US Stock Futures Steady As Middle East Tensions Cool; Powell In Focus

The dollar pushed higher against the yen but struggled to regain ground against other currencies on Wednesday as investors decided to take on more risk following a fragile ceasefire between Israel and Iran.

Markets regained some stability, with an index of global stocks hitting a record high overnight as the truce brokered by U.S. PresidentDonald Trumptook hold betweenIranand Israel.

The long-time Middle East adversaries signalled the air war between them was over, at least for now, after Trump publicly scolded both sides for violating a ceasefire he announced.

Investors heavily sold the dollar following the news, having piled into the U.S. currency after pouring into the safe-haven currency during the 12 days of war between Israel and Iran that also saw the U.S. bomb Iran's uranium-enrichment facilities.

The eurowas mostly stable at $1.1605, still near its highest since October 2021, as was sterling, which held at $1.3608, near its highest since January 2022.

While the ceasefire appeared precarious, investors for now seemed to welcome any reprieve.

"The market is complacent about some of the downside risks," said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia.

"The thing I get is this issue is not over, which means it could come back to be a driver of commodity prices and currency markets again."

In other currencies, the Swiss franc, which scaled a 10-1/2-year high on Tuesday, retreated, allowing the dollar to gain 0.16% to trade at 0.8064 francs.

The dollar made most headway against the yen, rising 0.6% to 145.74.

Some Bank of Japan policymakers called for keeping interest rates steady for the time being due to uncertainty over the impact of U.S.tariffson Japan's economy, a summary of opinions at the bank's June policy meeting showed on Wednesday.

Against a basket of currencies, the dollarrose 0.1% to 98.1.

On Tuesday, Federal Reserve Chair Jerome Powell stuck to his cautious approach, reiterating that the central bank was in no rush to ease rates at his semi-annual testimony to Congress. But this did little to shift market expectations of an 18% chance the Fed could cut in July, according to the CME FedWatch tool.

A number of Fed officials have spoken in the last week and their views indicated some divergence among policymakers.

Both Michelle Bowman and Christopher Waller seemed to lean in favour of a summer rate cut, while others, such as Fed Governor Michael Barr, have signalled they believe the economy is holding up well enough not to require any for now.

Commerzbank strategist Michael Pfister said it was "increasingly clear" policymakers were no longer united on future monetary policy, and discussions over rate cuts could surface as early as July.

"In such a scenario, expectations of interest rate cuts are likely to gather pace again," he said.

"If the consensus within the FOMC continues to crumble in the coming weeks, this figure is likely to rise. This is not a good sign for the U.S. dollar."

A raft of weaker-than-expected U.S. economic data in recent weeks has also supported expectations for Fed cuts this year, with futures pointing to nearly 60 basis points worth of easing by December. (0#USDIRPR)

Data on Tuesday showed U.S. consumer confidence unexpectedly deteriorated in June as households grew increasingly worried about job availability, another indication that labour market conditions were softening.

Source:Reuters

Bitcoin , the largest cryptocurrency, saw its price slip below $100,000 over the weekend but quickly rebounded above $106,000. Analysts note that the latest drop stopping at $97,000 might trigger a response reaching up to $110,000. According to 10x Research, despite $63 billion entering the market in 2024, Bitcoin has only risen by 13% since the start of the year, indicating that it is no longer reacting as strongly as in previous cycles. Investors are adapting to lower volatility by shifting their capital into a smaller number of major cryptocurrencies. On the macroeconomic front, following the Federal Reserve’s surprise 50 basis point rate cut last September, inflation has remained stable at 2.4% for three months, with unemployment steady at 4.2%. As markets await the July 15 CPI data, the $97,000 support is closely watched as the potential last dip level.

Key Support and Resistance Levels on the Bitcoin Chart

The $97,000 level on the chart is defined as the “last entry zone” and is considered a strong response area for buyers. While the psychological support at $100,000 remains, it is now regarded as a “minor support”. If the price fails to hold above this threshold, the $97,000 level might be tested. The consolidation range between $100,000 and $106,000 suggests that large-scale breakouts may remain limited until mid-July.

On the resistance side, the $106,000 level serves as the first recovery point after the weekend drop. Analyst Astronomer indicates that if the price sustains above this, the target would be $110,000. This level stands out as the initial major barrier for a price surge, provided the $97,000 support holds. It is often reminded that weekend lows tend to be retested, suggesting that despite short-term volatility, there is a cautious optimism in the broader trend.

Effects of Macro Data and Geopolitical Developments

Despite billions of dollars flowing into Bitcoin ETFs in 2024, the price remaining muted indicates that “positioning style over money” is coming to the forefront. According to 10x Research, as volatility decreases, investors are moving away from leverage and into major cryptocurrencies. This approach dampens the upward momentum in the short term.

Following last year’s surprise interest rate cut by the Fed, the increase in bond yields reflected the market’s questioning of this decision. However, the stabilization of inflation at 2.4% and unchanged unemployment rates bolster the “soft landing” scenario. In the geopolitical arena, the Israel-Iran ceasefire supports risk appetite and contributed to Bitcoin rising to $106,000 earlier in the week. Nonetheless, investors appear cautious until the arrival of the July CPI data.

As liquidity inflows continue, the true direction of the price will be determined by macro data as well as how market participants adapt to this low volatility environment. Stable ETF flows, the addition of cryptocurrencies to corporate balance sheets, and growth in the stablecoin market are being monitored as supportive factors for an upward trend.

Source: CryptoSlate

The European Commission finally revealed how it’s planning to react to the likelihood of an additional 10% baseline tariff from the US on EU exports remaining in place.

“We will need to retaliate and rebalance in some key sectors if the US insists on an asymmetrical deal,” the EU’s industry chief, Stephane Sejourne, told Bloomberg this week.

For many in Brussels, the big question for weeks has been how to respond to what they see as US President Donald Trump’s push for an unbalanced deal.

That’s been the backdrop for the commission’s accelerated talks with American counterparts to reach a negotiated solution to the tariff dispute before the July 9 deadline. If not, most European goods face the prospect of a debilitating 50% levy.

But while EU trade chief Maros Sefcovic said that talks have progressed at pace, the Trump administration has continued to insist in closed-door discussions on an agreement that the Europeans view as one-sided favoring Washington.

Many European officials expect that some tariffs will remain, including the 10% baseline. Those sectoral tariffs are based on Trump’s so-called 232 authority, which is expected to be deployed against more industries such as pharmaceuticals and semiconductors.

QuickTake: A Guide to Trade Talks, Trump-Style

One of the sectors hurt by US duties will be the civil aviation industry, and Toulouse-based Airbus can’t be subject to “unfair competition” from Boeing, the French commissioner said, because the European aircraft maker faces the 10% tariff. Airbus is arguably the primary example of the success of the bloc’s industrial cooperation.

“If we don’t rebalance, we would leave some leading sectors unprotected,” Sejourne said.

The EU’s executive arm is already preparing an arsenal featuring not “countermeasures” but “rebalancing” measures.

Sejourne, who’s been on the offensive to protect European interests versus Trump’s industrial charges, made clear that the EU will play smart and act in those sectors where there’s a clear economic interest.

But the commission will need to rally member states into a new reality of higher tariffs imposed by an unpredictable American president who sees Europe as more of an obstacle to his domestic goals than a partner.

Source: Bloomberg Europe

Pakistan and the U.S. have resolved to conclude trade talks next week, the South Asian nation said on Wednesday after a meeting between its Finance Minister Muhammad Aurangzeb and U.S. Commerce Secretary Howard Lutnick.

The negotiations, focused on reciprocal tariffs, are part of a broader push to reset economic ties at a time of shifting geopolitical alignments and Pakistan’s efforts to avoid steep U.S. duties on exports.

“Both sides showed satisfaction on the ongoing negotiations and resolved to conclude the trade negotiations next week,” Pakistan's finance ministry said in a statement, adding that a longer-term strategic and investment partnership is also under discussion.

Pakistan faces a 29% tariff on exports to the U.S. under President Donald Trump’s measures to target countries with large trade surpluses with the U.S.

Pakistan’s surplus was around $3 billion in 2024.

To offset the imbalance and ease tariff pressures, Islamabad has offered to import more U.S. goods, including crude oil, and to open up investment opportunities through concessions for U.S. firms in Pakistan's mining sector.

Earlier this week, the two countries co-hosted a webinar promoting investment in Pakistan’s mineral sector, including the $7 billion Reko Diq copper-gold project.

Senior officials from both governments and U.S. investors discussed public-private partnerships and regulatory reforms.

The U.S. Export-Import Bank is reviewing financing proposals worth $500 million to $1 billion in Reko Diq.

Trump, who hosted Pakistan's army chief Field Marshal Asim Munir at the White House last week, has earlier said trade helped avert a deeper conflict between Pakistan and India.

Source: Yahoo Finance

Following Bitcoin’s drop below the $100,000 mark over the weekend, fresh narratives are surfacing about where the top crypto might be headed next. Despite more than $63 billion flowing into the crypto market in 2024, Bitcoin has only managed a modest 13% gain year-to-date, raising questions about what’s holding back the top cryptocurrency.

According to 10x Research, the usual catalysts such as ETF inflows, stablecoin activity, and corporate accumulation are in play, yet Bitcoin is no longer reacting the way it did during last year’s rally. Unlike the booming reaction in 2024, Bitcoin is now behaving differently, suggesting something deeper is shifting.

Bitcoin Price Prediction Today

Traders Are Shifting Tactics

Instead of sparking a big rally, 10x Research says traders are showing their bullishness in quieter ways. They’re adapting to lower market volatility and putting their money into fewer top coins. This shift in strategy might be slowing down Bitcoin’s short-term gains, even though there’s still plenty of money flowing into the market.

Why the Disconnect?

The report also revisits the Fed’s surprise 50 bps rate cut in September 2024, which was met with skepticism. Bond yields surged, indicating investors weren’t convinced it was the right move. Meanwhile, inflation, which dropped from 3.5% in April 2024 to a stable 2.4%, has remained steady for three straight months. However, the expert’s warnings that tariffs would reignite inflation have so far proven inaccurate.

Meanwhile, unemployment has held steady at 4.2% for nearly a year, defying recession fears. With macro fundamentals stabilizing and the Fed’s tone becoming more dovish, many expected a stronger Bitcoin rally. Yet, the market seems to be waiting for clearer signals.

All Eyes on July CPI and Bitcoin’s Next Move

With inflation steady and liquidity still flowing, all eyes are now on the July 15 CPI report as the next big market catalyst. 10x Research hints that Bitcoin’s next move may depend less on money flowing in and more on how market participants continue to adapt to these changing geopolitical and financial scenarios.

Looking at the current sentiment, Analyst Astronomer suggests the decline may not be over yet, with a possible final dip before the price bounces back. The $97,000 zone is being watched closely as a key level for buyers to re-enter the market.

If support holds, Bitcoin could aim for a rebound toward $110,000. Weekend lows tend to be retested, and with sentiment shifting following a ceasefire deal between Israel and Iran, Bitcoin has already climbed back to $106,000.

This geopolitical development, along with improving market mood, has brought renewed buying interest. The overall outlook remains cautiously bullish, with investors eyeing $97,000 as a solid entry point if another dip happens.

Source: CryptoSlate