1344 ET - Major cryptocurrencies are edging higher as bitcoin pushes back above the $60k mark. Focus among crypto investors is squarely on next steps for Michael Saylor's bitcoin-accumulation methods--with the bitcoin downturn enough to put Strategy Inc.'s bitcoin treasury underwater by roughly $10B to $15B. Today, Strategy announced that it might sell bitcoin to raise up to $1.25B in cash to help bolster its ability to pay dividends on its preferred-stock STRC. With that and $2.55B in cash, Saylor says Strategy can cover its STRC dividends for nearly 26 months. Strategy currently holds 847,363 BTC, worth over $50B. (kirk.maltais@wsj.com)
1222 ET - Uncertainty about the future of the U.S.-Mexico-Canada trade pact will continue to cast a pall over the Canadian economy and lead to slower-than-anticipated growth in 2026, Capital Economics says. Trade uncertainty and lower immigration intake is expected to slow growth this year to 0.5%, CapEcon says. The firm projectsgrowth to pick up steam over the next year although cautioning USMCA uncertainty remains a major wildcard. U.S. withdrawal from USMCA looks unlikely given advanced talks with Mexico. "But there is still a risk that talks drag on" for longer than a year, the firm says. That could further delay a rebound in business investment, and a boost to exports following some tariff relief, CapEcon says. (paul.vieira@wsj.com; @paulvieira)
1212 ET - The U.S. Supreme Court's ruling blocking President Trump from firing Fed governor Cook "offers some comfort with respect to Fed independence," Ameriprise's Russell Price says. The court rules that the president can fire officials at independent agencies at will, except for central bankers. The decision "is a win for market sentiment," Price says. He warns, however, that the issue of Fed independence is "likely to remain a simmering background concern until proven otherwise." Treasury yields are little changed since the Supreme Court announcement, with the 10-year trading at 4.378%.(paulo.trevisani@wsj.com; @ptrevisani)
1204 ET - Long-term Treasury yields are likely to fall in the near future, while the front end of the curve remains elevated, Bank of America's Meghan Swiber and Eleanor Xiao write. They say investors who had bet on a back-end selloff, which would take long-term yields higher, are losing money. That makes them prone to unwind their short positions, which would increase demand for long-term bonds and weigh on yields. "Foreign demand stays soft, reinforcing a split demand backdrop," Swiber and Xiao say. They see "a tactical tension but not a strategic shift," and stay short two-year Treasurys. (paulo.trevisani@wsj.com; @ptrevisani)
1156 ET - While geopolitics remains important, the bigger market driver in the second half of the year might be monetary policy, Columbia Threadneedle Investments' Anthony Willis says in a note. In the U.S., the economy remains resilient and the Federal Reserve has adopted a more hawkish tone, the senior economist says. "As investors reassess whether the Fed may need to raise rates again--and how often--market pricing is likely to remain sensitive to incoming data and central bank communication," he says. (emese.bartha@wsj.com)
1136 ET - Heatwaves pose a new downside risk to European growth, ING's Carsten Brzeski says in a note. Germany, France and the U.K. among others experienced their hottest days on record for June in the last week. A 2021 study of Europe's worst heat years put GDP losses from reduced labor productivity alone at 0.3%-0.5%, exceeding 1% in the most exposed regions, Brzeski says. Add rising healthcare costs, emergency infrastructure repairs and the impact of heatwaves on waterways, transportation or agriculture, the economic hit increases further. For northern European countries like Germany, infrastructure, housing stock and sectors like construction and logistics were built for a cooler climate and haven't adapted to the new reality. "Thermometers, it turns out, have become a leading indicator of economic growth," Brzeski adds. (edward.frankl@wsj.com)
1120 ET - Bitcoin is back below $60,000 as investors guess what data coming soon will mean for the economy and appetite for risk-on assets like bitcoin and other cryptocurrencies. "For the week ahead the focus will be on whether the data justifies Warsh's hawkish posture, particularly the jobs report on Thursday and the ISM Manufacturing survey on Wednesday," says Stephen Coltman of 21shares in a note. Focus is also being put on the activities of bitcoin treasury firm Strategy, with company head Michael Saylor expected to do an interview this week that may disclose the company's next steps - including if it plans on selling any more of its huge bitcoin stockpiles to fund operations. (kirk.maltais@wsj.com)
1120 ET - The U.K. is not the only major economy facing fiscal risks, Capital Economics' Vicky Redwood says in a note. Several other major economies such as the U.S., France, and Italy "face challenging fiscal positions and upcoming political events that could trigger renewed bond market volatility," she says. Recent bond market reactions indicate that investors are more responsive to fiscal credibility than they are to debt levels alone, Redwood says. (miriam.mukuru@wsj.com)
1052 ET - Robinhood Markets' prediction markets business is gaining momentum with volumes accelerating over the past week, putting the metric on track to land nearly 40% ahead of analysts' estimate for the second quarter, Truist Securities analysts say in a note. Prediction revenue could see even greater upside than just applying Wall Street's take rate to the volume upside given the World Cup is likely driving considerable volume, the analysts say. Such contracts are tradable on Robinhood's own Rothera exchange, where it does not share revenue with third-party exchanges, they say. All in, Robinhood is on pace for its best trading month ever in June for equities, options and prediction markets, making for a "hat trick, unassisted by crypto," they say. (kelly.cloonan@wsj.com)
1038 ET - Concerns about U.K. fiscal policies could weigh on long-dated gilts, hindering their yields from falling considerably, eToro global market analyst Lale Akoner says. Investors are keen to find out the detailed fiscal and economic policies of the incoming government, after Keir Starmer's resignation from the prime minister role. "Speculation over who replaces Rachel Reeves at the Treasury adds another layer of uncertainty," Akoner says. Gilt investors could demand more compensation for fiscal risk, keeping long-dated gilt yields fairly high, she says. U.K. 30-year gilt yields last trade at 5.433%, higher than the German 30-year Bund yields at 3.416%, Tradeweb data show. (miriam.mukuru@wsj.com)
1033 ET - The Supreme Court has rejected President Trump's attempt to fire Federal Reserve board member Lisa Cook. The decision preserves her position and is widely seen as reinforcing the Federal Reserve's independence. In a 5-4 decision, the Court upheld the lower courts' rulings that Cook could continue serving at the central bank as her legal case challenging the termination moves forward. "The Government has not shown that it is likely to prevail on the legal arguments advanced in its stay application," the Court said. Cook launched her legal battle on Aug. 28 after Trump attempted to remove her from the Fed amid allegations she made false claims on mortgage documents in 2021 that may have secured her more favorable loan terms. (patrick.sheridan@wsj.com)
1012 ET - Japanese authorities seem to be refraining from further interventions to curb the yen's weakness, XM analyst Achilleas Georgolopoulos says as the yen falls to a near two-year low against the dollar. The yen is weaker after the Japanese government published its draft economic blueprint urging the Bank of Japan to align its monetary policy decisions with the government's growth agenda, he says. This implies "low interest rates and a very gradual exit from the current accommodative stance." The dollar rises to as high as 161.96 yen, according to LSEG. If it rises above 161.99, it would reach the highest levels in nearly 40 years. (renae.dyer@wsj.com)