The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1247 ET - Treasury yields are rising alongside reports of a possible Treasury-assisted intervention in the Japanese yen. The 2-year note yield is up 0.068 percentage point to 4.295%. The 10-year yield is up 0.073 percentage point today to 4.735%. On Thursday, the Japanese yen jumped by 3% to a two-month high against the U.S. dollar, as reports surfaced about possible intervention by the Japanese government to prop up its currency. (jessica.coacci@wsj.com)
1204 ET - Major cryptocurrencies are down with the month ending and many options expiring. Investor interest is quickly turning toward what the Federal Reserve does in September. The CME's FedWatch tool is showing a 67% chance for the Fed to raise interest rates a quarter point in September, and investors are beginning to price this in. Also pressuring cryptocurrencies is the stalled-out Clarity Act in the Senate, says Julian Pineda of StoneX. "This environment of limited progress on the Clarity Act and the possibility of additional rate hikes over the coming months is pressuring demand again," says Pineda. Bitcoin falls 3.4%, while ethereum drops 3.4%, XRP is down 2.3%, and solana down 2.1%. (kirk.maltais@wsj.com)
1149 ET - According to CoinGlass data, bitcoin ETFs saw inflows of $233.1 million yesterday. That's the largest inflow in these ETFs since July 6, according to CoinGlass. Bitcoin ETFs have seen net inflows for two straight sessions, and analysts say that even though bitcoin prices look to remain rangebound, the return of ETF interest is a good sign for the future. "[It] signals that institutional investors have not abandoned the market," says Rania Gule of XS.com in a note. But Gule adds that a much-stronger showing on the ETF side is needed to break bitcoin prices out of its current trading range. Bitcoin is down 3.4% to $62,526, while ethereum falls 3.4% to $1,855. (kirk.maltais@wsj.com)
1144 ET - Bitcoin is down 3.3% to $62,616, with liquidations of long positions seeming to pick up in the past hour, according to data from CoinGlass. Some $62.2 million-worth of long positions have been liquidated in the last hour, which is a big pickup from earlier in the day. By comparison, only $1.1 million in short positions have been liquidated, says CoinGlass. Bitcoin did get a boostin reaction to the Federal Reserve's decision to leave interest rates unchanged on Wednesday, but that enthusiasm seems to have been sapped. "The near-term disagreement is now more about the timing of any hike than whether inflation has fully returned to target," says Coinbase Institutional in a note. Ethereum is down 3.2%, XRP is down 1.9%, and solana falls 2%. (kirk.maltais@wsj.com)
1131 ET - Canada's economy looks to have found ways to navigate the current cloud of uncertainty relating to trade with the U.S., says Desjardins' Royce Mendes. GDP readings for April and May and an estimate for June tally up to 3.4% annualized growth in 2Q. Oil and gas and signs of recovery in real estate and construction helped drive the expansion, though Mendes also notes some temporary boosts to activity from the nationwide census and the soccer World Cup. The economist continues to expect the Bank of Canada will remain firmly on hold for the remainder of this year. "With underlying inflation muted and the economy recovering, there's no need to alter the current policy mix." (robb.stewart@wsj.com; @RobbMStewart)
1119 ET - Market capitalization for so-called "stablecoins"--tokens typically pegged to the U.S. dollar--fell for the second-straight month, according to CoinDesk in a report. The firm says that stablecoin market cap fell 1% in July, to $308 billion. That makes it $14.5 billion stablecoin market cap shed since finding an all-time high in May, says CoinDesk. Driving the decline was $5.8 billion leaving Tether since May, with another $3.4 billion leaving USDC. However, the market cap for tokenized bond and money market funds rose 10.6% to $19.2 billion in July, even hitting a new all-time high of $19.3 billion as of July 27. Major cryptocurrencies are lower on this final trading day of July.(kirk.maltais@wsj.com)
1105 ET - The yield difference between short-dated gilts and their long-dated equivalents could widen further, Bank of America strategists say in a note. This week's BOE policy meeting indicated that there are no signs of second-order inflation effects so far, easing concerns about the prospects of rapid BOE rate increases in the coming months. Short-term gilt yields are expected to fall as markets adjust their BOE rate expectations, while long-dated gilt yields could remain elevated due to global geopolitical concerns and U.K. fiscal uncertainty. Two-year gilt yields last trade at 4.388%, while 30-year gilt yields last trade at 5.753%, Tradeweb data show. (miriam.mukuru@wsj.com)
1058 ET - Slack in Canada's economy is being absorbed but not rapidly, and progress could stall next quarter, KPMG Canada's Ali Jaffery says. Monthly GDP data points to annualized growth of more than 3% in 2Q. Jaffery says policymakers in Ottawa will be pleased with the numbers, though the economic recovery is still in its early innings and trade tensions remain elevated. The economist says the Bank of Canada won't be in any rush to raise interest rates, as there is still considerable room for non-inflationary growth. (robb.stewart@wsj.com; @RobbMStewart)
1052 ET - "Reports of my recession were greatly exaggerated," jokes Bank of Montreal's Douglas Porter after Canadian real GDP came in firmer than expected across the board. The economist notes the headline monthly result for May, upward revision for April, flash estimate for June and resulting early estimate for annualized 2Q growth were all above consensus expectations, a rarity. It also puts growth well above the 2.5% expansion for 2Q expected by the Bank of Canada, and north of the 1.55 estimate for U.S. GDP growth, Porter adds. He says it adds to evidence the economy is adapting to trade uncertainty but likely won't change the bigger picture concerns of fresh tariff threats and lofty energy prices, which should keep the Bank of Canada on hold this year. (robb.stewart@wsj.com; @RobbMStewart)
1049 ET - Canadian GDP rebounded strongly in 2Q, yet there is still excess slack in the economy, Says Oxford Economics' Michael Davenport. The economist still expects headwinds from a shrinking population, U.S. tariffs, and elevated trade and geopolitical uncertainty to cause economic momentum to slow in 2H. This, Davenport says, will reinforce the Bank of Canada's patient stance since excess slack in the economy should help prevent higher energy prices from driving a pick-up in core inflation and the need for higher interest rates. (robb.stewart@wsj.com; @RobbMStewart)
1017 ET - Canada's economy looks to have rebounded more strongly in 2Q than the Bank of Canada was anticipating, though after back-to-back weak quarters the chance of the central bank lifting interest rates this year still looks low, reckons Capital Economics' Ariane Curtis. Statistics Canada estimates industry-level GDP expanded 3.4% annualized in the latest quarter, and Curtis says GDP by expenditure may well show even stronger growth when it is released next month given net trade appears to have provided a big boost to the economy. (robb.stewart@wsj.com; @RobbMStewart)
0939 ET - Europe's private credit industry is rapidly expanding, but regulatory screening could slow the pace of growth in the near term, Societe Generale strategists say in a note. European regulators have stepped up their oversight over the direct lending sector, the strategists say. "Heightened regulatory scrutiny--while potentially supportive over the long term, particularly through Solvency II reforms--represents a near-term constraint on the pace of growth."
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