Bitcoin Rises After S&P 500, Nasdaq Reach Record Highs — Market Talk
0731 GMT - Bitcoin rises to a two-and-half-week high after the S&P 500 and Nasdaq reached record highs overnight. U.S. stocks were boosted by a rally in Oracle's shares after the database-software giant said that it won several billion-dollar artificial intelligence deals in its latest quarter. Lower-than-expected U.S. wholesale price data also lifted shares as it strengthened the case for the Federal Reserve to cut interest rates at the September 17 meeting. Attention now turns to U.S. inflation data at 1230 GMT for further clues on the likely pace of future rate cuts. Bitcoin rises to a high of $114,452, LSEG data show. ([email protected])0701 GMT - Eurozone government bond yields start the day with marginal moves as investors await a European Central Bank decision and U.S. CPI inflation data. The ECB is set to keep its policy rates steady and will likely only change economic forecasts moderately if at all. "We think the ECB is on hold now for the foreseeable future and its policy rate will remain at 2%," say analysts at RBC Capital Markets in a note. The ECB is unlikely to materially change its guidance and will likely want to keep its options open, they say. Ten-year eurozone bond yields move within a 0.5 basis-point range. The 10-year Bund yield trades steady at 2.657%, according to Tradeweb data. ([email protected])0659 GMT - The U.S. CPI inflation report at 1230 GMT is more likely to trigger a reaction in the euro-dollar exchange rate than the European Central Bank's decision at 1215 GMT, TD Securities strategists say in a note. The ECB looks set to keep the deposit rate unchanged at 2.0% as widely expected, they say. It could state that uncertainty is reduced after the U.S.-EU trade agreement but continue to cite a meeting-by-meeting, data-dependent approach to future decisions, they say. "U.S. CPI will be a bigger driver of foreign exchange, where we are cautious of dollar strength on a stronger report and signs of inflation passthrough," the TD strategists say. The euro trades flat at $1.1692.([email protected])0644 GMT - The dollar rises modestly against a basket of currencies ahead of data that are expected to show U.S. inflation accelerated in August. Economists in a WSJ survey expect inflation to rise to an annual rate of 2.9% in August from 2.7% in July. There's a risk that inflation is higher than expected and much still suggests that the Federal Reserve will deliver a 25 basis-point interest-rate cut on September 17 and not a larger 50 basis-point reduction, Commerzbank's Michael Pfister says in a note. The euro could continue trading in a fairly narrow range of $1.16-$1.18, he says. The euro trades flat at $1.1693. The DXY dollar index rises 0.1% to 97.895. ([email protected])0638 GMT - The 10-year U.S. Treasury yield is anticipated to test 4% and likely break below it, ING rates strategists Benjamin Schroeder and Padhraic Garvey say in a note. However, a fall below that level could be considered as excessive, they say. "We also view any such move as an overshoot to the downside." The strategists maintain the view that the neutral level for the 10-year Treasury yield is in the 4.24%-4.50% area. "The current inflation environment...suggests we should or could trend back up there," they say. In addition, the still elevated fiscal deficit argues for that too, they say. The 10-year U.S. Treasury yield is up 2.5 basis points at 4.056%, according to Tradeweb. ([email protected])0634 GMT - The lower-than-exected U.S. PPI data doesn't move the needle for the FOMC at all, with a 25bp cut next Wednesday still nailed on, says Michael Brown, senior research strategist at Pepperstone. Money markets price in a modest chance of a 50 bp move, and that pricing could ramp up further if CPI data is cool as well, he adds. But given upside price risks from tariffs, and uncertainty over exactly how restrictive the current policy stance is, the Fed remains on track to resume the easing cycle with a more modest move at the September meeting, he adds. ([email protected]; @JamesGlynnWSJ)0623 GMT - The European Central Bank's decision and press conference could be a nonevent for market pricing, Citi's Jamie Searle and Aman Bansal say in a note. "The ECB is highly likely to hold and offer little steer over the policy outlook, repeating the 'deliberately uninformative' approach from July," the rates strategists say. Spillovers from U.S. CPI data at 1230 GMT and implications on the Federal Reserve being "arguably more important," they say. The ECB is all but certain to keep the policy rates unchanged and analysts expect little if any revisions in the quarterly staff forecasts on inflation and GDP. "The staff projections are likely to reinforce that the default position is to hold unless forced into action," Citi strategists say. ([email protected])0559 GMT - The European Central Bank is set to keep its policy rates on hold, but ING rates strategists see room for two-year German government bond yields to fall. "Downside risks from (geo)politics continue to loom in the background," they say in a note. Besides, part of the reasoning is that at 10 basis points above the ECB's risk-free benchmark euro short-term rate, or ESTR, the two-year German Schatz is at the top end of the range this year, they say. On Thursday, the two-year Schatz yield closed at 1.955%, according to LSEG data. ( [email protected] )0553 GMT - The European Central Bank is set to keep its policy rates on hold, but ING rates strategists see room for two-year German government bond yields to fall. "Downside risks from (geo)politics continue to loom in the background," they say in a note. Besides, part of the reasoning is that at 10 basis points above the risk-free ESTR overnight indexed rate, the two-year German Schatz is at the top end of the range this year, they say. On Thursday, the two-year Schatz yield closed at 1.955%, according to LSEG data. ([email protected] )0543 GMT - U.S. Treasury yields trade higher in Asian trade, with investors awaiting consumer price inflation data, even as they might not provide much of a guidance for the Federal Reserve's meeting next week. "Last month's U.S. CPI figures stand as the calendar highlight, though again seem unlikely to move the needle either in terms of what the Federal Reserve will do next week, or beyond that," says Pepperstone's Michael Brown in a note. A WSJ survey of analysts tips the headline year-on-year inflation at 2.9% in August versus 2.7% in July, while the year-on-year core inflation is expected to be unchanged at 3.1%. The two-year Treasury yield rises 1.1 basis points to 3.543% and the 10-year Treasury yield is up 2.1 basis points at 4.052%, according to Tradeweb. ([email protected])0543 GMT - Australia's property market is surging, with property auctions jumping. Caitlin Fono, research analyst at Cotality, says there are currently 2,436 capital city homes scheduled for auction this week, up 14.8% on the 2,122 held last week. This time last year, 2,457 homes were taken to auction across the combined capitals. She says auction activity is expected to rise further next week, with more than 2,600 homes currently scheduled to go under the hammer across the combined capitals. With further interest rate cuts still being talked about by the Reserve Bank of Australia, the fire under the market looks set to grow more intense. ([email protected]; X @JamesGlynnWSJ)0430 GMT - Fintech deal activity in the 12 months to the end of June remained high, according to a new report compiled by law firm White & Case. This as companies search for inorganic growth amid fragile fundraising markets and sponsors focus on profitability over customer acquisition and marketing. "What has been lost in fundraising appetite has been more than compensated for in consolidation activity. Those fintechs which embrace the drive for profitability will pull through to exit," says partner Hyder Jumabhoy. In the second half of 2024 and the first half of 2025, more than 70 acquisitions of smaller rivals or complementary businesses were reported, which was 50% higher than the previous 12-month period while the number of strategic partnerships inked doubled to more than 50. M&A activity is expected to speed up further as the fintech ecosystem matures, White & Case analysis shows. ([email protected])