Bitcoin Edges Higher But Remains Stuck in a Range — Market Talk

0728 GMT - Bitcoin rises marginally but continues to trade in a relatively tight range following a retracement from record highs. The cryptocurrency reached a record high of $123,153 on July 14, LSEG data show. This was driven by optimism over the passing of landmark crypto legislation in the U.S. However, bitcoin has since pulled back to trade below $120,000. "It continues to consolidate in a relatively narrow range, with support coming in around $117,000 and resistance still at $120,000," Trade Nation analyst David Morrison says in a note. Bitcoin last trades up 0.7% at $118,265. (renae.dyer@wsj.com)

0704 GMT - Singapore's labor market conditions may moderate further in 2H, the Monetary Authority of Singapore says in its macroeconomic review. Demand for workers could continue to soften in 2H, as GDP growth slows and firms hold back on expansion plans due to an uncertain economic outlook. Barring a sharp economic downturn, firms are likely able to keep labor costs in check this year, the MAS says. This would be through capping wage increments and lowering variable wage components instead of shrinking their workforce. Any rise in retrenchments and unemployment should also remain contained, the MAS adds. (amanda.lee@wsj.com)

0645 GMT - The dollar falls after reaching a one-month high Tuesday as investors await the Federal Reserve's policy decision. The Fed is widely expected to leave interest rates unchanged in a decision at 1800 GMT. However, Fed officials Michelle Bowman and Christopher Waller have both indicated they could vote for a rate cut. Any further dissent would show "deep division" within the Fed and could tilt policymakers towards favoring rate cuts in future months, Jefferies economist Mohit Kumar says in a note. The focus is also on U.S. second quarter economic growth data and the Treasury's quarterly refunding announcement, both at 1230 GMT. The DXY dollar index falls 0.1% to 98.829 after hitting a high of 99.141 Tuesday.(renae.dyer@wsj.com)

0632 GMT - Eurozone government bond yields are little changed ahead of a data avalanche. In particular, flash estimate GDP data are due from Germany, Italy and the eurozone, while it has already been released from France earlier in the day. France's GDP rose 0.3% on the quarter in the second quarter, faster than the 0.1% expansion forecast by analysts in the Wall Street Journal's poll. The 10-year German Bund yield eases 0.3 basis points to 2.688%, while the 10-year French OAT yield is up 0.2 basis point at 3.349%, according to Tradeweb. (emese.bartha@wsj.com)

0620 GMT - Barclays expects the U.S. Treasury to continue to signal unchanged coupon auction sizes for at least several quarters, its strategists say in a note. "We believe the refunding meeting outcome should be beneficial for the long end, both outright and for swap spreads, and the 20-year sector," they say. The strategists expect the next increase in note/bond issue sizes in 2027. Meanwhile, the Treasury will continue to rely on Treasury bills. Still, the share of T-bills will likely rise to about 23% by year-end 2026, they say. This would not be far from pre-Great Financial Crisis averages, suggesting there is no rush to increase coupon issuance, particularly given the elevated long-end term premium, the strategists say. (emese.bartha@wsj.com)

0610 GMT - Thailand's tourism sector is unlikely to be significantly affected by the Thai-Cambodian border conflict, Maybank Securities (Thailand)'s Chak Reungsinpinya writes in a report. Leaders in Thailand and Cambodia leaders have agreed to a cease-fire after deadly clashes over their disputed border. The Thai tourism sector will be supported by a recovery in Chinese tourist numbers and domestic travelers, the analyst says. Weekly tourist arrivals in Thailand has rebounded from recent lows, largely due to more Chinese tourists, the analyst adds. Government policy to promote domestic tourism is also supporting demand. (amanda.lee@wsj.com)

0608 GMT - Spain should continue to perform more strongly than its European peers, Melanie Debono at Pantheon Macroeconomics writes in a note to clients. The Spanish economy accelerated in the three months through June, figures this week showed, growing 0.7% compared with 0.6% in the first quarter. That rate should slow a little in the second half but the eurozone's fourth-largest economy should nonetheless book an expansion of 2.5% for the year as a whole, well above the 1.2% the eurozone is likely to record, according to Pantheon's estimates. Part of that outperformance will be down to Spanish goods exports' relatively low exposure to U.S. trade, Debono says. (joshua.kirby@wsj.com; @joshualeokirby)

0606 GMT - The Federal Reserve is expected to keep its monetary policy unchanged later in the day, with focus on Chair Jerome Powell's comments, says Danske Bank's Filip Andersson in a note. "Unclear data will not allow the Fed to pre-commit, but Powell could verbally open the door for a cut in the September meeting," the co-head of fixed income and forex research says. Markets price in around 17 basis points of rate cuts in September and a cumulative 45 basis points by the year-end, according to LSEG. Danske expects a 25-basis-point rate cut in September, followed by quarterly reductions until September 2026. (emese.bartha@wsj.com)

0556 GMT - U.S. Treasury yields stabilize in Asian afternoon trade after falling Tuesday, as investors anticipate the Federal Reserve to keep interest rates on hold. However, following this meeting, markets are already pricing in two rate cuts before year-end with an 85% probability, says Algebris Investments' Gabriele Foa in a note. Meanwhile, President Trump continues to call for much lower interest rates, he says. "With inflation not surging and the labor market softening, maintaining real rates at their current elevated levels will be increasingly difficult," the portfolio manager says. The two-year Treasury yield is flat at 3.872%; the 10-year yield is stable at 4.326%; while the 30-year Treasury yield falls 0.5 basis point to 4.863%, according to Tradeweb. (emese.bartha@wsj.com)

0541 GMT - The Bank of Japan's stance remains one of seeking more flexibility and prioritizing stability over any premature tightening, says Howe Chung Wan, head of Asian fixed income at Principal Asset Management. While the Fed is focused on the persistence of tariff-induced inflation, the BOJ is concerned about the impact of higher inflation on consumption, he says in an email. Domestic political uncertainty is adding complexity to an already delicate policy landscape. Markets are starting to price in a policy move around October, but with consumption data showing a slower recovery, policymakers appear intent on buying time to assess how underlying dynamics evolve, he says.(monica.gupta@wsj.com)

0537 GMT - The Federal Reserve's likely decision to keep interest rates on hold at Wednesday's meeting might prompt investors to buy into long-dated bonds, Insight Investment's Brendan Murphy says in a note. Fed Chair Jerome Powell may cite tentative signs of tariff-related inflation in categories like household furnishing and supplies, appliances and sporting goods as a reason the FOMC is happy to a wait-and-see approach to cutting rates, the head of fixed income North America says. "It may help keep the window open for investors to move out the yield curve and lock-in compelling yields in fixed income," he says. Insight Investment expects rate cuts will likely follow later in the year, however, potentially benefiting those exposed to interest rate risk. (emese.bartha@wsj.com)

0528 GMT - The Federal Reserve is lagging, says MFS Investment Management's Benoit Anne in a note. "We all believe that there will be more cuts coming, but we do not know quite yet," the senior managing director says. Complicating the situation, the current noise around political interference and Federal Reserve independence is causing a major distraction, he says. "If the Fed were to engage in aggressive rate cuts over the next few months, it could cause some reputational risk." With that in mind, MFS Investment Management anticipates that the Fed will go the extra mile at Wednesday's FOMC meeting to reiterate its patience message. (emese.bartha@wsj.com)