Crypto Rally Stalls as Market Awaits Key US Inflation Data

Cryptocurrency

Summary:

Bitcoin retreated to $119K ahead of U.S. inflation data, dragging crypto market cap below $4T, while Ethereum held near $4,300. Institutional inflows surged, with notable BTC and ETH whale purchases boosting sentiment.

Bitcoin closed Monday near its opening levels, losing nearly 3% of its 3.5% jump at the start of the day to $119K.

Bitcoin Pulls Back Ahead of US Inflation Data, Ethereum Holds Strong

The crypto market capitalisation fell below the $4 trillion mark, down 1.8% over the last day. Bitcoin failed to stay above $120K, Ethereum’s growth stalled at $4300, and many major altcoins have seen declines in the last couple of days.

Crypto Rally Stalls as Market Awaits Key US Inflation Data_2

Bitcoin closed Monday near its opening levels, losing nearly 3% of its 3.5% jump at the start of the day to $119K. There are fears of a repeat of the situation we saw in July, when a promising breakthrough turned into an exhausting sideways movement and rattled nerves with a decline in the first days of August. We attribute the BTC pullback to the cautious mood of major players ahead of US inflation data released later on Tuesday.

Crypto Rally Stalls as Market Awaits Key US Inflation Data_3

Ethereum is holding steady at the top at nearly $4300, indicating an optimistic mood among bulls: they are taking a wait-and-see approach rather than rushing to lock in profits after the rally. It seems the market is seriously set on moving towards historic highs at $4800, and is looking for a suitable reason to do so.

Crypto News

According to CoinShares, global investment in crypto funds rose by $578 million last week, more than doubling the outflow a week earlier. Investments in Bitcoin increased by $265 million, Ethereum by $270 million, Solana by $22 million, XRP by $18 million, and Near by $10 million. Investments in Sui decreased by $3 million.

Strategy additionally purchased 155 BTC last week at an average price of $116,401 per coin, according to company founder Michael Saylor. The company now owns 628,946 BTC, purchased at an average price of $73,288. The total investment is estimated at $46.09 billion.

According to Lookonchain, an unknown crypto whale has purchased 221,166 ETH worth about $1 billion over the past seven days. Market participants are optimistic about the coin’s prospects.

Sky Protocol, formerly known as Maker, received a B- credit rating from S&P Global Ratings. This is the first rating of a DeFi platform by a traditional rating agency. Sky Protocol is a decentralised lending platform that allows users to take out loans secured by cryptocurrencies.

Source: fxempire

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Adam

Economic

Beijing has urged local companies to avoid using Nvidia Corp.’s H20 processors, particularly for government-related purposes, complicating the chipmaker’s attempts to recoup billions in lost China revenue after the Trump administration reversed an effective US ban on such sales.

Over the past few weeks, Chinese authorities have sent notices to a range of firms discouraging use of the less-advanced semiconductors, people familiar with the matter said, asking not to be named discussing sensitive information. The guidance was particularly strong against the use of H20s for any government or national security-related work by state enterprises or private companies, the people said.

The letters did not, however, constitute an outright ban on H20 use, according to the people. Industry analysts broadly agree that Chinese companies still covet those chips, which perform quite well in certain crucial AI applications. President Donald Trump said Monday that the processor — which he called “obsolete” — “still has a market” in the Asian country.

Nvidia and Advanced Micro Devices Inc. both recently secured Washington’s approval to resume lower-end AI chip sales to China, on the controversial and legally questionable condition that they give the US government a 15% cut of the related revenue.

But even with Trump’s team on board, the two companies face the challenge that their Chinese customers are under Beijing’s pressure to purchase domestic chips instead. Beijing’s overall push affects AI accelerators from AMD in addition to Nvidia, one of the people said, though it’s unclear whether any letters specifically mentioned AMD’s MI308 chip.

Shares of Chinese AI chip designer Cambricon Technologies Corp. surged to their daily limit of 20% on the news of China’s guidance, leading a rally in peers such as Semiconductor Manufacturing International Corp.

Beijing’s stance could limit Trump’s ability to turn his export control about-face into a windfall for government coffers, a deal that highlighted his administration’s transactional approach to national security policies long treated as non-negotiable.

Still, Chinese companies may not be ready to jump ship to local semiconductors. “Chips from domestic manufacturers are improving dramatically in quality, but they might not be as versatile for specific workloads that China’s domestic AI industry hopes to focus on,” said Homin Lee, a senior macro strategist at Lombard Odier in Singapore. Lee added that he anticipates “strong” demand for the chips the Trump administration is allowing Nvidia and AMD to sell.

Beijing asked companies about that dynamic in some of its letters, according to one of the people, posing questions such as why they buy Nvidia H20 chips over local alternatives, whether that’s a necessary choice given domestic options, and whether they’ve found any security issues in the Nvidia hardware. The notices coincide with state media reports that cast doubt on the security and reliability of H20 processors. Chinese regulators have raised those concerns directly with Nvidia, which has repeatedly denied that its chips contain such vulnerabilities.

Right now, the people said, China’s most stringent chip guidance is limited to sensitive applications, a situation that bears similarities to the way Beijing restricted Tesla Inc. vehicles and Apple Inc. iPhones in certain institutions and locations over security concerns. China’s government also at one point barred the use of Micron Technology Inc. chips in critical infrastructure.

It’s possible that Beijing may extend its heavier-handed Nvidia and AMD guidance to a wider range of settings, according to one person with direct knowledge of the deliberations, who said that those conversations are in early stages.

AMD declined to comment on Beijing’s notices, while Nvidia said in a statement that “the H20 is not a military product or for government infrastructure.” China has ample supplies of domestic chips, Nvidia said, and “won’t and never has relied on American chips for government operations.”

China’s Ministry of Industry and Information Technology and the Cyberspace Administration of China did not respond to faxed requests for comment on this story, which is based on interviews with more than a half-dozen people familiar with Beijing’s policy discussions. The White House did not respond to a request for comment outside normal business hours.

The Chinese government’s posture raises questions about the Trump administration’s explanation for why the US is allowing those exports mere months after effectively banning such sales. Multiple senior US officials have said their policy reversal was the result of trade talks with China, but Beijing has publicly indicated that the resumed H20 shipments were not part of any bilateral deal. China’s recent notices to companies suggest that the Asian country may not have sought such a concession from Washington in the first place.

Beijing’s concerns are twofold. For starters, Chinese officials are worried that Nvidia chips could have location-tracking and remote shutdown capabilities — a suggestion that Nvidia has vehemently denied. Trump officials are actively exploring whether location-tracking could be used to help curtail suspected smuggling of restricted components into China, and lawmakers have introduced a bill that would require location verification for advanced AI chips.

Second, Beijing is intensely focused on developing its domestic chip capabilities, and wants Chinese companies to shift away from Western chips in favor of local offerings. Officials have previously urged Chinese firms to choose domestic semiconductors over Nvidia H20 processors, Bloomberg reported last September, and have introduced energy efficiency standards that the H20 chip does not meet.

Nvidia designed the H20 chip specifically for Chinese customers to abide by years of US restrictions on sales of its more advanced hardware, curbs designed to limit Beijing’s access to AI that could benefit the Chinese military. The H20 chip has less computational power than Nvidia’s top offerings, but its strong memory bandwidth is quite well suited to the inference stage of AI development, when models recognize patterns and draw conclusions.

That’s made it a desirable product to companies like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. in China, where domestic chip champion Huawei Technologies Co. is struggling to produce enough advanced components to meet market demand. By one estimate from Biden officials — who considered but did not implement controls on H20 sales — losing access to that Nvidia chip would make it three to six times more expensive for Chinese companies to run inference on advanced AI models.

“Beijing appears to be using regulatory uncertainty to create a captive market sufficiently sized to absorb Huawei’s supply, while still allowing purchases of H20s to meet actual demands,” said Lennart Heim, an AI-focused researcher at RAND, of China’s push for companies to avoid American AI chips. “This signals that domestic alternatives remain inadequate even as China pressures foreign suppliers.”

In his remarks Monday, Trump said China’s Huawei already offers chips comparable to the Nvidia H20, echoing previous remarks by officials in his administration who’ve defended the decision to resume H20 exports partly on those grounds. The US should keep the Chinese AI ecosystem reliant on less-advanced American technology for as long as possible, these officials say, in order to deprive Huawei of the revenue and know-how that would come from a broader customer base.

Other administration officials have strongly objected to that logic, Bloomberg has reported, arguing that resuming H20 exports will only embolden China’s tech champions and bolster the country’s overall computing power.

China Urges Firms to Avoid Nvidia H20 Chips After Trump Ends Ban_1

Nvidia's H20 Is a Less Powerful Version of Top AI Chips | Trump officials say China already has better technology than the H20

Commerce Secretary Howard Lutnick and other Trump officials have also claimed that the H20 move was part of a deal to improve American access to Chinese rare-earth minerals — despite the Trump team’s previous assertions that such an arrangement was not on the table. “As the Chinese deliver their magnets, then the H20s will come off,” Lutnick said last month. Treasury Secretary Scott Bessent said in late July that the magnet issue had been “solved.”

The first Nvidia H20 and AMD MI308 licenses arrived a bit over a week after Bessent’s declaration — after Nvidia Chief Executive Officer Jensen Huang met with the president and both companies agreed to share their China revenue with the US government.

Source: Bloomberg

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Devin

Economic

EJ Antoni, President Donald Trump’s pick to lead the Bureau of Labor Statistics, has suggested suspending the agency’s monthly jobs reports and publishing only quarterly numbers until issues with data collection are corrected.

In an interview with Fox Business before Trump nominated him on Monday, Antoni said businesses can’t plan and the Federal Reserve can’t conduct monetary policy when the monthly report is unreliable and frequently overstated and thus misleading.

“Until it is corrected, the BLS should suspend issuing the monthly job reports but keep publishing the more accurate, though less timely, quarterly data,” he said, according to Fox Business. “Major decision-makers from Wall Street to DC rely on these numbers, and a lack of confidence in the data has far-reaching consequences.”

If confirmed by the Senate, Antoni would succeed Erika McEntarfer, whom Trump abruptly fired Aug. 1 after a BLS report showed weak job growth in July and substantial downward revisions to the prior two months. Trump accused her, without evidence, of manipulating the numbers for political purposes, while noting that she was appointed by former President Joe Biden.

Source: Bloomberg Europe

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Adam

Economic

The data that caused President Donald Trump to fire the head of the Bureau of Labor Statistics because he did not like the July employment report, calling it "rigged," is being taken as serious evidence by Federal Reserve officials of a slowing economy and as a justification for the interest rate cuts Trump wants.

"The latest employment report confirmed some of the signs of fragility and reduced dynamism in the labor market," Fed Governor Michelle Bowman, a Trump appointee, said in a Saturday speech that elaborated on how the latest jobs numbers and revisions to prior months' data validated her concerns about a weakening economy. "I see the risk that a delay in taking action could result in a deterioration in labor market conditions and a further slowing in economic growth."

While signs of a weakening labor market could get Trump his wish for the Fed to cut rates, which he believes would result in lower interest costs on the country's increasing debt load, it also flies in the face of his assertions that his tax cuts and immigration and trade agendas are driving growth higher.

Comments from policymakers who had recently been focused on rising inflation, for example, show that news of ebbing job growth in May, June and July has begun shifting their sense of risks facing the economy.

While only Bowman and another Trump appointee, Governor Christopher Waller, have so far advocated for immediate rate cuts, with both dissenting against last month's decision to hold rates steady, investors now put a more than 85% probability on a cut at the Fed's September 16-17 session.

New BLS data on Tuesday showed consumer prices rose 2.7% in July on a year-over-year basis, the same as in June, a number held down by lower prices for gasoline and food at home. But excluding volatile food and energy costs, underlying or "core" inflation rose to 3.1% from 2.9% the month before, driven up by increases in services including medical care and airline travel, and by goods including furniture and used vehicles that could be related to tariffs.

Traders retained bets on cuts at the Fed's September and December meetings after the data was released.

For all its recent shortcomings in data production, BLS has dense internal checks to be sure the figures are not manipulated, while the Fed is attentive to shades of gray and almost always cautious when approaching policy shifts.

Trump late on Monday named E.J. Antoni, chief economist at the conservative Heritage Foundation, as the new commissioner, a decision that will be watched with the same intensity in economic and investment circles as his coming choice for a successor to Fed Chair Jerome Powell, given the implications for the integrity of data that can influence interest rates, stock prices and political fortunes.

Fed policymakers in recent comments have noted ways they can supplement and cross-check what comes from the BLS.

Policymakers "look at data produced by statistical government agencies. We also look at a lot of data that's not produced by statistical government agencies. We try to validate what the different data sets are saying, make sure they are telling the same story," St. Louis Fed President Alberto Musalem said last week.

"I'm confident we can continue to do our job well....We're connected to the economy through direct interaction with companies and households all around the country. So in addition to data, we have a very strong impressionistic view of the economy," he said.

CROSS CHECKS

Even if the BLS remains in flux, there is no shortage of data for the Fed to peruse for clues on the economy.

Private data sources have expanded dramatically in recent years, as have alternatives aiming to measure consumer foot traffic, prices, job openings and hiring in close to real time by drawing on things like online hiring sites, cellphone locations and online prices.

Groups like the Institute for Supply Management provide important insight on inflation, while surveys by the University of Michigan, the National Federation of Independent Business, the Conference Board and others offer insight on inflation expectations, hiring, and the general economic outlook.

Administrative records provide an important backstop because they represent tabulations of actual events. Unemployment benefits claims are reported weekly by each state and compiled into a single report by the Labor Department, while datasets like the BLS Quarterly Census of Employment and Wages submitted by businesses come with a lag but provide an eventual check on monthly job growth estimates.

The Fed also has its own data collection efforts, including surveys of business executives like chief financial officers, and extensive but less formal interviews underlying its Beige Book, an anecdote-based window on the economy prepared ahead of each rate-setting meeting. Quarterly data compilations provide a slower-moving view of the health of household balance sheets.

Minneapolis Fed President Neel Kashkari said in a CNBC interview last week that he felt any effort to tilt the results at an agency like BLS would fail.

"You cannot fake economic reality...Imagine that numbers are being faked for anybody's political benefit. People are going to see what they feel. Companies are either going to be hiring or they're not, and so Americans are going to see the economy. Convincing them that inflation is not real is not a very effective strategy. Convincing somebody that the jobs numbers are better than they really are, I don't think it's actually going to work."

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Adam

Commodity

U.S. President Donald Trump's statement on not putting tariffs on gold has sent an encouraging signal for trade stability but only a formal decision will provide certainty, the head of the Swiss precious metals association ASFCMP said on Tuesday.

Trump on Monday said he would not impose tariffs on gold, a move welcomed by global bullion markets and which ended days of speculation that the yellow metal could be caught up in the ongoing global trade spat.

"President Trump's statement is an encouraging signal for trade stability," said Christoph Wild, president of the ASFCMP, in a statement.

"However, only a formal and binding decision will provide the certainty the gold sector and its partners require."

Source: Reuters

Risk Warnings and Disclaimers

Add to Favorites

Daniel Carter

Political

Ukraine's authoritative DeepState war map showed on Tuesday that Russian forces had advanced by at least 10 km (six miles) north in two prongs in recent days, part of their drive to take full control of Ukraine's Donetsk region.

The advance is one of the most dramatic in the last year, although military analysts said the Russians were using small groups of soldiers to try to establish footholds and that it was uncertain if they could maintain their positions in the face of a Ukrainian push back.

DeepState said the Russians had surged forward near three villages on a section of the frontline associated with the Ukrainian towns of Kostyantynivka and Pokrovsk, which Moscow is trying to encircle by exploiting Kyiv's lack of manpower.

"The situation is quite chaotic, as the enemy, having found gaps in the defence, is infiltrating deeper, trying to quickly consolidate and accumulate forces for further advancement," DeepState said on its Telegram channel.

U.S. President Donald Trump and Russian President Vladimir Putin are expected to discuss a possible deal to end the war in Ukraine when they meet in Alaska on Friday. Unconfirmed media reports say Putin has told Trump he wants Ukraine to hand over the part of the Donetsk region that Russia does not control.

The Russian Defence Ministry said units of its army grouping "Centre" had improved their positions on the edge of the frontline. Ukraine's military said it was engaged in "difficult" combat near the cities of Pokrovsk and Dobropillia and had sent in reserves to block advances by small groups of Russian troops.

It said some of the groups attempting to bypass Ukraine's defensive lines in the area had already been destroyed, and that others were being engaged by Ukrainian forces.

Pasi Paroinen, a military analyst with the Finland-based Black Bird Group, said the situation had escalated rapidly, with Russian forces infiltrating past Ukrainian lines to a depth of roughly 17 km (10 miles) in the past three days.

"Forwardmost Russian units have reportedly reached the Dobropillia – Kramatorsk road T0514 and Russian infiltration groups have also been reported near Dobropillia proper," he wrote on X.

Pro-Ukrainian open source military analysts were divided on how significant the development was, with some saying that Russia's tactic of sending small groups to quickly seize but not necessarily hold territory for long had made mapping the war much harder.

Konrad Muzyka, director of Rochan Consulting, said the Russian thrust, although it appeared sudden, was the culmination of more than a week of infiltration and positional gains.

A former Ukrainian army officer whose Frontelligence Insight analysis tracks the conflict, posted: In both 2014 and 2015, Russia launched major offensives ahead of negotiations to gain leverage. The current situation is serious, but far from the collapse some suggest.

Sergei Markov, a former Kremlin adviser, said the Russians had been able to advance amid "a partial collapse in the front" due to Ukraine's shortage of soldiers.

"This breakthrough is like a gift to Putin and Trump during the negotiations," Markov said, suggesting that, if sustained, it could increase pressure on Kyiv to cede some land to prevent the Russian army eventually taking the rest of Donetsk by force.

To do that, though, Russian forces would first need to take control of Sloviansk, Kramatorsk, Druzhkivka and Kostyantynivka - which Russian military analysts call "fortress cities".

Ukrainian President Volodymyr Zelenskiy has publicly pushed back against the idea of ceding territory to Russia, saying any peace deal must be a just one.

Bohdan Krotevych, former chief of staff of Ukraine's Azov brigade and a National Guard lieutenant colonel, took to X late on Monday to warn Zelenskiy of the threat, saying the frontline in the area was "a complete mess".

"The line of combat engagement as a fixed line does not actually exist," he said.

Source: Reuters

Risk Warnings and Disclaimers

Add to Favorites

Adam

Economic

As we share below, the Fed Funds futures market is 86.5% confident the Fed will cut rates by 25 bps in September. However, they assign a zero percent chance that the Fed cuts by 50 bps. Powell’s trepidation to cut rates leaves traders unwilling to consider that anything more than 25bps is possible. We argue that despite the odds, a 50-bps rate cut is possible if today’s CPI report is weak.

CPI is expected to increase by 0.2% on a headline and core basis. A 0.2% increase would bring the year-over-year CPI rate to 2.7%, decently above the Fed’s 2.0% target. Even if CPI were to surprise with a 0% change, the year-over-year change would sit above the Fed’s target. Such is the market’s logic for not considering 50 bps. We think that a student shift lower in inflation, especially as tariffs are having a significant impact, coupled with the recent sharp negative revisions in employment data and new highs in continuing jobless claims, could be enough for the Fed to debate 50 bps.

Moreover, Stephen Miran may likely join the Fed by the September meeting, giving them at least three votes for a cut. Consider also that the two Fed members who voted for a rate cut at the last meeting may think they are already 25 bps behind the curve and want to vote for 50 bps to catch up. The political pressure is on Powell.

While he may not cave and vote for 50 bps in September, we think the market is underestimating the odds that a majority of members will. With zero odds, the market is vulnerable (up or down) for a sudden shift in the Fed’s rate projections.

pple And Technology Lead The Market Higher; Everything Else Lags

On a relative basis, the technology sector is the clear leader. As shown below, it is moderately overbought versus the market on a relative basis. Importantly, every other sector is near fair value or oversold versus the market. Apple, rising by over 12% last week versus the 2% for the S&P 500, helped push the technology sector up and to the right, indicating overbought conditions on a relative and absolute basis. As the graph shows, there is a clump of sectors at fair value, and another that are getting very oversold. Of the very oversold, healthcare weakened by sharp declines in Unitedhealth Group and Eli Lilly are now grossly oversold versus the market. The analysis argues that any shift in market tenor could see healthcare outperform and technology underperform.