Bitcoin Rises on Hopes New Regulation Will Boost Demand — Market Talk

0832 GMT - Bitcoin rises, supported by hopes that recent U.S. regulatory milestones could encourage wider demand for cryptocurrencies. President Trump on Friday signed into law the Genius Act that provides a regulatory framework for stablecoins, a cryptocurrency tied to other assets like the dollar. This represents a "significant victory for the crypto sector that has been advocating for a regulatory framework to enhance its legitimacy," Tickmill Group's Patrick Munnelly says in a note. The House passed two other crypto bills last week. This includes the Clarity Act that creates a new market structure for digital assets and the Anti-CBDC Surveillance State Act which bans the Federal Reserve from issuing a new digital currency. Bitcoin rises 0.8% to $117,878, LSEG data show. (renae.dyer@wsj.com)

0830 GMT - Inflation in Malaysia is expected to remain subdued for the rest of 2025, prompting OCBC to lower its full-year CPI forecast to 1.5% from 2.0%. This is due to muted headline inflation of 1.4% in 1H and fading prospects of fuel subsidy reforms, as the government requires a more detailed review of the mechanism, says OCBC senior ASEAN economist Lavanya Venkateswaran in a note. She had previously expected a 20%-25% increase in RON95 prices from October. With inflation under control and GDP growth projected to slow in 2H, she sees room for another 25bp rate cut by Bank Negara by year-end, bringing the policy rate to 2.50%. (yingxian.wong@wsj.com)

0803 GMT - The euro falls against the dollar due to speculation that the U.S. and European Union will fail to reach to trade deal, ING analyst Francesco Pesole says in a note. The WSJ reports that EU countries are pushing for retaliatory measures if no deal is reached by the August 1 deadline. "The Trump administration has shown little tolerance for retaliatory measures, and there is a risk this could spiral (even if temporarily) into a tit-for-tat tariff escalation." The euro's performance against the dollar will depend on the extent of any escalation and whether the EU emerges as a relative loser while other countries secure deals with the U.S., he says. The euro falls 0.1% to $1.1687. (renae.dyer@wsj.com)

0801 GMT - The U.K. looks likely to raise taxes at the autumn budget after public sector net borrowing data for June was worse than expected, Pantheon Macroeconomics' Rob Wood says in a note. Public sector net borrowing was 20.7 billion pounds in June, up from 14.1 billion pounds in June 2024. This was well above the 18.8 billion pounds forecast by economists in a WSJ poll. The U.K. Treasury chief Rachel Reeves "would need to raise taxes or cut spending by a little over 20 billion pounds in the autumn budget to restore her slim margin of headroom," Wood says. (miriam.mukuru@wsj.com)

0751 GMT - Gold futures soften as the U.S. dollar recoups some losses, though they remain at one-month highs. Futures are down 0.3% at $3,398.40 a troy ounce, but are up 1.1% on week after rallying on Monday on a slump in the dollar. Investor volumes in gold have picked up since the start of the week, with the precious metal emphatically breaking out of a tight trading range it has held since early July, Pepperstone's Chris Weston says in a note. For now, gold is taking its cues from the U.S. dollar, Weston says. Any U.S. dollar rallies should remain capped as the Aug. 1 U.S. tariff implementation deadline approaches and given central bank policy uncertainty due to the risk of an early shadow Federal Reserve chair nominee. This should be a boon for gold, Weston writes. (joseph.hoppe@wsj.com)

0744 GMT - PBOC is likely to hold its policy rate steady throughout the end of 2026, BofA Securities economists say in a commentary. They point out that there are limited room for further cuts given its concerns on bank net interest margins, which could be pressured by further reduction in lending rates relative to funding costs. The persistent negative interest rate differential with the U.S. remains a constraint, with the Fed maintaining its policy rate amid solid U.S. growth and looming inflation, BofA says. (tracy.qu@wsj.com)

0742 GMT - Sterling's recent decline against the euro could reflect concerns over the U.K.'s fiscal situation, as well as the euro's appeal as a reserve currency, ING's Francesco Pesole says in a note. These fiscal concerns could be fuelled further after data Tuesday showed U.K. government borrowing increased to 20.7 billion pounds in June, more than expected, he says. "There is no meaningful impact on the pound this morning, but that probably raises the chances even further of tax hikes this autumn." This will likely limit any gains for sterling, Pesole says. The euro rises 0.1% to 0.8674 pounds. Sterling falls 0.1% to $1.3470. (renae.dyer@wsj.com)

0737 GMT - The Hungarian forint is likely to remain relatively stable in the coming quarter as Hungary's central bank stays cautious over cutting interest rates, Commerzbank's Tatha Ghose says in a note. The central bank is expected to leave rates unchanged in a decision at 1200 GMT. The central bank's stance comes even as core inflation moderates, pushing real rates adjusted for inflation higher. Its position has also become more convincing due to no frequent contradictions from government leaders, prompting markets to expect higher for longer rates. This is helping the forint perform "much better than it was doing six months ago." The euro rises 0.2% to 399.09 forint but has fallen 2.8% over the past six months, LSEG data show. (renae.dyer@wsj.com)

0725 GMT - While the incoming Bank of Thailand governor is expected tilt the central bank toward lower interest rates, Vitai Ratanakorn faces a balancing act between supporting growth and managing the country's high household debt-to-GDP ratio, says HSBC Asean economist Aris Dacanay. "With high levels of leverage in the economy, easing monetary policy could risk Thailand's long-term economic prospects, leading to a curtailing of future consumption and demand," the economist says. Navigating these risks alongside external headwinds such as U.S. tariffs and disinflationary pressures from Chinese exporters, will be crucial, he adds. "Market participants will likely be on the lookout for policies that can improve the assessment of credit risk, especially loans to micro, small and medium-sized enterprises," he says. (jihye.lee@wsj.com)

0725 GMT - The U.K.'s public finances may not be in as bad a shape as the most recent figures suggest, Investec economist Philip Shaw writes in a note to clients. June borrowing was the second highest on record for the month, behind only the pandemic June of 2020 as debt payments surged, figures from the Office for National Statistics show Tuesday. Interest payments are likely to recede from that high point, and other elements of public spending are also likely to slow over the months ahead, Shaw says. Still, fiscal developments "have been very disappointing so far this financial year and [treasury chief] Rachel Reeves will almost certainly be investigating potential revenue raising measures." he says-.(joshua.kirby@wsj.com; @joshualeokirby)

0720 GMT - Singapore's central bank is likely to stand pat on monetary policy on July 30, says OCBC research's Christopher Wong in a note. The Monetary Authority of Singapore has already eased policy twice in 1H through reductions in the slope of SGD nominal effective exchange rate's policy band, the FX strategist notes. "Recent data does not suggest urgency for immediate action and a pause at this juncture gives policymakers room to assess the impact of earlier easing, while allowing tariff uncertainties to find some clarity," Wong says. However, OCBC doesn't rule out possibility of MAS flattening the slope if the assessment of both external and domestic growth outlook is drastic. (ronnie.harui@wsj.com)

0720 GMT - Yields on U.K. government bonds, or gilts, climb after higher-than-expected public sector borrowing data. U.K. public sector net borrowing increased to 20.7 billion pounds in June from 17.7 billion pounds in May, above the 18.8 billion pounds consensus forecast by economists in a WSJ survey. "The latest U.K. public sector finances highlight the parlous state of the government's fiscal position, with some of the highest borrowing on record for June," Quilter Cheviot's Richard Carter says in a note. The 10-year gilt yield rises 2 basis points to last trade at 4.633%, Tradeweb data show. (miriam.mukuru@wsj.com)