Bitcoin Hits 4-Week High as Demand Rises — Market Talk
0848 GMT - Bitcoin rises to a four-week high, boosted by increased demand from institutional investors and corporate treasury buyers, Tickmill Group's Patrick Munnelly says in a note. Institutional investors and corporate treasury buyers are expanding the market for digital assets, he says. Cryptocurrencies and other risky assets are also supported by hopes for a Ukraine-Russia truce ahead of a meeting between President Trump and his Russian counterpart Vladimir Putin on Friday. In another boost to risk sentiment, Federal Reserve official Michelle Bowman at the weekend argued for three interest rate cuts this year. Bitcoin rises to a high of $122,308, LSEG data show. Ethereum is also lifted by improved risk appetite, having earlier reached its highest level since December 2021 at $4,346. ([email protected])0831 GMT - U.K. employment data on Tuesday could be weaker than expected but this might not materially impact sterling, ING's Francesco Pesole says in a note. The jobs data could be upwardly revised in coming months as witnessed recently, he says. The Bank of England also showed a relaxed stance about the slowdown in the jobs market at last Thursday's meeting where it narrowly approved an interest rate cut. These factors mean the market could treat the data with more caution, Pesole says. Sterling trades flat at $1.3454. The euro rises 0.1% to 0.8656 pounds. ([email protected])0803 GMT - German Bund yields fall at the start of the week, reversing some of Friday's rise. Bunds could garner some support this week, helping yields to fall further, due to modest supply and the prospect of weak German ZEW data on Tuesday, Commerzbank rate strategists say in a note. Only two bond auctions are due this week, with bond sales from Germany and Finland. These should "provide support for Bunds, probably within the established ranges," the strategists say. External impetus will also be key, particularly Tuesday's U.S. inflation data. The 10-year Bund yield falls 2 basis points to 2.663%. ([email protected])0744 GMT - Yields on U.K. government bonds decline ahead of key data releases including U.K. labor market data on Tuesday and GDP data on Wednesday. If the data are weak, they would have the potential to revive prospects for interest-rate cuts by the Bank of England. Markets scaled back rate-cut expectations last week after the BOE's tight vote in favor of reducing rates. U.K. money markets no longer fully price in a BOE rate cut this year. The chance of a rate reduction in December stands at 76%, according to LSEG data. The 10-year gilt yield falls around 4 basis point to 4.558%, Tradeweb data show. ([email protected])0725 GMT - U.S. Treasury yields edge lower after rising last week following weak demand at auctions of three-year, 10-year and 30-year auctions. This caused the 10-year yield to hit its highest in a week. Trade calms on Monday as tariffs which took effect last week have so far had limited impact on markets. However, yields risk rising, Capital Economics' James Reilly says in a note. Weak Treasury auctions remind investors "that huge public debt to GDP ratios are not going anywhere fast." Tuesday's U.S. inflation data could also cause yields to rise if prices increase more than expected, he says. The 10-year Treasury yield falls 2 basis points to 4.264%, having hit a high of 4.289% on Friday, Tradeweb data show. ([email protected])0725 GMT - India's consumer inflation in July is expected to have eased to 1.3% on year, according to the median estimate of 10 economists polled by The Wall Street Journal. That compares with 2.1% for June and would mark the lowest monthly inflation reading since the current series began in 2012. The slowdown was likely due to food and beverage deflation and steady gold prices, the ANZ Research team said in a note. DBS economists think that headline inflation could return to above 4% by early-2026 as base effects recede in the next few months. The inflation data are due Tuesday.([email protected])0724 GMT - The Bank of Thailand is expected to cut its policy rate by 25 bps to 1.5% on Wednesday, according to six of 10 economists polled by The Wall Street Journal. The decision will likely be a close call, Citi Research economist Wei Zheng Kit writes in a recent note. A rate cut is possible due to factors including Thailand's still-tight financial conditions and heightened downside risks, he says. Citi expects another 25 bps cut each in October this year and February next year, after the new BOT governor takes office.([email protected])0643 GMT - The dollar edges lower but sticks within a tight trading range as investors await U.S. CPI inflation data on Tuesday. The U.S. currency fell last week as recent weak jobs data and the temporary appointment of Stephen Miran as a Federal Reserve governor increased prospects of a near-term interest-rate cut. Tuesday's data, however, could give early signs of U.S. trade tariffs lifting inflation. "All eyes will be on the degree to which core goods inflation is affected by tariffs and whether these same factors could be even more pronounced in the August CPI," Pepperstone's Chris Weston says in a note. The DXY dollar index falls 0.1% to 98.09. ([email protected])0626 GMT - China's export competitiveness and growing economic links with regions such as the Middle East and Africa are structural trends that could persist, says Elke Speidel-Weiz, chief economist of emerging markets at DWS. Chinese products, especially semiconductors, ships, and autos, continue to attract eager buyers across the globe despite elevated U.S. tariffs. While the U.S. share of China's total exports has halved since 2018, emerging markets such as Vietnam and Thailand have become important destinations for Chinese goods, she says in a note. However, the addition of transshipment clauses in trade agreements could pose risks. Vietnam, a key re-export hub, has already come under U.S. scrutiny, with new provisions targeting Chinese-origin components. If more countries or trade blocs adopt similar measures, China's workaround strategies could face headwinds, she says. ([email protected])0417 GMT - China's deflationary pressures are expected to persist into 2H, according to Barclays analysts in a research note. July CPI narrowly avoided falling into deflation, while PPI was weaker than expected, the analysts say. The government's efforts to reduce excess production capacity is easing price pressures in autos and a range of traditional and high-tech segments, they point out. However, overall price levels remain subdued due to insufficient demand, they note. PPI is set to stay in deflationary territory in 2H, they note. ([email protected])0410 GMT - Australia's property market has lost a little steam. Across all capital cities, 1,584 homes were taken to auction last week, 16.2% lower relative to the same week a year earlier, says property research group Cotality. And after reaching a 12-month high at the end of July of 74.7%, successful sales at auction have eased with the combined capital's preliminary clearance rate coming in at 71.7% last week. Still, the auction sales rate has held above the 70% mark for nine weeks running, Cotality adds. ([email protected]; X @JamesGlynnWSJ)0358 GMT - Malaysia stands to benefit modestly from China's policy to reduce excessive competition and stabilize prices in sectors like e-commerce, electric vehicles, solar and building material sectors, UOB Kay Hian analysts say in a note. This move may support Malaysian exporters to China and firms with Chinese subsidiaries by improving pricing power, they say. However, importers of Chinese products, especially solar companies, could face higher costs as supply tightens, they warn. While commodity exporters like Press Metal Aluminium may gain from potential price rises, the auto sector could remain weighed by weak regional demand, they add.([email protected])