Bitcoin's Rally Stalls as it Faces Long-Term Resistance — Market Talk

0925 GMT - Bitcoin eases after recent gains driven by optimism over U.S. regulatory milestones. Bitcoin has posted strong monthly gains but now faces significant long-term resistance around levels of $123,000 to $125,000, IG analyst Tony Sycamore says in a note. "Adding to caution, three large wallets have sold approximately $11 billion worth of bitcoin over the past week, potentially limiting further upside momentum," he says. With bitcoin hitting resistance levels and altcoins performing strongly, rotation into alternative cryptocurrencies appears likely, he says. Bitcoin falls 1.1% to $118,453, having risen 10% this month and reaching a record high of $123,153 last Monday, LSEG data show. (renae.dyer@wsj.com)

0908 GMT - The cost of insuring euro-denominated credit against default using credit default swaps falls on optimism about the prospects of the European Union reaching a trade deal with the U.S. before the tariffs deadline on August 1. This comes after the U.S. and Japan agreed a trade deal. "News of a trade agreement between the U.S. and Japan is fostering optimism among investors that further deals might be reached before punishing tariffs come into force," AJ Bell's Russ Mould says in a note. The iTraxx Europe Crossover index which tracks euro junk bond CDS, declines 4 basis points to 276 basis points, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)

0907 GMT - China's July Politburo meeting should shed some light on government efforts to rebalance supply and demand, HSBC economists say in a research note. The meeting could focus on structural measures to promote long-term sustainable growth, such as around capacity adjustments and the new urbanization model. To reduce excess competition in certain sectors, China should build a legal framework that encourages fair competition via market-based anchors, monitoring and centralized enforcement to minimize interference by local governments, they say. The upcoming Politburo meeting could also accelerate existing policies on urbanization and property, given renewed weakness in the property sector, they add. (sherry.qin@wsj.com)

0905 GMT - The Chinese yuan could end the year lower against the dollar as the negative economic impact of tariffs materializes, Commerzbank analysts say in a note. "We think that the People's Bank of China probably prefers a slightly weaker yuan in a trade war situation." However, the yuan could recover next year as the dollar is likely to fall more than previously expected, they say. The Federal Reserve will be unable to escape increasing political pressure to cut interest rates. This could result in sharper rate cuts than previously anticipated. Commerzbank expects the dollar to rise to 7.30 yuan by the end of 2025 before falling back to 7.10 by end-2026. The dollar last trades down 0.2% at 7.1615 yuan. (renae.dyer@wsj.com)

0843 GMT - Eurozone government bond yields rise as risk appetite improves following a trade deal between the U.S. and Japan. German Bunds lead a rise in 10-year eurozone bond yields, increasing by 3.5 basis points to 2.622%, according to Tradeweb. The key focus for eurozone bond investors this week is the European Central Bank's meeting Thursday, where it's expected to keep interest rates on hold. Money markets are pricing just one more rate cut for this year, LSEG data show. (emese.bartha@wsj.com)

0820 GMT - Sterling recovers after losses against the euro in the previous session but it remains at risk of renewed falls given the U.K.'s precarious fiscal position, Monex Europe analysts say in a note. "We expect recurrent bouts of concern over the public finances to chip away at the pound, especially as the Autumn Budget draws closer." There is speculation that Treasury chief Rachel Reeves will need to raise taxes in the upcoming budget to plug a hole in the public finances. Data on Tuesday showed U.K. government borrowing rose by more than expected to 20.7 billion pounds in June. The euro falls 0.2% to 0.8667 pounds after hitting a nearly one-week high of 0.8693 pounds Tuesday, LSEG data show. (renae.dyer@wsj.com)

0803 GMT - Increased bets on the euro strengthening against the dollar in the options market look justified given the threat to the Federal Reserve's independence, Commerzbank's Thu Lan Nguyen says in a note. Three-month euro-dollar risk reversals show the skew towards call options, or bets on the exchange rate rising, have reached a near six-week high, according to LSEG. U.S. Treasury Secretary Scott Bessent on Monday called for a review of the Fed's operations. His comments come amid repeated calls from President Trump to lower interest rates. This "should raise concerns" as it seems the Trump administration is looking for a loophole to put the Fed under stronger government oversight, Nguyen says. (renae.dyer@wsj.com)

0754 GMT - Yields on U.K. government bonds rise, tracking similar moves in global sovereign bond yields after a poor performance at an auction of 40-year Japanese government bonds. The 40-year Japanese bond yielded 3.375% at the auction, the highest level on record, and had the weakest demand since 2011, driving all Japanese government bond yields higher, Deutsche Bank Research analysts say in a note. The rise has cascaded across global sovereign bond markets, the analysts say. Ten-year U.K. government bond yields climb 4 basis points to last trade at 4.612%, Tradeweb data show. (miriam.mukuru@wsj.com)

0738 GMT - Car companies are among the top gainers in European stocks, after a U.S.-Japan trade deal lifted investor sentiment on the sector. Sweden's Volvo Car is the top riser among European auto stocks, climbing more than 10%, followed by Porsche AG with a 6.9% gain. Jeep maker Stellantis rises 5.5% and Volkswagen is up 5%. German luxury-car makers Mercedes-Benz and BMW rise 5.2% and 4.7%, respectively. Renault's stock gains lag behind those of its peers, up 2.7%, after the French automaker issued a sales update. The Stoxx Europe 600 Automobiles & Parts index is up 3.5%, while the broader Stoxx Europe 600 rises 0.9%. (adria.calatayud@wsj.com)

0737 GMT - The euro's recent gains against the dollar reflect a shift from U.S. assets into the eurozone, ING analyst Chris Turner says in a note. "We suspect that euro-dollar demand is related to the ongoing rotation out of assets in the equity, government bond and credit space." Global investors are showing keener interest in euro-denominated products in the credit space. The euro trades steady at $1.1749 after hitting a two-week high of $1.1760 Tuesday, LSEG data show. (renae.dyer@wsj.com)

0731 GMT - European stocks open higher, tracking gains in Asia, after a trade agreement between the U.S. and Japan fueled investors' hopes. The pan-European Stoxx Europe 600 is up 1%, while the narrower Euro Stoxx 50 climbs 1.1%. Among national indexes, Switzerland's SMI, France's CAC 40 and Italy's FTSE MIB lead the gains, all rising more than 1%. The U.K.'s FTSE 100 moves 0.4% higher, having closed at a record level Tuesday. The gains across European markets follow optimism in Asia, as U.S. trade deals with Japan and the Philippines lifted sentiment across the region, IG analysts say in a market comment. (adria.calatayud@wsj.com)

0722 GMT - China's exports could maintain moderate growth this year barring additional shocks, ING chief economist Lynn Song says in a research note. China's biggest export outperformers over the past year have been ships, semiconductors, and autos. These products made up just 1%-2% of China's total exports to the U.S. in 2024, Song says. China's exports to the U.S. have been stickier than expected despite tariffs being raised to 145% in April, he says. Exports should continue to be a growth contributor this year, helping China stay on track to reach its around 5% growth target. However, the number of countries signing "anti-China" trade clauses with the U.S. could be a downside risk to China's export growth, he adds. (sherry.qin@wsj.com)