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China Trade Balance July 2025
China still exporting at full speed ahead of a final tariff deal.
Bank of England Cuts Rates 25bps
The Monetary Policy Committee (MPC) cut the Bank Rate by 0.25 percentage points, lowering it from 4.25% to 4.00%, marking the fifth rate cut since August 2024.
Vote Breakdown
The decision passed by a tight 5–4 majority, requiring an unprecedented second round of voting in the MPC’s history.
Economic Context & Rationale
The MPC cited a slowing UK economy, with GDP contraction in recent months and rising unemployment (~4.7%).
Inflation remains elevated at 3.6%, above the Bank’s 2% target. The MPC warned of further upward pressure—possibly pushing inflation to 4% in September—due to factors like food, energy, wage pressures, and new cost burdens (e.g., packaging/recycling charges).
The Bank reaffirmed its commitment to a “gradual and cautious” path for further rate reductions, mindful of persistent inflation risks.
Market Reaction
The pound sterling strengthened, two-year gilt yields climbed, and the FTSE 100 dropped modestly (~0.7%) following the announcement.
30 Year Japanese Government Bond Auction
Yield came in at 3.089% , compared with the previous value of 2.808%.
Context & Interpretation
That 3.089% yield represents a notable rise from previous auctions — one of the more significant increases observed in this series.
A rising yield typically indicates a decrease in bond prices, which can reflect lower demand or shifting expectations about inflation or future interest rates.
Surprisingly large contraction in German Industrial Production.
Germany Industrial Production June 2025
US 30 Year Bond Auction
The U.S. Treasury sold $25 billion of 30‑year bonds at a yield of 4.813%, slightly above the pre‑auction yield—indicative of lower investor demand.
Yields spiked right after the sale, reaching 4.829%, signalling a decline in bond prices as market participants demanded higher compensation.
This came in the context of three consecutive weak auctions during the week—for 3‑year, 10‑year, and now 30‑year maturities—raising concerns about investor appetite across the curve.
Notably, primary dealers accounted for 17.5% of the purchase— the highest such share since August 2024—while indirect bidders (like foreign central banks) and direct bidders (e.g., pension funds) both participated at below‑average levels.
Only the NASDAQ keeping equities afloat.
US Equities
BOJ may be behind the curve on inflation risk, government council member says [Reuters]
BTC at resistance as equities stall and bond yields rise further.
Gold's 3rd attempt at breaking higher to an all time high.
The USD, via DXY can't get a bid even in quiet markets. Needs to hold over 96.60 to attempt to move higher.
S&P still stuck below resistance.
Old Lady cuts, yields move higher. Trump should be prepared for a negative reaction when the FED finally caves.
UK 10 Year Government Bond Yield Daily