US Treasuries Jump On Report Trump Likely To Fire Powell

Central Bank

Economic

Summary:

Short-maturity US Treasuries jumped and the dollar plunged after a White House official said President Donald Trump is likely to fire the chief of the Federal Reserve soon.

Yields on two-year notes, which are most sensitive to changes in Fed monetary policy, fell seven basis points to about 3.87% as traders bet that Trump would choose a more dovish successor to Chair Jerome Powell. Powell has signaled the need to monitor the impact of Trump’s tariffs on the economy before lowering interest rates further.

“US rates appear to be coming lower no matter what, the US curve will steepen and the dollar will continue weakening, especially vs those with central banks that will not follow the Fed,” said Alvaro Vivanco, head of strategy at TJM FX.

The yield gap between 5- and 30-year Treasuries rose to the highest since 2021 on the news. Meanwhile, the Bloomberg Dollar Spot Index sold off, falling the most since late June on an intraday basis. All G-10 currencies advanced, led by the yen, which rose more than 1% at one point before paring gains.

In Treasuries, the steepening move extended as traders priced in a greater chance that the Fed will cut rates as soon as September.

Source: Bloomberg Europe

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James Whitman

Forex

Technical Analysis

GBPUSD technicals

The GBPUSD is joining the dollar selling also the news that Trump is set to fire Fed chair Powell. The low price for the day reached into a swing area between 1.33607 and 1.33784.

The news has helped to push the price up sharply higher and up toward the 50% midpoint of the move higher from the May 2024 low to the high price reached on July 1, and the 100 hour moving average. Both those levels come near 1.3464. Move and stay above those levels would open the door for further upside momentum.

The New York Times is now reporting that Trump has drafted a letter to chair Powell. He apparently showed the letter to around a dozen GOP members in the White House late yesterday.

The yield curve is steepening with the 2-year yield down -8.6 basis point at 3872%. The 30-year yield is back above 5% at 5.055% up 4.0 basis points.

US stocks are not taking the news that well – at least initially. The NASDAQ index is down -89 points or -0.44%. The S&P index is down -26 points or -0.41%.

Source: ForexLive

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Adam

Commodity

After more than a month of sideways movement, silver looks ready to resume its upward trend. The next step for bulls is to break above the $39 per ounce mark, setting a new high for this bull market. Even though silver is already up around 30% this year, there is still room for more gains.

Yesterday’s stronger-than-expected US inflation data gave the US Dollar a boost, which caused some pullback in silver prices. But the bigger drivers—like ongoing worries about the tariff war—are likely to keep the uptrend intact. For now, buyers are aiming to push prices past the $40 level.

Can Silver Still Catch Up to Its Record Highs?

Unlike gold, which keeps setting new highs in dollar terms, silver still has a long way to go to reach similar levels in this bull market. So the key question is—can silver catch up in the next few months?

That would be a tough climb and would depend on two major developments:

A Dovish Fed: The Federal Reserve would need to cut interest rates more aggressively, weakening the US dollar. This usually helps precious metals like silver. But for this to happen, there would likely need to be a deep recession and a sharp drop in US employment.

Tariffs on Silver: The US-Mexico trade conflict would have to escalate and start including silver in the list of taxed goods. Right now, silver is not affected, but with President Donald Trump’s unpredictable policies, investors cannot rule out a change. Since Mexico is the world’s largest silver producer, new tariffs could be a strong trigger for price increases.

Inflation Surprise Clouds Rate Cut Hopes

Yesterday’s US inflation data gave mixed signals. While the monthly core reading came in below expectations, the annual core CPI rose 2.7%—slightly above forecasts. This surprise was enough to strengthen the US dollar.

These readings do not give the Fed any reason to shift its current stance. This means the most hawkish scenario—no interest rate cuts this year—remains a real possibility. In such a policy environment, a sharp rise in silver prices toward historic highs appears very unlikely by year-end.

Silver Technical Analysis

The latest inflation data is now the main driver behind the market rebound, largely due to the strengthening of the US dollar. For silver, the first target for sellers is the area where the upward trend line meets the support level, around $37.50 per ounce.

Silver: Can Tariff Fears Offset US Dollar Pressure and Keep the $40 Target Alive?_1

If the $37.50 support breaks, it could pave the way for a further decline toward the next key support level near $35.50 per ounce, which has been tested multiple times. On the other hand, for buyers, the main target remains the round-number resistance at $40.

source :investing

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James Whitman

Central Bank

Political

President Trump on Tuesday told reporters that Jerome Powell’s handling of a $2.5 billion renovation of the Federal Reserve headquarters “sort of is” a fireable offense, and reportedly asked some GOP lawmakers Tuesday night if he should remove the central bank chairman.

CBS News reported Wednesday that Trump posed the question during a meeting in the Oval Office with House GOP members; that some lawmakers agreed; and several indicated he will do it.

Trump's latest comments and the new CBS report raise new questions about whether the president may in fact seek to oust the Fed chair, a move that would surely lead to a legal war with Powell, who has argued he can't be removed by law.

The president also appeared in his latest comments to narrow his choices to replace Powell. Treasury Secretary Scott Bessent is an "option," but not the top choice, “because I like the job he is doing,” he said.

The Washington Post and Bloomberg reported this week that National Economic Council Director Kevin Hassett is rising as an early front-runner in the race to replace Powell, although former Fed governor Kevin Warsh is also under consideration. Fed governor Christopher Waller is another possibility.

Bessent, though, is “probably not that much of an option," Trump said Tuesday, citing what he views as his good performance as Treasury secretary.

Trump has been hammering Powell for months over what Trump viewed as a refusal to ease monetary policy for political and personal reasons, referring to Powell publicly as “dumb,” a numbskull,” a “stubborn mule,” “stupid,” a “moron,” and a “fool.”

Trump nominated Powell for the Fed chair seat during his first administration, and his current term is scheduled to run until May of 2026.

Trump’s allies in recent weeks have used another tactic to turn up the pressure on Powell: They have invoked a $2.5 billion renovation of the Fed’s headquarters as a way to question the chair’s management of the institution and whether he told Congress the truth about the project during testimony in June.

Trump said Tuesday that "the one thing I wouldn't have guessed is he would be spending two and a half million dollars to build a little extension onto the Fed."

When asked if it was a fireable offense, Trump said, "I think it sort of is, because if you look at his testimony ... he's not talking about the problem. It's a big problem."

Source: Yahoo Finance

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Adam

Economic

The big story

There’s a murmur of excitement in China’s venture capital circles these days: foreign investors are starting to return with U.S. dollars.

It’s a result of DeepSeek’s AI disruption, coupled with a buoyant Hong Kong IPO market on track to surpass Wall Street this year as the world’s largest by money raised. Beijing’s signals to support businesses in recent months have also helped.

The Hang Seng Index’s surge of over 20% so far this year reflects near-term optimism. Another sign comes from word of Chinese venture capital firms raising U.S. dollar-denominated funds again, after a dry spell in which the VCs had to turn to local investors with Chinese yuan funds.

Beijing-based BAI Capital said it started raising for a new $800 million fund in February and plans to close the initial round in September. The firm is supported by German global media conglomerate Bertelsmann Group.

BAI said it’s seen “strong interest” for the U.S. dollar-denominated fund, which it will then use to invest in China-based companies. To date, the firm has already invested in 10 companies that plan to go public in the next one to two years.

Future Capital Discovery Fund, an early backer of high-flying electric car startup Li Auto , told me it raised a record $210 million for a U.S. dollar-denominated flagship fund in the second half of last year.

“Once there is a fundraising window, we must quickly seize the opportunity to raise funds,” Mingming Huang, founding partner at Beijing-based Future Capital, said in Chinese, translated by CNBC. “This is very different from the long-standing practice of raising U.S. dollars from the market every few years.”

“Now we need to be very sensitive to macro trends, especially the direction of relations between major economies,” he said. The firm, which counts investors including sovereign wealth funds and endowments from the Middle East, U.S., Europe, Japan and Southeast Asia, has plans to deploy capital for AI agents and hardware.

But it’s been a tough few years for China VCs and their limited partners.

In the VC world, a firm raises money from a range of “limited partners,” which include sovereign wealth funds, pension funds, university endowments and family offices. While getting paid to manage the fund, the VC then chooses startups to back, reaping a reward from the companies’ IPOs that is shared with the limited partners.

The fallout around Chinese ride-hailing company Didi’s New York IPO in June 2021, on the eve of the ruling Chinese Communist Party’s 100th anniversary – despite multiple warnings from Beijing about data privacy breaches – did not sit well with regulators on both sides of the ocean. Didi was backed by a long list of prominent investors across numerous funding rounds, including , and Sequoia Capital.

China would later raise the bar for its companies wanting to list overseas, while Washington ramped up its scrutiny of U.S. capital heading to China, dampening fundraising activity on the mainland, particularly for cross-border investments.

Notably, Sequoia Capital China split off from its U.S. parent in 2023 and rebranded under HSG. It did not respond to a request for comment about their latest U.S. dollar fundraising plans. Other VCs that have spun off or restructured their China arms include GGV Capital, which became Granite Asia, and California-based Matrix, which rebranded its Chinese operations as MPCi last year.

An eye on ByteDance

Not everything is the same as it was in the pre-Didi IPO years.

Rather than giving money to a venture capital firm, many limited partners based in Europe, the Middle East and Asia prefer to directly buy ownership stakes in private companies such as Chinese internet giants ByteDance and Xiaohongshu, said Hope Xu, a venture capitalist. She left Source Code Capital last year to start her own firm, called Density 590, focusing on such deals, known as secondaries, which include single-asset sales and stakes in funds.

Even though the Beijing-based TikTok parent isn’t publicly listed, the demand for its shares is so high that they are essentially as easy to liquidate, or sell, as they would be on a publicly listed exchange, she said. While the sellers tend to mostly come from the U.S. and Asia, Xu said the buyers typically come from the EU, the Middle East or Asia.

It’s a big opportunity for returns.

ByteDance’s valuation has surged from $245 billion at the start of this year to $340 billion, she said Tuesday, noting that investors are starting to accept the uncertainty of the U.S.-TikTok divestiture.

ByteDance declined to comment on its valuation.

The company has become a quiet force in China’s internet realm. Besides owning a popular Chinese TikTok equivalent called Douyin — which surpassed JD.com last year to become the second-largest ecommerce platform by gross sales — ByteDance has also developed a popular AI chatbot called Doubao, along with an AI agent platform named Coze.

Xu pointed out that for tech investments such as AI and robotics, the resources and capital needed are vast, making it difficult for smaller startups. Buying a stake in a big company, such as ByteDance, with its diverse product lines, is essentially like buying an AI exchange-traded fund, she said.

For example, Tencent is not only developing its own AI models and applications, but also investing in AI startups. It reported a nearly five-fold surge in profits from its business associates and joint ventures last year, rising from 5.8 billion yuan to 25.2 billion yuan over 12 months, according to the company’s annual report.

Global ambitions

The China VC world is also no longer just focused on the domestic market.

Citing the macroeconomic environment and tech trends, BAI Capital said its investments will be split between local and overseas startups. Half of its funds will go towards China-based companies looking to expand worldwide in fintech, entertainment, AI and supply chains, while the other half of its funds will focus on consumer, healthcare and technology opportunities in China, BAI said.

Since 2019, BAI said it has invested in multiple rounds in Stori, a digital bank in Mexico with 3.6 million credit card users and 2.4 million depositors. “We believe Stori’s success is not an isolated case.”

The question is how long these VCs and their limited partners can remain enthused. The Hong Kong Stock Exchange last week proudly announced its busiest day for IPOs and ETF launches to date: with six gongs on stage.

Top TV picks on CNBC

James Peng, CEO of autonomous driving company Pony AI, talks about Uber founder Travis Kalanick’s possible interest in acquiring the company’s US operations.

Louise Loo, head of Asia economics at Oxford Economics says that while China’s economic growth is likely to slow in the second half of 2025 due to the ‘spectacular growth engine’ of exports ceasing to provide the same impetus, there is a silver lining in the fact that demand for goods from China’s advanced manufacturing sector are not easily substitutable and would remain relatively resilient despite tariffs headwinds.

Angela Stent, senior fellow at Brookings Institution, says Russian President Vladimir Putin counted on Chinese President Xi Jinping’s support when he invaded Ukraine – and continues to count on Beijing’s economic support and diplomatic support on a global stage.

Need to know

China’s economy locks in a solid first half of the year. But steeper declines in real estate investment and the worst performance in restaurant spending since the pandemic add to growing concerns about whether the economy can hold its current growth pace for the rest of the year.

Nvidia to resume chip exports to China. Citing assurances from the U.S. government, Nvidia

said Tuesday it hopes to resume sales of its H20 GPUs in China. Separately, Alibaba-backed startup Moonshot released its new Kimi K2 AI model late on Friday, which claims to outperform OpenAI’s ChatGPT and Anthropic’s Claude on certain metrics, and has garnered fairly positive feedback for its coding capabilities.

U.S.-China relations remain tense. Wang Yi, China’s most senior diplomat, had a “constructive and pragmatic” meeting with U.S. Secretary of State Marco Rubio on the sidelines of a conference in Malaysia, the U.S. said Friday. China’s readout echoed the tone, including an agreement to explore cooperation while managing differences.

In the markets

Mainland China and Hong Kong stocks are mixed on Wednesday amid mixed trading in the region, as investors assessed U.S. President Donald Trump’s statement of having reached a preliminary trade deal with Indonesia.

Mainland China’s CSI 300 was down 0.35%, while Hong Kong’s Hang Seng Index — which includes major Chinese companies — had gained 0.15% as of 1:12 p.m. local time. The mainland benchmark is up around 1.8% year to date, data from LSEG showed.

Source: cnbc

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

Risk Warnings and Disclaimers

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Warren Takunda

Cryptocurrency

Key takeaways:

Bitcoin hit $122,000 all-time high on July 14, but onchain data shows no signs of overheating, suggesting more growth potential in 2025.

BTC price resistance at $124,000-$136,000 remains the main barrier for now.

Bitcoin analysts say that the BTC market is not overheated despite new all-time highs of around $123,000 earlier this week.

Data from Cointelegraph Markets Pro and TradingView shows that Bitcoin price action has established a new range in lower timeframes, and market observers have key support levels in their sights.

Bitcoin market not overheated yet

For CryptoQuant analyst Axel Adler Jr., Bitcoin has not yet reached its peak range.

The analyst shared a chart showing the absence of a peak signal, which typically appears at major market tops.

The Bitcoin peak signal is a metric that indicates that the market is overheated and a corrective phase is becoming likely.

It appears when “the combined normalized market to realized price index and 30 day/ 365 day value days destroyed ratio score reaches or exceeds 1,” Adler Jr. explained, adding:

“The Peak Signal only appears at major market tops, and it hasn’t shown up this time, suggesting we’re not at a peak yet.” Bitcoin 'Not at Peak Yet': Watch These BTC Price Levels Next_1

Bitcoin 'Not at Peak Yet': Watch These BTC Price Levels Next_1

Bitcoin peak signal. Source: CryptoQuant

Similarly, Bitcoin realized Cap-UTXO Age Bands, a metric that shows the distribution of realized cap of a specified age cohort, also suggests that BTC “hasn’t reached an overheated state,” according to CryptoQuant Crypto Dan.

In March 2024 and December 2024, when Bitcoin was at peak highs, the percentage of the realized cap held by the 1-day to 1-week UTXO age group was as high as 14%. This percentage is currently around 5% despite Bitcoin’s recent all-time highs.

In a Wednesday analysis, Crypto Dan wrote:

“Despite the price rising even higher, the fact that overheating has significantly decreased compared to previous short-term peaks suggests that Bitcoin could continue to break all-time highs and rise significantly in the second half of 2025, leaving strong potential for growth.”

Bitcoin: Realized Cap - UTXO age bands (%). Source: CryptoQuant

Cointelegraph also reported that Bitcoin’s MVRV Z-Score remains well below historical peak levels, signaling BTC price can climb further.

Onchain data reveals key Bitcoin price levels to watch

Looking at Bitcoin’s short-term holder (STH) cost basis, CryptoQuant analyst Crazzyblockk outlines key levels that traders should focus on.

This observation comes from Bitcoin's realized price model. It uses the average purchase prices of STHs, including their standard deviations, to spot important areas where buyers are active and prices tend to move.

On the upside, the first major resistance sits at $124,000, representing the average cost basis of STHs pushed one standard deviation higher.

“Historically, this band often coincides with profit-taking and local tops,” Crazzyblockk explained.

The upper resistance is at $136,000; the average cost basis of investors who have held BTC for less than 30 days is pushed one standard deviation higher. This is “the most aggressive cohort,” the analyst said, adding:

“When BTC pushes into this area, the market is typically in overbought conditions with excessive unrealized profit for new buyers.”

Bitcoin STH cost basis. Source: CryptoQuant

On the downside, traders should keep an eye on $113,000 — matching the 0.5 standard deviation above the STH realized price; $111,000 — the average cost basis of investors who acquired BTC in the past month; and $101,000, the baseline STH realized price.

$101,000 is the “most critical support for Bitcoin’s medium-term bullish structure,” the analyst said.

“Historically, staying above this zone signals strongholder conviction and trend continuation.”

The market value realized value (MVRV) metric, which shows whether the asset is overvalued or undervalued, suggests that BTC price still has more room for further expansion before the extreme level around $124,000, marking a key point of resistance. Bitcoin 'Not at Peak Yet': Watch These BTC Price Levels Next_4

Bitcoin 'Not at Peak Yet': Watch These BTC Price Levels Next_4

Bitcoin: MVRV extreme deviation pricing bands. Source: Glassnode

On the downside, a key area of interest sits between $113,700 and $115,300, a zone aligned with the 200-day EMA, which offers dynamic support. The next important level below that is $107,500, the +0.5 STD MVRV band.

As Cointelegraph reported, Bitcoin must reclaim the $119,250–$120,700 zone to resume its bullish momentum and aim for new highs above $123,000.

Source: Cointelegraph

Risk Warnings and Disclaimers

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Adam

Economic

Following the hotter-than-expected headline CPI report, the 30-year Treasury yield closed at 5.02%. The yield appears to have decisively broken above key resistance at 4.97%, setting the stage for a potential retest of the mid-May highs around 5.15%. And frankly, given current momentum, there’s no obvious reason it couldn’t push even higher.

Bond Bears and US Dollar Bulls Lead the Charge as Inflation Expectations Surge_1

The 10-year rate is also now around 4.5%, and it is at a point where it could be much higher, with the potential to rise to around 4.8%.

Bond Bears and US Dollar Bulls Lead the Charge as Inflation Expectations Surge_2

Rates are going up because inflation expectations are rising, and the cause-and-effect relationship here is as straightforward as one can get.

Bond Bears and US Dollar Bulls Lead the Charge as Inflation Expectations Surge_3

Meanwhile, the 10/2 is so close to breaking out. The signs are right there.

Bond Bears and US Dollar Bulls Lead the Charge as Inflation Expectations Surge_4

The dollar made a notable move higher yesterday, and it appears to have broken out of its downtrend, potentially paving the way for further rise.

Bond Bears and US Dollar Bulls Lead the Charge as Inflation Expectations Surge_5

Meta still has 2b top in place, and yesterday it closed on support at $710. If that support breaks, the neck stop is $680, and then we can start thinking about something much bigger on the downside.

Bond Bears and US Dollar Bulls Lead the Charge as Inflation Expectations Surge_6

Stocks finished mostly lower yesterday, and it could have been far worse if not for Nvidia. The S&P 500 declined by 40 bps, while the equal-weight RSP fell sharply by 1.4%.

The S&P 500 futures closed precisely at their 10-day exponential moving average. Notably, trading volume picked up slightly, reaching the 20-day moving average. The critical question now is whether sellers return today to drive prices lower, and given how thin volumes have been over the past month, it likely won’t take much to tip the scales.