Bitcoin's Rally to Record High Brings Risks to Its Holders — Market Talk

0816 ET - Bitcoin's rise to fresh record highs brings increased risks for those who currently hold the cryptocurrency, says Rob Jardin at cybersecurity group NymVPN. "When the value of digital assets surges, so does the attention from cybercriminals looking to exploit both individual investors and platforms," he says in a note. There is typically a spike in phishing attacks, digital wallet hacks and social engineering scams during periods of heightened market activity. Details of a bitcoin investment can be published in data leaks unless necessary security measures have been taken, he says. Bitcoin rises 3.6% to $117,726 after earlier hitting an all-time high of $118,832, according to LSEG. (renae.dyer@wsj.com)

0814 ET - German stock prices do not price in the risk of weak global growth, leaving them vulnerable to falls as economic activity is projected to slow, Bank of America strategists say in a note. Germany's benchmark Dax stock index hit a record high of 24,639 points on Thursday. Stocks are "vulnerable to softer global growth momentum, especially given the high share of foreign earnings in the German index", the strategists say. BofA strategists have an underweight recommendation on German stocks. (miriam.mukuru@wsj.com)

0757 ET - The scale of Swiss franc purchases by global currency reserve managers in the first quarter was unprecedented, MUFG Bank's Derek Halpenny says in a note. International Monetary Fund data showed the franc's share of reserve currency holdings rose to 0.76% in the first quarter from 0.18% in the fourth quarter. The franc was the primary beneficiary of a substantial shift out of the Japanese yen and Australian dollar. Reserve managers could be having doubts over the performance of the safe-haven yen during periods of risk aversion while seeing the Aussie dollar as the most vulnerable to U.S. tariffs on China, he says. Given geopolitical and economic uncertainties, reserve managers now see increased benefits in franc holdings as a safe haven. (renae.dyer@wsj.com)

0732 ET - European equities fail to price in the risk of weaker growth, leaving them vulnerable to declines if economic activity slows, Bank of America equity strategists say in a note. "The market remains priced for macro resilience, but we see scope for disappointment," they say. U.S. tariffs and trade-policy uncertainty are likely to drag on economic growth in the U.S. and globally in the coming months, the strategists say. European equities could face downward pressure from weaker earnings and higher risk premium. European cyclical sector stocks risk declining more than 10% as they currently price in positive global macro-economic developments which are unlikely to materialize, they say. (miriam.mukuru@wsj.com)

0731 ET - Saudi Arabia's crude exports to China surged in June to their highest level since 2023, signaling strong demand in the world's second largest economy, says Kpler analyst Yan Rong Fong. Exports reached around 1.57 million barrels a day last month, with more supply likely to come as OPEC+ raises production, according to the data provider. "With OPEC+ slated to raise overall production by 548,000 barrels a day in August, Saudi Arabia will be in a position to release more crude to the market," the analyst says. "This increased availability is particularly relevant for China, its largest buyer, which could see even greater volumes." (giulia.petroni@wsj.com)

0655 ET - The Bank of England could slow the pace of quantitative tightening to 60 billion pounds annually from October, Bank of America rates strategists say in a note. Quantitative tightening is the process by which the BOE unwinds its holdings of U.K. government bonds acquired in previous periods of quantitative easing. The BOE's current pace of QT is 100 billion pounds in the 12 months period ending in September. The pace of QT could be slowed because the process is likely tightening monetary conditions, BofA says. (miriam.mukuru@wsj.com)

0654 ET - The International Monetary Fund's data on reserve currency holdings for the first quarter show few signs of major shift away from the dollar, Nomura analysts say in a note. The share of reserves held in dollars was little changed at 57.73%. The data cover the period before President Trump's sweeping reciprocal tariffs were announced in April but suggest the dollar's reserve status has remained healthy, the analysts say. "The dollar's share within reserves has been falling steady for a number of years but has been steady between 57% and 58% for the last few quarters." (renae.dyer@wsj.com)

0543 ET - U.S. equity volatility and U.S. credit spreads are close to their lowest levels in 2025, TD Securities Hans Mikkelsen says in a note. This demonstrates investors' current willingness to take on risk. "Theoretically credit spreads and equity volatility are two sides of the same coin, as they both measure the uncertainty of the value of a firm's assets relative to liabilities," he says. U.S. investment-grade credit spreads and the VIX index--which indicates the market's expectation of 30-day volatility of the S&P 500 stocks index--have both recovered from the high levels that followed the U.S. announcement on global tariffs on April 2. (miriam.mukuru@wsj.com)

0506 ET - India's consumer inflation is expected to have eased to 2.2% on year in June, according to the median estimate of seven economists polled by The Wall Street Journal. That compares with 2.82% for May and would mark the softest print since February 2019. ANZ Research expects a continued slowdown in inflation in June due to favorable base effects in food price inflation, offsetting higher monthly food costs. The Reserve Bank of India will likely cut rates by 25 bps again in the fourth quarter, but it could be sooner given the lower risk of a food price shock, ANZ said. The inflation data are due Monday. (kimberley.kao@wsj.com)

0503 ET - There isn't much room for the 10-year German Bund yield to decline in the coming months, driven by European Central Bank action, the Investment Institute by UniCredit's Luca Cazzulani says in a note. The ECB's interest-rate cuts are drawing to an end and markets are already pricing this in, the head of strategy says. A significant decline in 10-year yields would require more-dovish ECB expectations, which could be the result of a deterioration in sentiment, he says. Should the ECB's terminal deposit rate be 1.50%, the 10-year Bund yield could fall to 2.40%, he says. Meanwhile, expectations of a 2.00% terminal rate--meaning no further rate cuts--would be consistent with 10-year yields of around 2.80%. The 10-year Bund yield is up 1.6 basis points at 2.720%, according to Tradeweb. (emese.bartha@wsj.com)

0459 ET - The U.K. monthly GDP data for May came in weaker-than-expected, raising the possibility that the Office for Budget Responsibility could lower the U.K.'s growth forecast, XTB's Kathleen Brooks says in a note. GDP contracted by 0.1% in May, weaker than the 0.1% growth consensus forecast by economists in a WSJ poll. Weaker-than-expected economic growth "will put Chancellor Rachel Reeves in a tricky position as she seeks to avoid breaking her fiscal rules and raising any of the three main tax rates," Brooks says. (miriam.mukuru@wsj.com)

0456 ET - The European Union and U.S. are yet to announce a trade deal but it's unlikely to have significant impact on the euro's direction against the dollar, ING analyst Francesco Pesole says in a note. The exchange rate remains primarily driven by the Federal Reserve and U.S. economic data, he says. "However, in the absence of major data releases, markets may make some short-term adjustments should details of a draft deal emerge already today." The euro falls 0.1% to $1.1689 as the dollar recovers. It reached a two-week low of $1.1661 Thursday, according to LSEG. (renae.dyer@wsj.com)