Norges Bank Increases Bitcoin Exposure in 2Q — Market Talk

0852 ET - The most interesting detail of the latest 13F filing from the U.S. Securities and Exchange Commission is that the Norges Bank, Norway's central bank, increased its exposure to bitcoin in the second quarter, Standard Chartered's Geoff Kendrick says in a note. Norges Bank bought shares in bitcoin treasury companies Strategy, formerly known as Microstrategy, and Metaplanet, he says. "In the second quarter, they increased their bitcoin equivalent exposure from 6,200 to 11,400 bitcoins, an 83% increase." This position remains almost entirely in Strategy, although Norges did add a small bitcoin equivalent position in Metaplanet. (renae.dyer@wsj.com)

0850 ET - Euro-denominated investment-grade bonds remain stable despite uncertainty around the eurozone's economic outlook, LBBW credit analysts say in a note. Credit spreads on euro investment-grade bonds tightened further this week even as Germany's ZEW economic sentiment index showed a noticeable dip, the analysts say. Euro investment-grade bonds look more appealing than German government bonds, LBBW says. "Despite our concerns about the continuing uncertainty factors, we still consider euro investment-grade bonds to be a more lucrative alternative to Bunds." Ten-year Bund yields rise to a three-week high of 2.758%, according to LSEG. (miriam.mukuru@wsj.com)

0735 ET - The prospect of the Bank of England sticking to a cautious stance on interest-rate cuts should support sterling over the rest of 2025, Ebury strategist Matthew Ryan says in a note. The U.K. economy showed surprise resilience in the second quarter, he says. Data Thursday showed stronger-than-expected 0.3% economic growth. This should ease pressure on the BOE to continue cutting rates, with markets now bracing for a pause in policy easing at upcoming meetings in September and December, Ryan says. Sterling rises 0.2% to $1.3563 against a weaker dollar. It falls versus the euro, which is last up 0.2% to 0.8618 pounds. (renae.dyer@wsj.com)

0709 ET - The cost of euro junk bond default protection declines to its lowest level since January 2022 as risk appetite dominates global markets. Prospects of the U.S. Federal Reserving cutting interest rates in September and expectations of a favorable outcome from the meeting between the U.S. and the Russian President on Friday are fuelling market optimism. "European markets are gaining traction ahead a of a key meeting between Trump and Putin in Alaska, raising hopes of a potential end to the [Ukraine-Russia] war," Rostro's Joshua Mahony says in a note. The iTraxx Europe Crossover index, which tracks euro junk bond credit default swaps, declines 2 basis points to 259bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)

0645 ET - Norway's upcoming economic data will be key for determining the timing of the next interest-rate cut and therefore the Norwegian krone's performance, Commerzbank's Antje Praefcke says in a note. The Norges Bank left rates unchanged Thursday. It said restrictive policy is still needed but it was appropriate to continue with the "cautious normalization" of rates, indicating further rate cuts. This reference to restrictive policy could be interpreted as positive for the krone but the decision looks neutral for the currency, Praefce says. "Now it all depends on the data." Data will determine whether a rate cut follows in September when new forecasts are released or later in the year, she says. The euro rises 0.1% to 11.8991 krone. (renae.dyer@wsj.com)

0603 ET - Copper prices fall, with LME three-month copper sliding 0.2% to $9,757.0 a metric ton. Higher U.S. reciprocal tariffs are likely to prevent any meaningful recovery in global manufacturing this year, Citi analysts say. Global manufacturing sentiment eased in July after a short-lived June recovery. Meanwhile, U.S. import levies are likely to stay a headwind, the analysts write in a note. Still, large U.S. copper inventories, built up to frontload potential tariffs, are likely to unwind more slowly than previously expected. Besides, expectations for U.S. dollar weakness could persist over the second half of the year, helping cushion downward movements, Citi adds. A weaker dollar makes it cheaper for international purchasers to buy dollar-denominated goods. Citi now sees copper prices at $9,200 a ton over the next three months, compared with prior expectations of $8,800 a ton. (joseph.hoppe@wsj.com)

0600 ET - Eurozone government bonds could perform worse than their U.S. peers, causing yields to rise, due to increased expectations of the U.S. Federal Reserve resuming interest-rate cuts soon, ING's Benjamin Schroder says. By contrast, the European Central Bank has little scope, if any, to cut rates further. "The Fed and the European Central Bank stories are indeed diverging with the ECB seen pausing, perhaps delivering one more [interest rate] cut if at all," he says. The 10-year Bund yield rises 4 basis points to last trade at 2.747%, Tradeweb data show. The 10-year U.S. Treasury yield trades flat at 4.291%. (miriam.mukuru@wsj.com)

0559 ET - The dollar could fall if there is any progress towards a Ukraine-Russia ceasefire and geopolitical risks ebb, ING analyst Francesco Pesole says in a note. President Trump and Russian President Vladimir Putin are set to meet in Alaska later. The most positive scenario for the dollar would be if the meeting fails to yield any results, he says. This reflects the dollar's safe-haven role and the U.S. being a major energy producer. For now, however, the dollar is more driven by U.S. data, he says. Markets scaled back interest-rate cut bets after higher-than-expected U.S. wholesale inflation Thursday. If this trend continues this could offset the negative impact of any ceasefire agreement, he says. The DXY dollar index falls 0.4% to 97.855. (renae.dyer@wsj.com)

0551 ET - The need to refinance maturing bonds and dividend payments are causing increased issuance of European junk bonds, Barclays' Soren Willemann and Srijan Karn say in a note. European high-yield bond issuance this year has surpassed 80 billion euro ($93 billion), the second highest issuance on record at this time of the year, the credit strategists say. Refinancing supply forms 70% of the total supply, "much higher than historical norms around 55%, and near the highest seen historically," the strategists say. High-yield bonds issuance to pay dividends is also stronger than usual, they say. (miriam.mukuru@wsj.com)

0515 ET - Yields on eurozone government bonds climb following Thurday's stronger-than-expected U.S. producer price index data. This caused investors to reduce expectations for the Federal Reserve to cut interest rates in September. "The PPI release prompted a notable shift in market sentiment," Deutsche Bank Research analysts say in a note. A U.S. rate cut in September is no longer fully priced in, unlike before the PPI data release, the analysts say. Eurozone yields are also pushed higher by the expectation that the European Central Bank will only cut rates once more or possibly not at all. The 10-year Bund yield rises nearly 3 basis points to 2.735%, Tradeweb data show. (miriam.mukuru@wsj.com)

0513 ET - Malaysia's 2H GDP growth could ease in 2H from 4.4% in 1H as front-loading fades and tariff effects begin to weigh, says RHB senior economist Chin Yee Sian, tipping 2H growth at 4.2%. However, any slowdown is likely to be cushioned by clearer U.S. tariff guidance, easing U.S.-China trade tensions, domestic stimulus, continued robust consumer spending and investment strength, she says. Chin expects Bank Negara to keep the policy rate unchanged at 2.75% through year-end, assuming growth remains within official forecasts and inflation stays subdued. BNM recently revised its 2025 growth forecast to 4.0%-4.8%, from 4.5%-5.5% previously. RHB maintains its 2025 growth forecast at 4.2%, with upside potential for 4.4%. (yingxian.wong@wsj.com)

0421 ET - Issuance of European junk bonds so far this year is close to a record-high level, Barclays' Soren Willemann and Srijan Karn say in a note. Supply so far this year has surpassed 80 billion euro, the second highest-level on record in the European junk bond market, the credit strategists say. "Following a lacklustre start to the year, primary markets for pan-European high-yield bonds have been very active in the past few months," they say. The heavy supply has revived the European high-yield bonds market, reversing the previous trend of a shrinking market, the strategists say. (miriam.mukuru@wsj.com)