Bitcoin Stays Lower as Risk Appetite Wanes — Market Talk

0830 ET - Bitcoin stays under pressure are broad-based risk appetite wanes and investors take profits after recent gains, Trade Nation analyst David Morrison says in a note. "The reversal highlights the asset class's continued sensitivity to global macro sentiment." The U.S-China announcement of a temporary reduction in tariffs Monday gave bitcoin an initial boost but it has since pulled back. It now feels as if the market is in limbo given the lack of clarity over the Trump administration's trade policies, Morrison says. This creates uncertainty over the global economic outlook, he says. Bitcoin falls 1.2% to $102,399 after hitting a three-and-a-half-month high of $105,716 on Monday, according to LSEG. ([email protected])0827 ET - Investment outflows could worsen the U.S. economic situation, besides the negative effects of tariffs, Colin Graham, head of multi-asset strategies at Robeco says in a note. "Non-U.S. investors are now questioning the required risk premium for holding U.S. assets," he says. Foreign investors are likely to shift investments from the U.S. to other regions as tariffs uncertainty continues. ([email protected])0824 ET - Eurozone industry can't expect the good times to last, says economist Bert Colijn at Dutch bank ING. Industrial output surged by 2.6% in March, capping a first quarter of rapid expansion in output, figures show Thursday. But that looks largely a result of tariff frontrunning as U.S. firms race to build up their stocks ahead of the import duties imposed by the Trump administration, Colijn says. That effect is likely to reverse as the first quarter ended, he says. "We expect weakening demand for eurozone products to be a theme again, thanks to tariffs and large economic uncertainty," Colijn says. "This means that while the manufacturing sector has seen a remarkable upturn in the first quarter, we don't think this is sustainable." ([email protected]; @joshualeokirby)0720 ET - The dollar's recent weakness looks a symptom of cross-border investor flows, Neuberger Berman strategists say in a note. "Those flows may well be related to the outlook for weaker U.S. growth, but they can also be squared with the recovery in U.S. risk assets." U.S. risk assets rise as dollar investors rotate back into equities and out of Treasuries. However, if non-dollar investors take more risk while staying out of U.S. markets, there's no flow back into dollar assets. That means U.S. equities rise but the dollar stays weaker. Neuberger Berman sees a potential further dollar fall of 3%-5% against the euro and yen this year but expects increased volatility. The DXY dollar index falls 0.2% to 100.836.([email protected])0714 ET - Michal Baranowski--Poland's deputy economy minister in-charge of convening a meeting of EU trade ministers in Brussels on Thursday--says it would be surprising if the U.S. pushed the bloc to the back of the queue in its effort to score new trade deals with other countries. "It would be surprising because we are a key partner both when it comes to trade and investment for the United States," he says, also noting that the U.S. is negotiating multiple deals simultaneously. "They are playing on multiple pianos, but some pianos are bigger than others and we are a big one, so I'm not worried about it at all," he says. ([email protected].)0630 ET - U.S. Treasurys trade marginally firmer, with yields falling 1-2 basis points across maturities, ahead of a string of data later in the day. U.S. data up for release Thursday include PPI, retail sales, weekly jobless claims and industrial production. Still, trade is now calmer, with greater focus on economics than tariff uncertainty, and Treaury yields are off their peaks since President Trump's reciprocal tariff announcement in early April, says Neuberger Berman's Erik Knutzen in a note. The two-year Treasury yield trades at 4.029%; the 10-year yield trades at 4.506% and the 30-year yield trades at 4.946%, according to LSEG data.([email protected])0623 ET - The cost of insuring euro credit against default using credit default swaps climbs as investors take caution ahead of key U.S. data including the producer price index, retail sales and weekly jobless claims due at 1230 GMT. The market optimism seen early this week following the U.S.-China trade deal has faded, Chris Beauchamp, chief market analyst at IG says in a note. "[Thursday's] PPI, initial claims data and a Powell speech are compelling reasons for risk to take a breather here," he says. The iTraxx Europe Crossover index which tracks euro junk bond credit default swaps rises 6 basis points to 305bps, S&P Global Market Intelligence data show. ([email protected])0600 ET - U.K. economic growth could only go downhill from here based on recent global uncertainty, after beating expectations with 0.7% first-quarter growth, HSBC's Simon Wells says in a note.Investment strength helped, driven by one-offs, but the second quarter may see drop-off in trade judging by the likely frontloading of exports. There will also be a hit from rising utility bills and firms' labor costs from increases in payroll taxes and the minimum wage. However, first-quarter growth is still decent, especially given falling inflation and a still-resilient labor market, Wells says. The Bank of England, which predicted 0.6% growth, will read this as reinforcing its "careful and gradual" approach to rate cuts, he says. ([email protected])0541 ET - Sterling's muted reaction to the improved U.K. economic growth data suggest a cautious interpretation of the figures, MUFG Bank's Derek Halpenny says in a note. The data showed the economy grew 0.7% in the first quarter after 0.1% growth in the previous quarter but this was driven by the volatile component of business investment, he says. "That will likely mean investors remain cautious over reading too much into the first-quarter data." Given the U.S. tariffs announced in April, the Bank of England sees the risk of weaker growth so should deliver further gradual interest rate cuts, he says. Sterling rises 0.2% to $1.3289 as the dollar weakens but falls against the euro, which is up 0.1% at 0.8433 pounds. ([email protected])0539 ET - Eurozone government bonds and the euro shrug off a downward revision in the single-currency area's GDP growth in the first quarter to 0.3% on the quarter from 0.4% in the flash estimate. The 10-year German Bund yield is unmoved by the data, continuing to trade at 2.681%, down a small 0.3 basis points, according to Tradeweb data. The euro trades up 0.3% at $1.1208, unchanged from before the data. ([email protected])0531 ET - Swiss economic growth was stronger than expected in the first three months of the year, raising the prospect that the Swiss National Bank will not take interest rates into negative territory after a likely cut to zero percent next month, Capital Economics' Adrian Prettejohn says in a note. Swiss GDP grew 0.7% in the first quarter, the fastest since the start of 2023. This wasn't due to tariff front-running as in Ireland other European nations, since SNB data showed the trade surplus narrowed in January and February, he says. However, growth will probably slow as trade uncertainty hits, though it will likely be stronger than peers. Household spending and higher real income should help as inflation cools, Prettejohn says. ([email protected])0414 ET - Bitcoin falls as the initial optimism over a U.S.-China agreement to temporarily lower tariffs fades given ongoing uncertainties. This uncertain outlook could trigger further bouts of market volatility, UBS Global Wealth Management analyst Mark Haefele says in a note. The Trump administration is preparing the groundwork for tariffs on certain products such as pharmaceuticals, critical minerals, lumber, copper, and semiconductors. These tariffs are likely to be more durable and feature fewer carve-outs and country exemptions because they are focused on strategic sectors, he says. "We estimate a 25% tariff on these sectors could raise the U.S. effective tariff rate by an additional 4 percentage points." Bitcoin falls 1.7% to $101,806, according to LSEG. ([email protected])