Bitcoin Falls as Investors Stay Cautious — Market Talk

0838 GMT - Bitcoin falls as sentiment toward risky assets remains shaky ahead of U.S.-China trade talks, and uncertainty over the U.S. economic and political outlooks. Protests in California over President Trump's immigration stance "injected geopolitical risk into the mix," IG analysts say in a note. Investors await U.S. inflation data on Wednesday, which could show tariffs are causing prices to rise. Despite some optimism that there could be a positive outcome from U.S.-China talks, markets "remain delicately balanced," IG says. Bitcoin falls 0.6% to $105,602, LSEG data show. ([email protected])0815 GMT - Eurozone bond yields fall, reversing some of last week's rise. Falls are likely to be limited, however, given that the European Central Bank last week flagged that it was close to the end of its rate-cutting cycle, Commerzbank strategists say in a note. In addition, U.S. jobs data on Friday were better than expected, diminishing prospects of a near-term interest-rate cut by the U.S. Federal Reserve. "As the ECB's new rhetoric and decent U.S. payrolls are still sinking in, the downside for yields appears limited." German 10-year Bund yields fall 5 basis points to 2.520%, according to Tradeweb. Trade is quiet given there are holidays in many European countries on Monday. ([email protected])0811 GMT - Gold futures are broadly flat amid mixed macroeconomic signals. Futures are flat on $3,344.50 a troy ounce. The precious metal is up more than 23% year to date, though its rally has slowed as crucial U.S. data points to a stronger-than-expected U.S. economy. Friday's nonfarm payroll data showed falling long-term unemployment, reducing inflation concerns and pressure on the Federal Reserve to ease monetary policy, XMarabia's Nadir Belbarka says in a note. That said, political pressure is adding volatility to interest-rate expectations, Belbarka writes. President Trump urged a 100 basis point rate cut on Saturday and attacked Fed Chair Jerome Powell, reigniting concerns of political interference in the central bank, Belbarka says. Perceived risk to the central bank's autonomy has fueled demand for gold as a geopolitical as well as monetary hedge, he adds. ([email protected])0757 GMT - Good news from new trade talks between the U.S. and China could help to calm market sentiment, helping risky assets and the dollar, ING's Chris Turner says in a note. President Trump said Friday that Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer will meet Chinese officials in London on Monday, and that the talks "should go very well." Investors will want reassurance that there is no longer a threat of 100%-plus tariffs, he says. The DXY dollar index falls 0.3% to 98.902. European equities edge lower, with the Stoxx Europe 600 index down 0.1%. ([email protected])0736 GMT - The dollar falls at the start of the week as Friday's better-than-forecast U.S. jobs data fail to provide lasting support to the U.S. currency. The U.S. economy remains shaky, keeping the dollar vulnerable as U.S. interest-rate cuts are likely in the second half of the year, MUFG's Lee Hardman says in a note. The labor market isn't loosening enough to offset risks of higher inflation in the near term due to trade tariffs, he says. Tighter immigration policies under President Trump have also triggered social unrest over the weekend in Los Angeles. These "could contribute to a further loss of confidence in the U.S. dollar," he says. The DXY dollar index falls 0.3% to 98.929. ([email protected])0658 GMT - Investors should hold more Asian government bonds, strategists at DBS Group Research say in a report. "This can be viewed both from push and pull factors," they say. Diversification out of USD assets has been a major push factor over past few months as confidence in the U.S. gets eroded. Given diversity across Asia markets, each offers "unique pull factors," the strategists say. Government bonds of China, Singapore, and Hong Kong could be "logical choices if investors required highly-rated safe assets." Malaysian government securities might also be a mid-yielding alternative, they add. ([email protected])0657 GMT - The coming week will be a big one for the U.S. bond market, says XTB's Kathleen Brooks. On Thursday, the U.S. will auction 30-year Treasurys, which currently hover close to 5%. Investors are cautious after weak demand at a 20-year Treasury auction three weeks ago. High long-term borrowing costs add to funding pressures for the U.S. government as it tries to pass a budget that will add to the national debt, Brooks says. If upcoming trade talks with China go badly then sour risk sentiment could mean demand at the auction is weak. If risk appetite remains strong, the auction could go well, she says. The 30-year Treasury yield rises 1 basis point to 4.972%, Tradeweb data show. ([email protected])0538 GMT - The Chinese economy likely lost some steam in May as trade frictions with the U.S. continued to weigh on growth, according to a poll of economists by The Wall Street Journal. China's industrial output likely grew 5.9% on year last month, edging down from April's 6.1% increase. Retail sales, a proxy for consumption, likely rose 4.9%, also easing from the prior month's 5.1% growth. Fixed-asset investment likely expanded 4.0% on year in the January-May period, matching the pace seen in the first four months of the year. The set of data, along with figures gauging the health of China's property sector, is due on June 16. ([email protected])0525 GMT - China's new loans likely jumped in May in part due to seasonality, according to a poll of economists surveyed by The Wall Street Journal. Chinese lenders may have handed out 850 billion yuan of loans last month, largely in line with last May's level and surging from April's CNY280 billion. China's overall credit expansion probably got a big lift from government borrowing, which has helped sustain the country's credit growth since the start of 2025, surveyed economists say. M2, a broad gauge of money supply, likely grew 8.1% on year last month, edging up from April's 8% increase, the poll shows. ([email protected])0513 GMT - The Chinese yuan is likely to keep strengthening against the dollar in the short term, Barclays Research says in a note. The PBOC doesn't want to encourage a more-rapid yuan strengthening, Barclays says. It likely wants to circumvent any loss in competitiveness amid ongoing tariff uncertainty and avoid rapid exporter dollar sales, it says. This likely explains a series of weaker-than-market expected USD/CNY fixings, which will likely continue. ([email protected])0440 GMT - China's producer price deflation deepened in May, and together with falling commodity prices, suggest more deflationary pressures ahead, Goldman Sachs analysts say. The deterioration in May was mainly from further price declines in upstream sectors such as energy and metal prices, they note. PPI inflation also contracted further on a month-on-month basis. Incorporating the weak data, GS lowers its 2025-2026 forecasts for headline PPI inflation to -2.4%/-0.7%, from -2.1%/-0.6% previously. Consumer price inflation held steady at -0.1% in May, as a decline in goods prices was offset by higher services costs. The CPI readings are in line with GS's quarterly forecasts. ([email protected])0435 GMT - The Indian rupee could underperform peers, driven by importer demand for the U.S. dollar and volatile foreign portfolio flows, Barclays Research says in a note. USD/INR is expected to trade with an upward bias, with 86.0 continuing to act as a short-term cap. Bond outflows have been persistent and could continue to provide a floor to USD/INR, Barclays says. Net selling in equities by foreign portfolio investors may not be sustained after India's RBI delivered an outsized 50bp rate cut last week and cut the cash reserve ratio by 100 bps. However, Barclays expects the RBI to continue accumulating forex reserves, which have climbed to US$693 billion as of May 23. A likely widening of the trade deficit in May will also not bode well for INR. USD/INR is last at 85.68. ([email protected])