Ethereum Lower as Investors Look for Price Bottom — Market Talk

1024 ET - Ethereum, the second-largest cryptocurrency by trading volume and market capitalization behind bitcoin, has been losing value relative to bitcoin for a little more than a year. "The question for investors is whether ETH is now cheap enough to mark a durable bottom--the precondition for ETH outperformance and, historically, for a broader altcoin season," says analysts with CryptoQuant in a note. Ethereum is now trading at $1,900, which is off nearly 20% from its average cost basis of just above $2,300, says CryptoQuant. But the firm notes that institutional investors appear to be moving more money into ethereum ETFs, and other signs appear to suggest that a price bottom may hit soon. Ethereum is down 1.4%, while bitcoin falls 1.5% to $64,875. ([email protected])1010 ET - Fewer apartments are sitting empty, rents are climbing, and yet the deals keep coming, Zillow says. The typical U.S. asking rent rose to $1,965, up 2.2% compared to a year ago, and nearly 2 in 5 rental listings came with a concession attached. A concession is a move-in discount, commonly a free month's rent, waived fees or free parking. For renters who land a freebie, the real cost of renting can be softer than the asking price suggests. The 2.2% annual rent growth in June is a slight acceleration from the previous month. Yet the increase in concessions-39.7% of rental listings on Zillow offered one in June, up from 35.2% a year ago--softens the blow for renters. The backdrop is a rental market that has added significant new inventory over the past few years, giving renters more choices.([email protected])1003 ET - While European Central Bank President Christine Lagarde dodged all questions about what policymakers are likely to decide in September, the bank is clearly worrying about upside risks to inflation, Pantheon Macroeconomics' Claus Vistesen says in a note. After the decision to hold rates steady, Lagarde acknowledged the uncertainty surrounding the path of energy prices since the June staff projections, he says. That reveals that the decision will to a large extent depend on the trajectory of oil prices and conditions in the Middle East. That points to a quarter-point rate increase in September as the ECB's inflation forecasts will remain well above the prewar path, supporting a shift in policy towards the upper end of neutral, Vistesen says. ([email protected])1002 ET - U.S. pending home sales fell 1.3% week-over-week, Redfin says. That's the lowest level in three months. The decline in homebuying demand comes as weekly average mortgage rates rise to a 11-month high of 6.55%. Also, home prices are stubbornly high, sitting just about $900 shy of their all-time peak. The buyers who are in the market have more leverage than they've had in years, says Redfin. Homes that have been sitting on the market for longer than a few weeks often come with room to negotiate on price and seller concessions. But desirable, move-in ready homes can still be competitive because many people don't want to take on renovation costs while mortgage payments are high. ([email protected])0957 ET - Sterling could weaken later this year as the U.K. fiscal situation remains tense and the Bank of England is unlikely to raise interest rates, Commerzbank's Michael Pfister says in a note. New U.K. Prime Minister Andy Burnham must achieve the "virtually impossible" task of implementing growth-friendly policies without placing greater strain on the budget, he says. Fiscal risks are likely to rise again from September ahead of the next budget, he says. Meanwhile, rate cuts are more likely than rate rises if the U.S.-Iran conflict is over by the end of September and the labor market remains weak, he says. Commerzbank expects the euro to rise to 0.88 pounds by December from 0.8531 currently. ([email protected])0948 ET - The European Central Bank signalled the possibility of a rate increase in the coming months during Thursday's decision, MFS Investment Management's Peter Goves says in a note. The ECB kept rates unchanged at 2.25% but said that the full impact of the energy shock from the Middle East conflict is yet to surface. ECB President Christine Lagarde said the decision was unanimous, although some governors wondered whether a rate hike should be considered. Traders are pricing in a 71% chance of a quarter-point ECB rate rise in September and are fully pricing this move by October, LSEG data show. ([email protected])0943 ET - Oil prices and Treasury yields are rising ahead of next week's Federal Reserve meeting. The Fed, which was once navigating the appropriate time to possibly lower interest rates, is now increasingly focused on more inflation risks, such as higher energy prices and demand driven by artificial intelligence investment. Oil prices are climbing back to $100 a barrel as President Trump says the U.S. would hold Iran responsible for future attacks by Houthi militants after the group fired on two Saudi tankers in the Red Sea. Investors are pricing in the possibility that the Fed may need to raise rates in the future. The 10-year yield reaches its highest intraday level since January 2025. Still, according to the CME's FedWatch tool, only 35.8% of investors expect the Fed to raise rates next week.([email protected])0942 ET - The euro is unlikely to fall much further after the European Central Bank left interest rates unchanged Thursday, says Petros Pantzari at broker Monaxa in a note. By holding rates steady, the ECB is signalling that the energy price shock hasn't yet fully passed through to broader prices, he says. "The euro may initially struggle to rally because there was no fresh [rate] hike, but downside should remain contained as [ECB President Christine] Lagarde preserves the option to tighten again." The euro falls to a three-week low of $1.1367 after the ECB's announcement, according to LSEG. ([email protected])0932 ET - If energy prices remain at the current elevated levels, the European Central Bank is likely to increase interest rates in September, Aberdeen Investments' Felix Feather says in a note. "An energy cost shock of that magnitude would be too great for the ECB to look through," he says. The ECB voted to keep interest rates on hold at 2.25% at Thursday's rate decision and said it would follow a data-dependent approach at future meetings. ([email protected])0927 ET - The European Central Bank is unlikely to raise interest rates again this year, says Brian Coulton at Fitch Ratings in a note. The central bank unsurprisingly kept rates on hold Thursday, and the key to where it goes next will be whether there are any signs of second-round inflation effects from higher energy prices, he says. "The recent volatility in oil prices is unlikely to have had a major impact on the ECB's interest rate deliberations." But knock-on effects seem unlikely as nominal wage growth remains low and unit profit growth has been in steep decline since 2023, Coulton says. "The risk of a significant rise in domestically-generated inflation looks quite low and we do not foresee any more interest rate hikes this year, he says. ([email protected])0921 ET - Bitcoin stays under pressure as the U.S.-Iran conflict and concerns about artificial intelligence spending weigh. The ongoing Iran war pushes oil prices higher, boosting expectations for U.S. interest-rate rises. Alphabet and Tesla both reported negative free cash flow for the second quarter and expect higher capital expenditures, fueling AI spending fears. Meanwhile, Republicans on Wednesday released an updated U.S. Clarity Act which aims to establish a regulatory framework for digital assets. Under the new proposals, presidents and federal officials would be banned from issuing or sponsoring cryptocurrencies. Bitcoin falls 1.2% to $65,107, LSEG data show. ([email protected])0919 ET - Markets might be overestimating how much the European Central Bank will raise interest rates, UBS Global Wealth Management's Dean Turner says in a note. As a result, UBS GWM continue to favour high-quality eurozone bonds, particularly in short- and medium-dated maturities, he says. "Markets currently appear to be pricing a more aggressive path for ECB rates than we expect," the chief eurozone and U.K. economist says. Unless energy prices retreat meaningfully, the ECB is likely to resume its tightening cycle at its September meeting before moving to a more prolonged pause, Turner says. ([email protected])