance, Capital Economics' Thomas Mathews says in a note. Fiscal concerns appear to have been the proximate cause, although Capital Economics doesn't think they are particularly worrisome, the head of markets for Asia-Pacific says. "The underlying issue that allowed those concerns to have such an impact, though, was arguably a supply/demand imbalance." Demand for ultralong JGBs seems to be structurally lower than it has been, he adds. In addition, rising short-dated bond yields have meant that institutions that had moved out the curve in response to negative rates and yield-curve control may now be moving back in, he says. ([email protected])0627 GMT - The Reserve Bank of New Zealand cut its official cash rate 25 bps to 3.25% as expected, but it delivered a more measured message, and revealed a 5-to-1 split committee vote, says Prashna Newnaha, interest rate strategist at TD Securities. He shifts his forecast for a further OCR cut from July to August as a result. Still, Newnaha retains his call for a 3% terminal OCR. ([email protected]; @JamesGlynnWSJ)