Bitcoin's Recent Rally Could Extend Further — Market Talk

0920 ET - Bitcoin's recent rally could have further to go, TP ICAP's digital assets director Hina Joshi says. Financial institutions expect the Federal Reserve will resume interest-rate cuts later this year and this will benefit risky assets like bitcoin, she says. The market is pricing in nearly two rate cuts by year-end, LSEG data show. A rise in crypto treasuries and bitcoin-backed corporate strategies could also boost bitcoin, along with increased sovereign adoption, she says. Bitcoin falls 2.6% to $117,150, according to LSEG data. It reached a record high of $123,153 on Monday. ([email protected])0913 ET - Canada's inflation report for June likely seals another hold from the Bank of Canada at its July 30 rate-policy decision, CIBC Capital Markets says. Headline inflation accelerated to 1.9%, while the central bank's preferred gauges of core CPI remain too elevated for the BOC's liking, at 3% or higher. June's CPI report, along with a surprisingly solid jobs data, means the BOC will remain on pause, CIBC says. "This is a central that by its own admission isn't very comfortable being forward-looking," the firm says, adding that by the fall BOC officials might have a clearer picture about the fallout from US tariffs. The White House has given Canada until Aug. 1 to negotiate a deal that resolves the current trade row. ([email protected]; @paulvieira)0912 ET - Canada's latest inflation numbers may do little to convince the market the central bank will feel any urgency to resume cutting interest rates. Annual inflation heated up to an as-expected 1.9% in June after holding at 1.7% the month before, though that marks three straight months below the Bank of Canada's 2% target. The driver was a softer decline in gasoline prices for the month, alongside faster price growth for vehicles and some other durable goods. What may catch the attention of central bank officials is possible stickiness in their preferred measures of underlying inflation, with trim and median averaging 3.05% on-year for June against 3.0% in May. ([email protected]; @RobbMStewart)0909 ET - The dollar swings widely after June inflation accelerated as expected, amid signs that tariffs are boosting consumer prices. The price of some items the U.S. typically imports accelerated. Household furnishings, for example, accelerated to 1% from 0.3% in May. The numbers support the case for interest rates to remain elevated, potentially bolstering the greenback. "Tariff-related inflation is beginning to creep into the system, proving the wait and see attitude of the Fed right," Spartan's Peter Cardillo writes. The WSJ Dollar Index fell on the data release but bounced back and is now flat. The dollar strengthens 0.1% versus the yen and weakens 0.1% against the euro. ([email protected]; @ptrevisani)0906 ET - The cost of rent went up by 0.2% in June, down from 0.4% in April and 0.3% in May, per the Labor Department. Rent increases have been gradually trending lower over the past three years, a huge boon to overall calmer inflation because rent is roughly 35% of the overall consumer-price index. Granted, most of this month's improvement came from a decline in hotel prices. But residential rents were, at worst, steady at fairly modest levels. Owners' equivalent rent, the subcategory that estimates housing costs for people who own a home, increased 0.3%, the same as in May. Rent of primary residence, the category for people who rent a dwelling, increased by 0.2%, flat from May. ([email protected]; @mattgrossman)0904 ET - Some prices for discretionary services that reflect the consumer economy fell in June, a trend economists have been watching as evidence that the consumer economy is slowing. Airline fares fell a further 0.1% last month, after dropping by 2.8% in April and 2.7% in May, according to the Labor Department. Rates for hotel and motel rooms were down by 3.6% in the month, after declining in April and May as well. ([email protected]; @mattgrossman)0853 ET - June inflation accelerates as expected and investors buy up Treasurys, sending yields lower. The 12-month consumer price index increases 2.7%, compared to May's 2.4% pace. The core reading was 2.9%, up from 2.8%. The Fed targets 2% inflation. The producer price gauge is due tomorrow and expected to accelerate. Investors are scrutinizing inflation data for signs of any impact from tariffs. June's result bolster the case for a Fed hold, but the lack of an upward surprise could ease fears of an even more hawkish stance. Yields were steady to higher ahead of the data and fell afterward. The 10-year is at 4.422% and the two-year at 3.912%. ([email protected]; @ptrevisani)0848 ET - Inflation accelerated in June for some products with heavy exposure to foreign supply chains. The price of recreation commodities was up by 0.8% last month, according to the Labor Department, accelerating from 0.4 in April and May. Household-furnishings prices were up by 1%, after rising by 0.2% in April and 0.3% in May. Apparel prices climbed 0.4%, after clothing got cheaper over the prior two months. Economists have been watching categories like these for signs of tariff impact. ([email protected]; @mattgrossman)0842 ET - Widespread adoption of bitcoin is still a long way off, Hargreaves Lansdown's Matt Britzman says, following the cryptocurrency's recent surge to record highs. The key risk is volatility, he says. "Until trading becomes more stable, its use as a mainstream store of wealth will always come into question." There is also the prospect of geopolitical flare-ups weighing on cryptocurrencies as risky assets. Other risks include the potential for large holders of bitcoins, known as bitcoin whales, to offload the asset, as well as regulatory uncertainties. Bitcoin falls 2.3% to $117,417 after reaching an all-time high of $123,153 Monday, according to LSEG. ([email protected])0839 ET - The market's poor perception of Amundi due to its exposure to macroeconomic uncertainty has vanished, AlphaValue says in a research note. The French asset manager's stock has outperformed the Stoxx 600 index since the start of the year, the analysts write. This shift is explained by the group's internal resilience, which has been boosted by its positive earnings track record in an abnormal market environment and the progress it has made on its strategic initiatives, the analysts write. The increasing strategic importance of European asset management also contributed, given that the industry is increasingly called upon to act as a transmission channel to pool savings in order to finance needed investments across the continent, they note. ([email protected])0830 ET - Europe's exporters will struggle to make up for lost U.S. demand as higher tariffs push up prices, Oxford Economics' Matthew Swannell writes in a research report. President Trump has threatened to slap EU imports with entry duties as high as 30%, part of his plan to redress his country's trade deficits with major partners and shore up domestic manufacture. The U.S. is the largest outside market for the EU, and is vital for key export sectors such as cars and drugs, Swannell notes. "This will make it difficult for Europe to switch to other markets," he warns. ([email protected]; @joshualeokirby))0824 ET - Sterling rises after U.K. Treasury chief Rachel Reeves announced a string of financial sector reforms to boost investment and economic growth. The measures include reforming ringfencing rules that require U.K. banks separate their retail and investment banking activities. The announcement reaffirms the importance of the U.K.'s financial sector in driving economic growth, EY's Martina Keane says in a note. It outlines a "positive vision to streamline regulation, boost opportunities for retail investors, modernise capital markets, and attract foreign investment." The euro falls 0.1% to 0.8674 pounds after earlier hitting a three-month high of 0.8696, LSEG data show. Sterling rises 0.1% to $1.3443 after reaching a three-week low of $1.3418 overnight. ([email protected])