Bitcoin Falls on Renewed Tariff Concerns — Market Talk

0718 GMT - Bitcoin falls as renewed concerns over U.S. tariffs dampen investor appetite for risky assets. An appeals court on Thursday granted a bid from the White House to temporarily suspend a federal trade court ruling that blocked President Trump's most sweeping tariffs. Treasury Secretary Scott Bessent also said Thursday that U.S.-China trade talks had stalled. "It's under this heavy cloud of uncertainty that the early risk-on rally [Thursday] fizzled out," Swissquote Bank analyst Ipek Ozkardeskaya says in a note. Bitcoin falls 0.3% to $105,828 after hitting a 10-day low of $104,714 overnight, according to LSEG. ([email protected])0654 GMT - China's official manufacturing PMI likely rebounded in May after slipping into contraction in April, following a temporary truce in the trade war between the world's two largest economies. The PMI is expected to have risen to 49.6 in May from April's 49.0, according to a poll of economists conducted by The Wall Street Journal. That would still be below the 50 mark, which suggests manufacturing activity contracted. The improvement may reflect stronger market sentiment, improved outbound shipments and a pickup in production after the U.S. and China in mid-May agreed to ease some of the tariffs imposed on each other. China's National Bureau of Statistics is scheduled to release the data on Saturday. ([email protected])0654 GMT - With rising uncertainties, Societe Generale Research's rates strategists continue to view risks to U.S. short-end Treasury yields to be skewed to the downside, they say in a note. Although the Federal Reserve will likely keep policy on hold for as long as they can, the markets will be quick to price in more cuts if employment weakens, they say. "In this context, the bond market is likely to shrug off a strong jobs report but the front-end has room to rally if the data disappoints." The two-year Treasury yield is up 0.6 basis point at 3.943%, according to Tradeweb. ([email protected])0645 GMT - The dollar rises slightly but remains at weaker levels with the DXY dollar index trading below the key 100 level amid heightened uncertainty over U.S. tariffs. A federal trade court on Wednesday struck down President Trump's most sweeping tariffs, briefly lifting the dollar to a one-week high. However, on Thursday an appeals court granted a bid from the White House to temporarily suspend the order. Treasury Secretary Scott Bessent also said Thursday that U.S.-China trade talks are a "bit stalled." The DXY dollar index rises 0.2% to 99.4940, having reached a high of 100.540 early Thursday before the appeal decision. ([email protected])Nestle's shares closed 1.35% lower at 87.51 francs on Wednesday, with markets in Switzerland closed Thursday for a holiday. "Nestle's Organic Growth Likely to Be Offset by Swiss Franc Strength — Market Talk," at 0603 GMT, misstated the day.0629 GMT - The European Central Bank is expected to proceed cautiously, with a pause at 2% likely as inflation forecasts drift slightly lower, possibly to 1.8% by 2026, says Franklin Templeton's David Zahn. Money markets fully price a 25-basis-point interest-rate cut to 2% at the June 5 interest-rate decision, according to LSEG data. "While near-term growth may soften amid uncertainty, a recovery is expected from 2026, shifting the policy focus from cuts to potential hikes," the head of European fixed income says in a note. Meanwhile, rising defence spending points to a longer-term fiscal shift, echoing patterns from previous high-spending decades, he says. Tariffs of 10%-20% are unlikely to materially affect European growth or inflation, given the strong euro and dollar-based commodity pricing, he says. ([email protected])0623 GMT - U.S. Treasury yields are little changed in early European trading after Thursday's declines across maturities as markets await PCE inflation data--the Federal Reserve's preferred gauge of inflation--at 1230 GMT. However, some market watchers still see room for short-term gains for Treasurys. "My overall biases are still towards some short-term Treasury gains as we cruise towards next Friday's NFP [nonfarm payroll] print," says Pepperstone's Michael Brown in a note. The two-year Treasury yield rises 1 basis point to 3.947%; the 10-year yield is up 0.4 basis point at 4.428%, while the 30-year is flat at 4.920%, according to Tradeweb. ([email protected])0603 GMT - Nestle is facing rising currency headwinds, with recent strength in the Swiss franc relative to the dollar likely to offset the company's organic sales growth, Berenberg analysts say in a research note. "Since the start of 2025, the Swiss franc has strengthened by 10% versus the U.S. dollar, and our model suggests the currency translation effect to Nestle's group sales in 2025 will be [minus] 4.2%, more than offsetting organic sales growth of 3.4%," the analysts say. Currency headwinds are set to hurt the Swiss food company's profitability as well, they add. Berenberg cuts its target price on Nestle to 87 francs from 90 francs. Shares closed 1.35% lower at 87.51 francs on Wednesday with markets closed Thursday for a holiday, and are up nearly 17% since the start of 2025. ([email protected]) Corrections & AmplificationsThis market talk item was corrected at 0633 GMT to reflect Nestle's shares closed 1.35% lower at 87.51 francs on Wednesday. The original version incorrectly misstated the day as Thursday in the last sentence of the item.0558 GMT - Tariff-induced market volatility has decreased somewhat, but longer-maturity U.S. Treasury yields remain well above their April 2 tariff announcement-day levels, TD Securities' Jan Nevruzi and Gennadiy Goldberg say in a note. The long-end-driven steepening of risk-free curves has been a global phenomenon, with longer-dated bond yields moving higher in the U.S., U.K., Europe, Japan and other major bond markets, the U.S. rates strategists say. U.S. Treasurys have been underperforming, they say. That said, the U.S. Treasury could hint at long-end auction size decreases as soon as the August refunding, the Senate could push back on the reconciliation bill's fiscal impact, and softening data could lead investors to pencil in a more dovish Fed, they say. ([email protected])0543 GMT - Bond issuance pressure in the eurozone is set to moderate meaningfully in 2H relative to 1H, and at the margin this should support European duration, Morgan Stanley Research's rates strategists say in a note. They forecast gross issuance in 2H to decrease by about 35% versus 1H, with issuance net of redemptions and of the European Central Bank's quantitative tightening halving versus 1H. The strategists forecast gross government bond issuance of 495 billion euros in 2H, down from 772 billion euros expected in 1H. "This should help provide some relief to European yields in 2H25," they say. ([email protected])0543 GMT - U.S. Treasurys have been a busy economic barometer as of late and the net effect of all the tumult is that the average yield on the U.S. Treasury index is about 20 basis points higher than before President Trump's tariff announcements on April 2, says Federated Hermes' R.J. Gallo in a note. U.S. budget deliberations are not yet finished and the Senate could end up cutting more spending from the bill, the senior portfolio manager for fixed income says. "The bond market would welcome any additional fiscal restraint added to the bill," he says. "Conversely, should Senate moderate push in the opposite direction to water down Medicaid cuts, the opposite net effect could occur, and Treasury yields may rise somewhat." ([email protected])0508 GMT - A trade court ruling on Trump's "Liberation Day" tariffs could limit the U.S. push to strike trade deals, Citi analysts say. While under appeal, markets may redraw some of their original assumptions, they write. Treasury Secretary Bessent told Fox News that the ruling hasn't had an impact on negotiations. "We have not seen any of that in terms of our trading partners, they are coming to us in good faith and trying to complete the deals before the 90-day pause ends," he said. "We've seen no change in their attitude in the past 48 hours." He characterized U.S.-China talks as "a bit stalled," adding that a Trump-Xi call is likely needed given their magnitude and complexity. Bessent said the two leaders have a "very good relationship" and expressed confidence that China will come to the table. ([email protected])