Bitcoin Faces Potential Corrective Phase as Rally Loses Steam — Market Talk

1108 GMT - Bitcoin is at risk of a downward correction in the near term as the cryptocurrency's recent rally pauses, ING analyst Roelof-Jan van den Akker says in a note. Bitcoin is last down 1.2% at $85,901 after reaching $87,315 Monday, its highest level since late January, according to LSEG. While bitcoin has risen above the $82,805 resistance level this week, daily momentum indicators have failed to register new highs, he says. A weekly close below $82,805 would increase the risk that a short-term peak is forming and raise the likelihood of a downward corrective phase in the weeks ahead, he says. ([email protected])1052 GMT - U.S. diesel prices continue to reach new highs, hitting a fresh record Tuesday as curtailed Russian exports and prolonged disruptions to crude flows in the Strait of Hormuz squeeze global supplies. The national average price of diesel rose to a record of $6.527 a gallon, according to the American Automobile Association, up sharply from $3.688 a gallon a year ago. According to a Bloomberg report, Russia is set to extend a ban on most diesel exports that was introduced earlier this year due to continued Ukrainian attacks on its refineries. "The diesel market is likely to face a challenging winter if the situation in the Middle East does not ease and Russia's ban on diesel exports remains in place for even longer," says Carsten Fritsch from Commerzbank. ([email protected])1044 GMT - Mounting U.K. public borrowing complicates the government's efforts to maintain fiscal credibility, eToro's Lale Akoner says in a note. Data shows U.K. public borrowing stood at 18.3 billion pounds ($24.46 billion) in August, around 20% above borrowing in August 2025. Investors await the budget on October 28 for signs on whether the government can lower borrowing without hurting economic growth, Akoner says. "Weaker public finances can then make investors demand higher gilt yields, which in turn raises the cost of servicing the debt." ([email protected])1031 GMT - Further signals about additional U.S. interest rate rises from Federal Reserve officials are likely needed in coming weeks for the dollar to defend recent gains, Commerzbank's Antje Praefcke says in a note. Restrictive words, ideally delivered in unison by all Fed members on a regular basis, are key to avoid raising doubts about the Fed's credibility, she says. Given little economic data in the near term, such communication is crucial. "Since the market has already priced in significant interest rate hikes (75 basis points till July 2027), these expectations must be kept running in order to avoid losses in the dollar." The DXY dollar index falls 0.1% to 100.374 after earlier reaching a seven-week high of 100.667. ([email protected])1020 GMT - Europe must not remain just a spectator of this week's meeting of Presidents Trump and Xi, Volker Treier of the German Chamber of Commerce and Industry says. "When Washington and Beijing negotiate trade, raw materials, and key technologies, the German economy is directly impacted," he says. Progress in export controls imposed by China and the U.S. is particularly important, given continuing restrictions on critical raw materials, semiconductors, and key technologies, Treier says. "Further tightening could seriously affect German companies." In particular, rare earths and magnets show how vulnerable European supply chains are due to high dependencies, he notes. ([email protected])1017 GMT - Yields on U.K. government bonds, or gilts, fall as oil prices decline following a media report that Iran offered to reopen the Strait of Hormuz. According to Japan-based Kyodo News, Iran said it would reopen the oil shipping lane if the U.S. takes the first steps toward easing military pressure. The news caused the Brent crude price to fall 2.2% to $98.14 a barrel, calming inflation concerns. Ten-year gilt yields fall 3 basis points to last trade at 5.172%, a two-week low, LSEG data show. ([email protected])0944 GMT - The euro is at risk of falling further given the prospect of the European Central Bank keeping interest rates unchanged in October, ING's Francesco Pesole says in a note. ECB officials have so far kept an October rate hike firmly on the table. "Even so, investors appear increasingly willing to embrace the opposite narrative, pointing to further near-term downside pressure on euro-dollar," he says. Meanwhile, the euro's short-term fair value based on ING's 60-day model dropped below $1.15 for the first time since late July. ING sees the euro potentially falling below June lows of around $1.1320-$1.1330 in the near term. The euro falls 0.1% to $1.1456 after earlier reaching a seven-week low of $1.1433, according to LSEG. ([email protected])0914 GMT - The dollar briefly hits a seven-week high against a basket of currencies before paring gains as oil prices swing. Crude prices turn lower after Japan's Kyodo News said Iran offered to reopen the Strait of Hormuz within seven days if the U.S. takes steps toward easing military pressure. An earlier rise in oil prices, which reflected continuing shipping risks, had lifted the dollar due to the U.S.'s position as a net oil exporter and the currency's safe-haven role. Meanwhile, markets are betting on further U.S. interest-rate rises after the Federal Reserve raised rates by a quarter point last week and signaled further moves. The DXY dollar index rises 0.1% to 100.514 after reaching as high as 100.667 earlier. ([email protected])0853 GMT - The flattening of the U.S. Treasury curve after last week's "decidedly hawkish" Federal Reserve interest-rate decision suggests that stronger Fed credibility is containing long-end yields, Julius Baer's Afonso Borges says in a note. This supports Julius Baer's preference for intermediate duration, the fixed-income analyst says. "In contrast to the typical post-GFC [global financial crisis] hike, last week's decision was not dovish," he says. Curve steepeners had become favoured expressions of concern about institutional credibility, but this reversal suggests that the Fed's willingness to tighten has reduced those concerns, Borges adds. "For portfolios, this supports our overweight duration stance, concentrated in intermediate maturities." ([email protected])0841 GMT - After all the hawkish warnings from senior RBA staff over the past month, it was a member of the RBA's policy-setting board, and labor-market economist, Iain Ross, who offered a few calming words about inflation. In a speech on the job market in Melbourne, Ross said there is "no evidence" of an emerging wage-price spiral in the economy despite elevated inflation. He said wage setting is much different today than in the 1970s, when inflation saw pay packets jump. Ross stuck to the themes of the RBA's last statement on monetary policy, saying inflation will return to target gradually. ([email protected]; @JamesGlynnWSJ)0838 GMT - Sterling continues to trade in a tight range against the euro after the Bank of England held interest rates at 3.75% last week, ING's Francesco Pesole says in a note. The BOE wasn't as "hawkish" as the European Central Bank or Federal Reserve about raising rates in the future, but equally didn't push back strongly against aggressive tightening expectations, he says. Even if another oil price jump prompts the BOE to raise rates in November, it is unlikely to match rate-rise expectations, he says. The euro falls 0.1% to 0.8568 pounds and ING sees it reaching 0.87 on a potential repricing of BOE expectations. The euro has traded between 0.8550-0.8600 pounds since the start of September, Pesole says. ([email protected])0818 GMT - The renewed widening of the 10-year French OAT-German Bund yield is "suggesting investors remain reluctant to chase French risk tighter despite government efforts to reassure markets over the 2027 budget," Mizuho's Evelyne Gomez-Liechti says in a note. Mizuho continues to see 103-105 basis points as the next resistance would eurozone bond yield spreads widen again, the multiasset strategist says. The 10-year OAT-Bund yield spread widens 3.7 basis points to 104.8 bps, according to Tradeweb, close to Friday's wide of 105.5 bps. ([email protected])