Bitcoin hits record high
Bitcoin joined the global “risk-on” party on Thursday, climbing to a record alongside equities as growing confidence in imminent US interest-rate cuts buoyed sentiment and pressured the US dollar.
The world’s largest cryptocurrency drew support from expectations of easier policy, a friendlier regulatory backdrop and steady institutional inflows.
Ether also advanced, hovering near its highest since November 2021 and extending its year-to-date gain to about 42%, outpacing Bitcoin’s roughly 32% rise as investors sought higher-beta exposure.
Asian markets pause ascent as FTSE 100 flatlines
In equities, Asian markets paused after a blistering run, with Japanese shares easing from fresh records and tech-heavy Taiwan and South Korea slipping after recent highs.
Unlike its European peers, the FTSE 100 found Thursday morning hard going despite positive growth data, trading mostly flat as Rio Tinto (-4%) and Diploma (-3%) weighed on the UK blue chip index, undoing some of the strong post-earnings gains by Admiral (+6%) and Aviva (+4.7%) amongst others.
UK growth data better-than-expected
In the UK, preliminary data showed gross domestic product (GDP) grew 0.3% quarter-over-quarter (QoQ) in the second quarter (Q2), beating expectations as services and construction offset weaker production. It has to be noted, though, that some activity was brought forward ahead of April stamp duty changes and US tariff announcements.
UK industrial production rose 0.7% month-on-month (MoM) in June, snapping a three-month lull as manufacturing and utilities rebounded.
50 basis point US rate cut in the pipeline by year-end?
Money markets now see the Federal Reserve (Fed) resuming cuts as soon as next month – some traders even toying with a 50 basis point move after remarks from US Treasury Secretary Scott Bessent – while softer US inflation and signs of cooling labour demand reinforced the dovish tilt.
Bessent also argued the Bank of Japan (BoJ) is behind the curve on inflation risks, helping the yen strengthen to around ¥146.50 per dollar, its firmest in three weeks, even as Governor Kazuo Ueda maintained that “underlying inflation” remains below the BoJ’s 2% target and faced pressure to rethink gauges tied to domestic demand and wages.
European market open muted but then rally
European stocks were called slightly lower at the open as investors awaited UK and euro-area GDP prints, French final inflation, eurozone employment and a busy earnings slate but then rallied amid more positive surprises ahead of the US producer price index (PPI) data release.