Bitcoin Turns Higher Again Ahead of Possible U.S. Legislation — Market Talk

0849 GMT - Bitcoin prices turn higher, last trading up 1.8% at $118,581, according to LSEG. The crypto currency jumped to a record high of $123,153 on Monday before dropping back on profit-taking. However, crypto investors are looking ahead to possible U.S. legislation that will lay plans to regulate for crypto assets. In what is dubbed 'Crypto Week,' the House of Representatives are considering three bills to overhaul U.S. crypto policy. This could pave the way for even greater institutional adoption and further bitcoin gains, says Hina Sattar Joshi at TP ICAP Digital Assets in a note. "Bitcoin's role as digital gold within portfolios is only getting stronger," she says. ([email protected])0845 GMT - The trade deal announced by Trump looks positive for Indonesian equities, says Jen-Ai Chua, equity analyst at Julius Baer. Under the outlined terms, Indonesian goods face a U.S. tariff of 19%. The lower rate vis-à-vis Vietnam, its key competitor in the garment and footwear space, which has been subject to a 20% tariff, is a win, she says. Indonesia's expected purchases of U.S. energy and agricultural products as well as 50 Boeing jets are set to close the trade deficit with America for one year, says Chua. Julius Baer remains overweight on Indonesian equities, liking their attractive valuations and structural growth drivers in terms of abundant natural resources and a young, increasingly wealthy population. The trade news should boost sentiment and stock-market momentum in the short run. Jakarta's benchmark index was last 0.9% higher. ([email protected])0833 GMT - The Bank of England's adjustments to MREL--the minimum amount of capital and specific debt a bank must hold--could result in an earnings uplift for Metro Bank and OSB Group, Keefe, Bruyette & Woods says. The BoE raised the threshold to 25 billion-40 billion pounds as expected. The commitment to index MREL to future GDP growth was positive, analysts Edward Firth and Elise Yu Ge write in a note. They also noted the clarification that banks in the range could be subject to either transfer or bail-in resolution, in case of failure, was also positive. The removal of the MREL debt requirement could reduce both bank's funding costs and add around 10% to their respective pro-forma earnings, they add. ([email protected])0831 GMT - The euro's rally against the U.S. dollar has at least another 9% to go, Morgan Stanley analysts say in a note. The euro has risen more than 12% so far this year but the next phase of gains "could be just as big--if not bigger," they say. "We think the biggest risk is missing out on the next leg [of euro gains]." They expect that investors hedging their dollar holdings will play a "starring role" in the next phase of euro gains. The euro is last up 0.2% at $1.1620. It hit its highest in nearly four years at $1.1829 at the start of this month, LSEG data show. ([email protected])0822 GMT - The dollar edges lower, reversing some of its strong gains after data showed U.S. annual CPI inflation picked up to 2.7% in June, from 2.4% in May. Stretched short dollar positions could have caused a "slightly outsized" bounce higher in the U.S. currency following the data, ING's Francesco Pesole says in a note. This could explain Wednesday's slight fall. However, ING expects the dollar could still rise from here. The strong inflation data could make it hard to justify an interest-rate cut by the Federal Reserve in September, he says. The DXY dollar index falls 0.1% to 98.514. It hit a three-week high of 98.699 on Tuesday. ([email protected])0812 GMT - The proposals in the U.K. government's freshly published Financial Services Growth Strategy 2035 look unexciting from a banking perspective, Keefe, Bruyette & Woods says in a research note. They are heavily weighted towards process and administration rather than fundamental change, analysts Edward Firth and Elise Yu Ge write. The proposals are unlikely to change the damage to growth and competition done from the regulator's focus on financial stability in recent years, they say. Changes that would shift momentum require a level of radicalism that seems to be lacking, they note. ([email protected])0803 GMT - The unexpected rise in U.K. inflation in June shouldn't jeopardize an August rate cut from the Bank of England, Deutsche Bank's Sanjay Raja says in a note. There's enough of a slowdown in the labor market and the economy to continue the bank's "gradual and careful" monetary-policy stance, he says. Still, the data won't give policymakers any sense of comfort on the inflation side, with headline, core, services and core-goods inflation all above bank staff forecasts, he says. Indeed, Thursday's data on the labor market might hold more weight than the inflation statistics when it comes to shaping the monetary-policy outlook. "The onus now rests on the labor market to shape how far and how fast the [BOE] can cut this year and next," Raja says. ([email protected])0756 GMT - UBS expects the dollar to remain under pressure into 2026, strategists Constantin Bolz and Dominic Schnider say in a note. The euro remains the preferred alternative to the dollar, "supported by the more frontloaded German fiscal boost and the likely end of the European Central Bank easing cycle," they say. UBS forecasts the euro will continue to trade between $1.15 and $1.20 in the second half of 2025 before rising to a range between $1.20 and $1.25 range in 2026. The euro last trades up 0.1% at $1.1613. UBS favors buying euros at levels around $1.15. ([email protected])0745 GMT - Yields on U.K. government bonds rise following stronger-than-expected U.K. inflation data, taking the benchmark 10-year yield to a five-week high. Annual CPI inflation climbed to 3.6% in June from 3.4% in May, above the consensus forecast by economists in a WSJ poll of 3.4%. The Bank of England could keep interest rates on hold in August if U.K. data continue to show elevated price pressures and a stable labor market, Berenberg's Andrew Wishart says in a note. "It seems that weakness in the labor market has so far failed to quell domestic price pressures," he says. The 10-year gilt yield rises to a high of 4.660% after the data, Tradeweb data show. ([email protected])0745 GMT - China's economy isn't out of the woods and more stimulus is needed, say economists at BofA Securities in a research note. Despite the strong GDP print, BofA remains cautious on near-term growth momentum, given China's growing reliance on external demand. "In our view, the need to step up policy stimulus has become more urgent," the economists say. Stimulus to boost investment demand and support the labor and property market will be needed, they say. ([email protected])0743 GMT - USD/SGD's rebound is approaching resistance at the 55-day exponential moving average, which is now at 1.2900, says Quek Ser Leang of UOB's Global Economics & Markets Research in a report. A break and close above this resistance level would increase the likelihood of the currency pair forming a bottom at 1.2698, the senior technical strategist says. However, given USD/SGD's sharp decline since April, any advance is probably part of a corrective rebound rather than a major reversal. Also, the presence of a thick Ichimoku cloud on the daily chart could slow the pace of further gains, the strategist adds. USD/SGD is little changed at 1.2849. ([email protected])0716 GMT - The Bank of England will likely cut interest rates further, despite an unexpected rise in U.K. annual price inflation, Ruth Gregory at Capital Economics writes in a note. Data showed annual CPI inflation rose to 3.6% in June from 3.4% in May, confounding the expectations of economists polled by The Wall Street Journal for an unchanged reading. This was largely due to a surge in oil prices causing higher petrol-pump prices. Still, weakness in the British economy will keep the BOE on a path of quarterly rate cuts, Gregory says. "The risk is that this increase proves more persistent and rates are cut more slowly than we expect, or not as far," she says. ([email protected]; @joshualeokirby)