Bitcoin Recovers as U.S. Rate-Cut Bets Rise — Market Talk

0837 GMT - Bitcoin recovers after hitting a three-and-a-half-week low at the weekend on concerns about U.S. tariffs. President Trump announced steeper tariffs against dozens of countries last week, denting investor appetite for risky assets including cryptocurrencies. Risk sentiment is now recovering as expectations for the Federal Reserve to resume interest-rate cuts in September rise, although bitcoin remains below the key $120,000 level. This follows Friday's weaker-than-expected U.S. nonfarm payrolls data and Federal Reserve Gov. Adriana Kugler's decision to resign. Trump plans to name Kugler's replacement this week and there is speculation he could choose someone who supports his calls for lower rates. Bitcoin rises 0.1% to $114,535 after reaching a low of $112,003 Sunday, LSEG data show. (renae.dyer@wsj.com)

0827 GMT - China's property sector isn't a focus for Chinese policymakers for now, Julius Baer fixed income analyst Sok Yin Yong writes in an email. The Chinese property sector continued to weaken in the seasonally low month of July, as expected. The recent Politburo meeting included little mention on the sector, largely reiterating messages from the July Central City Work Conference, suggesting property isn't a focus for Beijing following stronger-than-expected 2Q GDP growth. That said, local governments may continue rolling out easing measures to stabilize the market. With no fresh policy support, weak home-sales momentum is likely to persist into August, also a seasonally soft month, she says. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

0814 GMT - The weakness in U.S. nonfarm payrolls data indicates that the U.S. labor market is slowing but doesn't indicate recession, says Jefferies' Mohit Kumar in a note. "It's a slowdown and we are not moving towards a recession," the global economist says. Jefferies expects the U.S. unemployment rate to peak around 4.5%, which compared to the rates over the last 20 years "looks great." A slowdown in employment should nevertheless drive the Federal Reserve to cut rates, Kumar says. He expects rate cuts to resume in September. The market is pricing in a total of 59 basis points of rate cuts priced for this year, which Jefferies thinks is "reasonable," Kumar says. (emese.bartha@wsj.com)

0810 GMT - The Swiss franc falls as concerns about U.S. tariffs weigh, offsetting an unexpected acceleration in Swiss inflation. The Trump administration last week announced a 39% tariff on Switzerland, effective August 7. This is higher than the 31% levy announced in April. If the tariffs sticks, this will add to "disinflationary forces" in Switzerland, ING's Chris Turner says in a note. However, the franc should recover on any last-minute trade deal, he says. The tariff news overshadows data Monday that showed Swiss annual inflation edged up to 0.2% in July. Economists in a WSJ survey expected inflation to hold steady at 0.1%. The euro rises to a one-week high of 0.9348 francs, LSEG data show. (renae.dyer@wsj.com)

0803 GMT - The dollar is likely to remain weak until President Trump names a replacement for Federal Reserve Governor Adriana Kugler following her decision to resign early, MUFG Bank's Derek Halpenny says in a note. Kugler announced Friday she plans to step down on August 8. Trump said he plans to announce a new Fed Governor this week. He could appoint someone who supports his calls for lower interest rates. White House economic adviser Kevin Hassett would be "the worst pick for the dollar" given his close association with Trump, Halpenny says. Ahead of the announcement, appetite for buying back the dollar after its falls since Friday will be limited, he says. The DXY dollar index falls 0.2% to 98.931, having earlier hit a six-day low of 98.603. (renae.dyer@wsj.com)

0757 GMT - Bank of England policymakers are likely to have differing views at Thursday's interest-rate decision due to the U.K.'s complicated outlook, Tickmill Group's Patrick Munnelly says in a note. U.K. inflation remains well above the 2% target while economic growth is weakening. "This trade-off--above-target inflation versus below-potential output--underpins both the likelihood of a split vote and the cautious policy guidance," Munnelly says. Markets price in a 92% probability that the BOE will cut interest rates by 25 basis points this week, LSEG data show. (miriam.mukuru@wsj.com)

0749 GMT - U.S. Federal Reserve governor Adriana Kugler's decision to resign adds another layer of uncertainty to the outlook for monetary policy, says MUFG's Derek Halpenny in a note. U.S. President Trump said in a statement that he might announce a replacement in the "next few days." The new appointee "could help shape the views of others" and potentially be seen as a further threat to Fed independence, the head of research says. Trump has been exerting pressure on Fed Chair Jerome Powell to cut interest rates. (emese.bartha@wsj.com)

0747 GMT - Gold futures rise, holding higher levels after surging Friday on weak U.S. jobs data and trade tariffs. Futures are up 0.2% at $3,407.0 a troy ounce. The precious metal posted its biggest gain in two months on Friday after the release of U.S. nonfarm payroll data. The release showed employment data for July was far short of market expectations and greatly revised down previously reported employment numbers for May and June. The slowdown in U.S. job growth has boosted expectations of interest-rate cuts, a boon for noninterest bearing bullion, MUFG analysts say in a note. Gold should be well-supported in the near term as traders increasingly price in rate cuts and hunt for safe-haven assets amid rising economic uncertainty, analysts say. (joseph.hoppe@wsj.com)

0725 GMT - Yields on U.K. government bonds are steady ahead of an interest-rate decision by the Bank of England on Thursday. Investors widely expect the BOE to cut rates by 25 basis points, with money markets pricing in a 92% chance of this prospect, LSEG data show. Gilt yields declined sharply on Friday following weaker-than-expected U.S. non-farm payrolls data. Ten-year gilt yields are little changed at 4.546%, Tradeweb data show. (miriam.mukuru@wsj.com)

0719 GMT - The Bank of England is likely to cut interest rates on Thursday but sterling's reaction to that should be muted, Danske Bank analysts say in a note. A rate cut is widely expected and the BOE will likely maintain guidance for a gradual pace of policy easing, they say. Beyond Thursday's decision, Danske Bank expects sterling to weaken as it expects the BOE to lower rates more than markets expect in 2026. Elevated uncertainties, signs of weaker U.K. growth and a positive correlation to negative dollar environment could also weigh on the U.K. currency. Danske Bank expects the euro to rise to 0.89 pounds in six to 12 months. The euro is last 0.2% lower at 0.8710 pounds. Against the dollar, sterling trades flat at $1.3281. (renae.dyer@wsj.com)

0705 GMT - The Chinese government is likely to introduce an additional CNY0.5 trillion to CNY1 trillion in new stimulus around or after the high-level meetings scheduled for September and October, Barclays analysts write in a note. That said, the analysts continue to be more conservative than markets about the size of the fiscal and monetary easing. China recently introduced an annual childcare subsidy of CNY3,600 until the age of three, signaling some social-welfare spending. The central government will allocate CNY90 billion this year for childcare subsidies, they add. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

0703 GMT - Markets currently expect the European Central Bank will again leave interest rates on hold in September, Commerzbank Research's Rainer Guntermann says in a note. However, a likely rate reduction from the Bank of England on Thursday--plus growing expectations of a September rate cut by the Federal Reserve--should keep alive ECB rate-cut expectations over the coming quarters, the rates strategist says. Markets currently price in an 89% probability that the ECB will again keep rates on hold in September, with the deposit rate staying at 2.00%, according to LSEG data. The ECB held rates at its last meeting on July 24. (emese.bartha@wsj.com)