Macro

Dovish remarks from Fed Governor Christopher Waller fueled a sharp rise across the crypto market on Thursday. Several bitcoin-linked instruments broke through key resistance levels. Risk appetite rebounded noticeably as investor concerns over the Fed’s policy path eased. The dovish signal added upside momentum to risk assets.

Bank of England chief economist Huw Pill reiterated his concerns about holding interest rates steady, arguing that inflation risks tied to the energy crisis in the Middle East should be contained with a rate increase. He said he was uncomfortable with a “wait-and-see” approach on the Monetary Policy Committee and noted he was one of two members backing a hike in July. Pill added that a move higher would not necessarily mark the start of a prolonged, aggressive tightening cycle.

Decentralized stablecoin USDD’s supply has increased from about $1.1B to about $1.5B, with total collateral value of about $2.24B. USDD 2.0 has launched overcollateralized borrowing vaults on Ethereum backed by ETH and WBTC, with six vaults and a combined $400M debt ceiling. ETH vaults allow up to 76.9% max LTV with 4.25%–5% stability fees, while WBTC vaults allow up to 74.1% max LTV with 4%–4.5% stability fees; both carry a 13% liquidation penalty. USDD minted from vaults can be swapped via the PSM 1:1 into USDT or USDC, providing a new stablecoin liquidity route for Ethereum DeFi.

After Australia posted unexpectedly strong national accounts data, macro research firm TD Securities revised its rate outlook and said the Reserve Bank of Australia could raise rates by 25 basis points at its September meeting, taking the cash rate to 4.60%. The move would add A$92 a month to repayments on a typical A$600,000 mortgage, lifting this year’s total monthly increase to A$364. Investors are concerned stronger growth could intensify inflation pressures and force the central bank to tighten policy sooner than expected.

ECB Governing Council member and Central Bank of Ireland Governor Gabriel Makhlouf said he is uneasy that euro zone inflation is staying above 3% while growth has been slightly stronger than expected. He argued that even if the deposit rate rises to 2.5%, it would not restrain economic activity. His remarks suggest the ECB may need to keep raising interest rates.

Australia’s annual GDP growth eased to 2.1% in the year to June 30, beating market expectations of 1.8% and the Reserve Bank’s August forecast of 1.9%. Productivity fell 0.2% in the last financial year, with output per hour worked shrinking. Treasurer Jim Chalmers said Australia is matching US growth despite a higher 4.35% cash rate versus the US 3.75% key rate. Markets are pricing in the risk of another RBA rate increase within less than four weeks.

New Zealand’s central bank raised its key interest rate for a second consecutive meeting. The move aims to shift policy settings toward a less stimulatory stance to head off inflationary pressures. It marks a further tightening of the country’s monetary policy.

The Reserve Bank of New Zealand lifted the official cash rate by 25 basis points to 2.75% from 2.5%. The move was widely expected by the market.

Australia’s statistics agency reported that GDP rose 0.4% q/q in the second quarter, above the market forecast of 0.3%. The prior reading was 0.3%. The slight pickup in growth suggests resilient domestic demand, while cost pressures persist and markets are watching the RBA’s next policy steps.

Australia’s economy expanded 0.4% quarter-on-quarter in the second quarter, beating most economists’ expectations and reinforcing market bets on a near-term Reserve Bank of Australia rate increase. Traders lifted the implied probability of a September hike to about 70% and fully priced in at least one increase by November, according to Bloomberg analysis of futures pricing. Market expectations for the cash-rate peak rose to 4.8%.