Bitcoin Falls as U.S.-Iran Stalemate Weighs — Market Talk

0702 GMT - Bitcoin falls as an ongoing stalemate in the U.S.-Iran conflict lifts oil prices and reduces demand for risky assets. U.S. Defense Secretary Pete Hegseth told reporters Thursday the U.S. could maintain its blockade of Iranian ports indefinitely because the U.S. can rotate ships in and out. "Our concern still remains that there is no easy way out of the current crisis," Jefferies economist Mohit Kumar says in a note. Iran won't give up control over the Strait of Hormuz and the U.S. won't accept Iran charging tolls through the shipping route, he says. Iran has time on its side and has a higher tolerance of economic pain, he says. Bitcoin falls 0.4% to $63,140, LSEG data show. ([email protected])0654 GMT - The dollar falls as recent U.S. data dampen the prospect of the Federal Reserve raising interest rates while Treasury yields rise as oil prices gain. Last week's weak labor market data combined with this week's subdued consumer and wholesale inflation data have prompted markets to trim U.S. rate-hike bets. Oil prices rise after the U.S. threatened to maintain a naval blockade of Iran indefinitely. Meanwhile, an auction of 30-year Treasurys on Thursday resulted in the highest yield since 2001, highlighting U.S. fiscal concerns. The DXY dollar index falls 0.1% to 99.854. The 30-year Treasury yield rises 1.7 basis points to 5.228% while the 10-year equivalent rises 1.8 basis points to 4.659%, Tradeweb data show. ([email protected])0634 GMT - Thailand's economy likely expanded 1.9% on year in 2Q, slower than 1Q's 2.8% growth, according to the median estimate of five economists polled by The Wall Street Journal. Private consumption was likely boosted from the ongoing government co-payment scheme, ANZ Research's Kausani Basak says in a report. Government expenditure also rebounded in 2Q from a recovery in regular spending and faster growth in capital expenditure. However, the contribution from net exports likely softened during the quarter amid a steady rise in real imports, she says. The data are due Monday. ([email protected])0513 GMT - Japan's plan to cut the food consumption tax will enlarge the fiscal deficit and push up JGB yields, Oxford Economics says. Modelling suggests the cut will reduce annual tax revenue by around 5.0 trillion yen, which will be tough to recoup, economist Norihiro Yamaguchi writes. While part of the losses will be financed by non-tax revenues and expense cuts, OE assumes half will be financed by debt. It expects the primary deficit to deteriorate to 3% of GDP, before improving from 2029 as higher debt-to-GDP prompts consolidation. OE sees long-term JGB yields rising to around 3% by end-2026, instead of remaining at 2.8%. Bond market reaction has been limited, but OE thinks markets will start to price the fiscal effects as more details emerge. ([email protected])0423 GMT - Singapore's non-oil domestic exports likely rose 26.50% in July, accelerating from June's 20.7%, according to the median estimate of five economists polled by The Wall Street Journal. Export growth should continue to be led by electronics shipments, supported by robust artificial intelligence-related demand for memory chips and server-related products, DBS economists say in a report. Non-electronics exports likely rebounded amid favorable base effects, although petrochemical shipments are expected to have stayed weak due to ongoing disruptions in the Strait of Hormuz, they add. The data are due Monday.([email protected])0403 GMT - Bitcoin edges lower midway through the Asian session, giving up earlier gains after U.S. data overnight tempered expectations for an imminent rate increase. Bitcoin continues to struggle to hold ground as markets' risk appetite is tested by fluctuating developments in the Middle East and repricing of rate path views. For Sandeep Pyapali, founder and CEO of Mesta, the latest PPI and jobless claims numbers sent a clean dovish signal of cooling inflation plus a softening labor market. But that doesn't seem to have buoyed crypto much, defying hopes of a risk-on rally and pointing to a lack of demand as structural headwinds like ETF outflows persist. Bitcoin is 0.1% lower at $63,330, so far failing to reclaim the $64,000 level. ([email protected])0220 GMT - The Singapore dollar consolidates against its U.S. counterpart amid mixed developments. "Softer-than-expected U.S. PPI saw Fed hike expectations pared further and Treasury yields eased," strategists at OCBC say in a research report. However, the greenback showed "little follow-through to the downside," they say. "Geopolitical uncertainty may be partly tempering appetite to chase the USD lower," the strategists add. The U.S. dollar is flat at 1.2803 Singapore dollars, LSEG data show. ([email protected])0158 GMT - The yen is unlikely underperforming against other currencies, RBC Capital Markets' Abbas Keshvani says in an email. "Thanks to the latest intervention, the yen has not been an underperformer over the last month," the director of Asia macro strategy says. "It is still stronger against Japan's trading partners," Keshvani says. "Another way to illustrate relative performance of the yen is via the EUR/JPY cross, which is well below the 187 level where authorities intervened the last two rounds," Keshvani adds. The dollar is little changed at 159.44 yen and the euro is flat at 183.94 yen, LSEG data show. ([email protected])0103 GMT - South Korea's tax revenue is expected to increase meaningfully through 2029 on strong semiconductor exports, Barclays's Bum Ki Son says. The economist forecasts higher corporate income tax payments by local chip makers to generate additional tax revenue of 35 trillion won in 2026, 95 trillion won in 2027, 120 trillion won in 2028 and 60 trillion won in 2029. That would reduce the government's need to issue debt to fund its spending, Son notes. He expects gross treasury bond issuance to fall to 186 trillion won in 2027 from 223 trillion won in 2026. But fiscal conditions could deteriorate from 2029 onward, he adds. ([email protected])0012 GMT - Japanese stocks are higher in early trade as fears about the Fed's potential rate increases ease. Electronics and tech stocks are leading the gains. Panasonic Holdings is up 4.5% and SoftBank Group is 5.3% higher. The dollar is at 159.46 yen, compared with Y159.39 as of Thursday's Tokyo stock market close. Investors are closely watching any developments in the Iran conflict and crude oil prices. The Nikkei Stock Average is up 1.8% at 69523.56. ([email protected]; @kosakunarioka)0012 GMT - The yen consolidates against other G-10 and Asian currencies but may be buoyed by prospects of BOJ rate increase. There's a media report that the "Takaichi government is supportive of a near-term interest-rate hike by the Bank of Japan," CBA's Carol Kong says in a research report. "Prime Minister Takaichi's preference of lower interest rates is widely considered to be a constraint on the pace of BoJ rate hikes," the economist and currency strategist says. "The market is currently pricing about a 70% chance of a 25bps BOJ rate hike at the September meeting," Kong adds. The dollar is little changed at 159.48 yen and the euro is flat at 183.96 yen, FactSet data show. ([email protected])0005 GMT - JGBs rise in the morning Tokyo session, tracking overnight price gains in U.S. Treasurys. Both JGBs and Treasurys tend to move in tandem. "U.S. July PPI was soft," NAB's Ken Crompton says in commentary. U.S. PPI was flat in July versus the WSJ's consensus forecast for a 0.2% increase. The data were enough to "knock [September] Fed hike odds back under 40%," the head of Rates Strategy says. "In rates, yields are lower across the major sovereign markets," Crompton says. The 10-year JGB yield is down 2.5 bps at 2.845%. ([email protected])