Bitcoin Rises After Rally in Tech Stocks, U.S.-Vietnam Deal — Market Talk

0716 GMT - Bitcoin rises after a rally in U.S. tech stocks and a trade agreement between the U.S. and Vietnam. Gains in major tech stocks lifted the S&P 500 and Nasdaq composite to fresh records on Wednesday. President Trump said the agreement with Vietnam will charge 20% tariffs on imports from the south-east Asian country, down from the 46% levy announced in April. The deal raises hopes the U.S. is about to announce multiple trade deals before the pause in reciprocal tariffs against trading partners ends on July 9, Deutsche Bank analysts say in a note. Bitcoin rises 0.2% to $109,423 after hitting a three-week high of $109,813 late Wednesday, according to LSEG. ([email protected])0715 GMT - Only 16% of market participants believe the Federal Reserve is completely independent, Deutsche Bank Research's Jim Reid says in a global financial market survey. One quarter of respondents think the political pressure will lead to lower rates, the head of global economics and thematic research says, referring to President Trump's repeated comments on monetary policy. Meanwhile, 58% believe it will have a marginal influence on policy, he says. The survey was compiled based on 420 responses from around the world and was conducted between June 30 and July 2. ([email protected])0711 GMT - There has been an erosion of confidence in U.S. exceptionalism since the start of the year, but views are reasonably split going forward, Deutsche Bank Research's Jim Reid says. Confidence will resurface according to 44% of respondents, while 49% expect a slow erosion over the next few years, the head of global economics and thematic research says in the summary of a global financial market survey. Despite recent events, only 7% foresee a rapid erosion with significant outflows, the survey finds. The survey was compiled based on 420 responses from around the world and was conducted between June 30 and July 2. ([email protected])0711 GMT - Sterling recovers after losses Wednesday, when U.K. Prime Minister Keir Starmer didn't seem to confirm in parliament that Treasury chief Rachel Reeves would remain in her post. However, a spokesperson said afterward that Reeves had Starmer's full backing. The Labour government was forced to make major concessions to its welfare reforms following a rebellion within the party. The prospects of further tax hikes or additional borrowing can unsettle markets, Tradu.com analyst Nikos Tzabouras says in a note. Such loss of confidence "could spell trouble" for sterling. Sterling rises 0.1% to $1.3639 after hitting a one-week low of $1.3560 on Wednesday, according to LSEG. The euro falls 0.1% to 0.8645 pounds after reaching a two-and-a-half-month high of 0.8670 Wednesday. ([email protected])0700 GMT - The U.S. fiscal deficit might not be a major worry for markets in the next year, Deutsche Bank Research's Jim Reid says in the summary of a global financial market survey. Only 12% of participants believe the U.S. fiscal deficit will significantly influence the market in the next year, the head of global economics and thematic research says. However, this figure rises to 52% over a five-year horizon, with only 8% believing that the fiscal deficit will have no influence over that same period, the survey finds. The survey was compiled based on 420 responses from around the world and was conducted between June 30 and July 2. ([email protected])0628 GMT - The dollar trades steady as investors sit on their hands ahead of the key U.S. nonfarm payrolls report. Economists in a WSJ survey expect the data at 1230 GMT to show payrolls rose 110,000 in June, slowing from May's 139,000 increase. The jobless rate is forecast to rise to 4.3% from 4.2%. This might bring growth concerns "firmly back into the spotlight" and increase pressure on the Federal Reserve to accelerate its timetable for interest-rate cuts, J.P. Morgan Asset Management's Max McKechnie says in a note. However, inflation is further away from target than employment so the Fed should maintain its cautious stance on rate cuts, he says. The DXY dollar index trades flat at 96.809. ([email protected])0623 GMT - The North Atlantic Treasury Organization's 3.5% GDP core defense spending target, if fully implemented without offsetting measures, could add $2 trillion of government debt across European member countries by 2035, S&P Global Ratings says in a note. Spending increases are likely to be gradual, though, it says. The pace of spending increases will be dictated by nations' security concerns, the size of their defense industries, fiscal concerns, electoral support and industrial absorption capacity, it says. Regarding European sovereigns, S&P Global Ratings anticipates a limited impact on these countries' credit quality over the near term "as defense spending increases are likely to be measured and slow." ([email protected])0612 GMT - German Bunds could struggle in the morning with significant volumes of government bond issuance coming from Spain and France, says Commerzbank Research's Erik Liem in a note. Eurozone bonds were sold Wednesday on the back of headwinds out of the U.K., although Bunds remain a relative outperformer versus its eurozone peers, according to Tradeweb data. The gilt selloff pushed the 10-year Bund yield 5 bps higher to 2.658% by market close and also led to a wider 10-year gilt-Bund yield spread. ([email protected])0551 GMT - U.S. Treasury yields decline in Asian afternoon trade, with coming ISM indices and labor market data potentially supporting expectations of Federal Reserve rate cuts this year. "The interest rate cut speculation is unlikely to diminish by the end of the week," say Helaba analysts in a note. The fall in yields is driven by long-dated Treasurys, causing the curve to flatten after the previous day's steepening. The two-year Treasury yield declines 1.7 basis points to 3.771%; the 10-year Treasury yield drops 2.6 basis points to 4.266% and the 30-year Treasury yield falls 3.2 basis points to 4.790%, according to LSEG. ([email protected])0515 GMT - Malaysia's central bank may keep its benchmark interest rate at 3% at the July meeting, FSMOne Research assistant manager Kevin Khaw Khai Sheng says in a press briefing. While recent macroeconomic data points to some weakness, he says they aren't having a "very critical" impact on the overall economy yet. If Bank Negara does cut rates next week, it would be more of an "insurance" move, he says. Khaw expects a 25bp rate cut later in 2H, likely during the September or November policy meetings. ([email protected])0417 GMT - With tariffs on Asian exports to the U.S. coming hard and fast, shipments could fall in the coming months and companies may curb investment amid the uncertainty, says HSBC Global Research. Growth is stuck in low gear in mainland China, and tension in the Middle East adds another risk through a possible spike in the price of oil, which Asia imports in large amounts, says Chief Asia Economist Frederic Neumann. Outside of Japan, where policy normalization remains the objective, central banks are expected to lower interest rates further, helped by a weaker U.S. dollar, he says. With external headwinds strengthening, all eyes are on the Asian shopper to put a floor under growth. "The hope remains that households could pick up some of the slack," he says. ([email protected])0335 GMT - AUD/USD's upward momentum is starting to increase after it rebounded sharply from a low of 0.6373, says Quek Ser Leang of UOB Global Economics & Markets Research in a note. The currency pair is trading not far below a channel top, which is presently at 0.6595 on the daily chart, the senior technical strategist notes. If AUD/USD were to break and hold above 0.6595, it could potentially extend gains toward 0.6685, the strategist says. However, a break below support at 0.6480 would nullify the currency pair's upside potential, the strategist adds. AUD/USD is 0.2% lower at 0.6572. ([email protected])