Bitcoin Could Resume Downtrend After Recent Rebound — Market Talk

1024 GMT - Bitcoin's recent rebound could prove limited and temporary, ING technical analyst Roelof-Jan van den Akker says in a note. The cryptocurrency rose to a two-week high of $64,539 overnight, rebounding from the 21-month month low of $57,775 reached July 1, according to LSEG. It last trades down 0.8% at $63,329. Bitcoin's appreciation potential looks capped around the important resistance zone between the horizontal barrier at $65,670 and the flat exponential moving average-200 line, currently at $68,603, he says. ING expects a resumption of bitcoin's previous downtrend with a break below the July 1 low in the near-term and towards $47,705. "Investors should also be mindful of the implications of a weekly close below the crucial horizontal support level at $54,450," he says. (renae.dyer@wsj.com)

1021 GMT - Taiwan is likely to raise rates if inflation stays sticky, according to ING in a research note. The island's CPI rose to a 17-month high of 2.6% year over year in June amid a broad-based uptick in inflation, ING points out. "This level looks likely to be at or near the peak for the year, given the fall in energy prices and more favorable base effects in the coming months," it says. There will be a higher chance of a rate increase in the third quarter if inflation stays high, CE says. (tracy.qu@wsj.com)

1020 GMT - U.S. Treasury yields rise and the dollar edges up gher amid fresh tensions in the Middle East and higher oil prices. "Renewed tensions in the Strait of Hormuz, with a ship being attacked, sent oil prices higher and kept traders on watch for further developments," Empire FX's Crispus Nyaga says in a note. A re-escalation in tensions could support the dollar through safe-haven demand and raise concerns over inflationary pressure from higher energy costs, the analyst says. Meanwhile, the Federal Reserve's minutes of the June meeting, due Wednesday, could shape near-term expectations for both currency and bond markets, Nyaga says. The 10-year Treasury yield rises 1.4 basis points to 4.492%, according to Tradeweb. The DXY dollar index rises 0.1% to 100.971. (emese.bartha@wsj.com)

1017 GMT - Sterling continues to trade near a one-year high against the euro while gilt yields stay higher, little moved after the Bank of England published its Financial Stability Report. The report said the U.K. financial system has remained resilient and continued to support the real economy despite Middle East developments. However, vulnerabilities remain in risky assets, sovereign debt markets and risky credit markets. The Financial Conduct Authority and Prudential Regulation Authority are reviewing measures such as removing the countercyclical leverage buffer from banks' leverage requirements and reducing the leverage ratio Tier 1 minimum requirements from 3.25% to 3%. The euro falls 0.1% to 0.8537 pounds after hitting a low of 0.8531 earlier. The 10-year gilt yield is up 2.9 basis points at 4.814%, Tradeweb data show. (renae.dyer@wsj.com)

0955 GMT - The rapid expansion of data centers in India could have significant broader macroeconomic effects, Shilan Shah of Capital Economics writes in a note. Much of the discourse regarding the impact of AI on India's economy has focused on disruption to the services sector, but AI still requires a large amount of physical infrastructure investments, Shah says. While announced data-center investments over 2026-2030 is equivalent to only 0.5% of annual GDP, the impact could be much larger if it proves to be a catalyst for policymakers to upgrade India's power system and water sources, Shah adds. Demand for domestic capabilities in electronics and precision engineering will also help India move up the manufacturing value chain, Shah says. (kimberley.kao@wsj.com)

0937 GMT - German industrial data point to broad-based strength in the first two months of the second quarter, despite the jump in energy prices due to the Iran war, Pantheon Macroeconomics' Claus Vistesen says in a note. Industrial production climbed 0.9% on month in May, after a 0.2% increase in April. That puts German manufacturing on track for a decent second quarter, and signals upside risk to GDP growth, he says. Survey data has softened in recent months, with the manufacturing PMI and the IFO recent production index subdued in May and June. "But we still think that production rose over the second quarter as a whole," Vistesen says. (edward.frankl@wsj.com)

0900 GMT - The prospect of large-scale interventions to support the Japanese yen poses a major risk for the dollar, ING's Francesco Pesole says in a note. The dollar versus the yen continues to go its own way, regardless of dollar swings, and is close to 162 yen despite a brief correction lower after last week's weak U.S. nonfarm payrolls data prompted markets to trim Federal Reserve interest-rate rise expectations, he says. "Failing to intervene below 163.0 could fuel speculation [that] the new line in the sand is closer to 165." The dollar falls 0.1% to last trade at 161.92 yen. (renae.dyer@wsj.com)

0859 GMT - A Paris appeals court ruling on whether to allow Marine Le Pen to run for office has great implications for French politics but probably won't have much impact on the euro, ING's Francesco Pesole says in a note. The court will rule Tuesday on Le Pen's attempt to overturn a ban on holding elected office for embezzling European parliament funds. A reversal of the ban could strengthen her far-right National Rally party and shift expectations towards a Le Pen candidacy over Jordan Bardella, Pesole says. However, markets have largely priced in a Le Pen or Bardella win and "either would deliver sufficient fiscal prudence to limit bond volatility." The euro last trades down 0.1% at $1.1427. (renae.dyer@wsj.com)

0844 GMT - The Philippines's near-term inflation outlook faces risks including El Niño-related supply disruptions and peso volatility, UOB economists say in a note. Prolonged dry weather could affect agricultural production and raise food prices, especially for rice and vegetables. "Such supply-side pressures typically persist for several quarters and could delay the pace of disinflation," UOB writes. El Niño's impact would be felt more strongly on headline inflation, given that food accounts for a significant portion of the CPI basket. That makes it a key risk factor even as energy prices ease. Still, UOB lowers its 2026 inflation forecast for the Philippines to 6.0% from 7.5% due to factors including the sharper-than-expected easing in headline inflation over the past two months. (amanda.lee@wsj.com)

0828 GMT - Central banks in Asia are unlikely to rush to unwind recent rate hikes, given rising El Nino risks to food inflation, Capital Economics' Gareth Leather says in a note. Central banks responded aggressively to the earlier surge in energy prices, with many hiking interest rates at least once. While the subsequent decline in energy prices has reduced the urgency for central banks to further tighten policy, El Nino conditions could keep them cautious. The impact from El Nino could be more significant than the energy shock, as food carries a larger weight in Asian consumer price baskets than energy. Capital Economics continues to expect India, Pakistan and South Korea to further tighten monetary policy over the coming months. (amanda.lee@wsj.com)

0826 GMT - Sterling could receive an indirect boost from the U.K. government bond market following the upcoming Bank of England Financial Stability Report, ING's Chris Turner says in a note. "In focus will be whether the BOE removes gilts from its Leverage Exposure Measure, against which banks have to hold 3.25% of Tier 1 capital." This could increase domestic demand for gilts, reduce government borrowing and loosen financial conditions, he says. If delivered, the euro could fall towards 0.8500 pounds, Turner says. The report is due at 0930 GMT. The euro falls 0.1% to a one-year low of 0.8537 pounds, LSEG data show. Gilt yields trade higher, with the 10-year yield up 2.1 basis points at 4.807%, Tradeweb data show. (renae.dyer@wsj.com)

0812 GMT - Despite surging energy prices from the Middle East conflict, German industrial production is proving resilient, ING's Carsten Brzeski says in a note. Industrial output rose 0.9% on month in May, from 0.2% in April. Some sectors seem to have benefited from the war, as Asian competitors were hit harder by the closure of the Strait of Hormuz, Brzeski says. Automotive production rose 3.6% on month, the data shows. The opening of the Strait, as well as easing geopolitical tensions, should help the German economy and move past recession fears, he says. "However, it won't be a huge boost but rather a mild tailwind. Despite some improvement, production expectations in industry remain weak, and order books are only very gradually filling up again." (edward.frankl@wsj.com)