Stablecoin Market Cap Retracts in June — Market Talk

1038 ET - The market capitalization for stablecoins fell 2.4% to $312 billion in June, according to analysts from CoinDesk. That's a $7.7 billion decline for the month, and makes it the largest drop the stablecoin market has seen since May 2022--when the TerraUSD stablecoin lost its $1 peg and collapsed, with a value of 0.005 cents as of today. The decline in capitalization last month coincided with an 18% drop in bitcoin. June also saw multiple stablecoins get depegged from the USD, CoinDesk adds. Cryptocurrencies are down today, with bitcoin off 1.2% to $63,053, ethereum down 1.3% to $1,769, and XRP 2.1% lower to $1.11. (kirk.maltais@wsj.com)

1025 ET - A further widening of Canada's goods-trade surplus to a four-year high isn't as good as it first looks, since exports in volume terms were essentially unchanged, says Capital Economics' Ariane Curtis. She believes the only positive is that the rise in import volumes for May suggests domestic demand is gradually improving. Curtis adds the trade data look to be consistent with the flash estimate of a modest 0.1% on-month rise in GDP for May. (robb.stewart@wsj.com; @RobbMStewart)

1020 ET - Canada has clearly snapped out of its two-quarter GDP funk with net trade roaring back to life, in part due to higher oil prices, says Robert Kavcic, economist at BMO Capital Markets. Based on Statistics Canada's trade report for May, exports rose 0.9%--and a solid 26% from a year ago. Energy sales account for the bulk of the increase, Kavcic says. Volumes were weak in May, but nevertheless Kavcic estimates net trade will "add meaningfully" to 2Q growth, of up to 2.0 percentage points. (paul.vieira@wsj.com; @paulvieira)

1019 ET - The Polish zloty faces further underperformance versus the Czech koruna due to an unfavorable monetary policy divergence, RBC Capital Markets foreign exchange strategist Daria Parkhomenko says. Recent Polish inflation data were lower than expected, providing scope for the country's central bank to cut interest rates at some point, she says. In contrast, the Czech National Bank raised rates in June. While CNB messaging suggests the move is a one-off, its divergence with Poland means there is a "relative value play" where the zloty falls against the koruna, she says. The zloty rises 0.2% to 5.6389 koruna, having reached a two-and-a-half-year low of 5.6145 Monday, LSEG data show. (renae.dyer@wsj.com)

1014 ET - May data suggests that net trade is going to be a positive contributor for Canada GDP growth in 2Q, says Andrew Grantham, economist at CIBC Capital Markets. Exports rose 0.9% on a nominal basis in May, whereas imports fell 0.2%, leading to a C$4.24 billion trade surplus. Certainty on the trade front was dealt a blow last week with the Trump administration opting against renewing USMCA. Still, Grantham says the pact remains in place, allowing the bulk of US-bound exports to be exempt from tariffs. "This should help maintain higher export volumes relative to a year ago," Grantham says. (paul.vieira@wsj.com; @paulvieira)

1000 ET - Despite a court reducing Marine Le Pen's ban from holding public office, making her eligible to run in France's 2027 presidential election, is remains uncertain if she will become her party's nominee, Holger Schmieding says in a note. The court upheld Le Pen's conviction for embezzling EU funds, saying she must wear a monitoring bracelet for a year--a condition under which she previously suggested she might not run. "We thus have to wait for her reaction to the verdict," Schmieding says, expecting news by 1800 GMT when Le Pen is scheduled to appear on TV. If she doesn't run, her protege Jordan Bardella would likely be the National Rally candidate, who is more popular with the public and holds a less hardline position against the EU, Schmieding adds.(don.forbes@wsj.com)

0937 ET - Treasurys sell off, sending yields higher, as oil prices tick up following Iran's attack on ships near Hormuz. The U.S. trade deficit widens in May, to $77.6 billion from April's revised $54.6 billion. In a week relatively light on economic indicators, markets await Fed minutes tomorrow. The WSJ Dollar Index is flat, as the greenback weakens slightly against the Japanese yen. The 10-year yield is at 4.495%, up from yesterday's settle of 4.479%. The two-year rises to 4.139% from 4.124%. (paulo.trevisani@wsj.com; @ptrevisani)

0936 ET - An acceleration in Bank of Japan interest-rate rises wouldn't necessarily lead to a meaningful recovery of the yen on its own, Rabobank's Jane Foley says in a note. While a hasted pace of rate rises would be yen supportive, investors remain worried about the Japanese government's fiscal intentions, she says. "More reassuring messages on this front are likely to be needed before the yen can demonstrate a convincing turnaround," Foley says. Prime Minister Sanae Takaichi has attempted to make reassurances about bond supply but she is perceived to favor expansionary fiscal policy which has contributed to the yen's weakness. The dollar falls 0.1% to 161.86 yen, having reached a 40-year high of 162.83 on July 1, LSEG data show. (renae.dyer@wsj.com)

0922 ET - New York Fed President John Williams reiterates his view that monetary policy is well positioned to achieve the Fed's dual mandate goals in an interview on Fox Business. Regarding the labor market, he says he sees stable, solid growth. While acknowledging inflation is still too high, he says "I do feel a little bit more positive about the near-term inflation outlook because of the energy price declines that we're going to see."(jessica.coacci@wsj.com)

0911 ET - The cost of insuring euro credit against default edges higher as technology stocks sell off following Samsung's earnings report and oil prices rise. Energy prices gain after Iran's Revolutionary Guard fired at two commercial ships near the Strait of Hormuz, adding to risk-averse sentiment in markets. Still, CDS prices remain at relatively low levels, buoyed as an easing in Middle East tensions has caused oil prices to drop well below peaks hit around two months ago. The iTraxx Europe Crossover index of euro high-yield credit default swaps rises 1 basis point to 241 basis points, S&P Global Market Intelligence data show. The iTraxx Europe Main index of euro investment-grade CDS climbs 1 basis point to 52 basis points. (jessica.fleetham@wsj.com)

0658 ET - The ongoing build-up of investor bets on a weaker Japanese yen highlights the potential for the currency to recover when the tide turns but this looks unlikely in the near term, MUFG Bank's Lee Hardman says in a note. "There is currently no clear catalyst to trigger a stronger yen." Investor unease over fiscal policy has increased after Japan's government unveiled a new multiyear investment framework. This adds pressure on the yen, which was already hit by higher energy prices and the Federal Reserve recently signaling potential interest rate rises, he says. Further interventions by Japanese authorities to support the yen might not reverse the weakening trend, he says. The dollar falls 0.1% to 161.88 yen. (renae.dyer@wsj.com)

0639 ET - UBS expects the 10-year French OAT-German Bund yield spread to settle in a 65-75 basis point range in the next two months, tightening from around 79 basis points currently. Immediate fiscal risks seem constrained and risk sentiment is doing the heavy lifting now, says strategist Reinout De Bock in a note. UBS broadly expects spreads to trade in relatively tight ranges. (emese.bartha@wsj.com)