The US dollar fell to a 12-year low. Bitcoin lost 10% of its value during the day

Bitcoin fell 10% to below 53,000 on Monday, hitting a more than five-month low, as rising fears of a US recession prompted investors to shed risky assets, including digital currencies, stocks, commodities, and risk-sensitive currencies. The moves came amid weak US jobs data, which heightened fears that the Federal Reserve may already be too late to cut interest rates as the US economy may already be entering recession.

ECB official Stournaras emphasized that inflation could fall below the 2% target due to problems in the Eurozone economy. As for the data, Eurozone annual inflation unexpectedly accelerated to 2.6% in July, but services inflation fell for the first time in three months. In addition, preliminary estimates suggest that the Eurozone economy grew 0.3% faster than expected in Q2, driven by growth in France, Italy, and Spain. On the other hand, Germany’s economy unexpectedly contracted.

WTI crude oil prices fell to $73 a barrel on Monday, declining for the third consecutive session as fears of recession in the US, the world’s top oil consumer, outweighed supply risks caused by geopolitical tensions in the Middle East. Markets are also watching the reaction of Iran, which vowed to avenge the assassination of Hamas leader Ismail Haniyeh after an airstrike in Tehran killed a top Hezbollah commander.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) fell by 5.85%, China’s FTSE China A50 (CHA50) declined 0.86%, Hong Kong’s Hang Seng (HK50) lost 2.08% over 5 trading days, while Australia’s ASX 200 (AU200) was positive 0.28%.

In Asia, investors await the Reserve Bank of Australia’s (RBA) interest rate decision on Tuesday, where a rate hold is widely expected. The probability of an RBA rate cut in November is around 75%, much earlier than previous estimates that suggested a rate cut in April next year. The Melbourne Institute’s monthly inflation gauge rose 0.4% in July 2024 after rising 0.3% in the previous two months. It was the fifth straight month of growth and the sharpest reading since December last year.

The overall Caixin China PMI fell to 51.2 in July 2024 from June’s reading of 52.8, indicating the lowest since last October and marking the ninth month of expansion in sector activity.