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ETF boom continues as investors chase safety, growth and Fed-fueled gains

ETF boom continues as investors chase safety, growth and Fed-fueled gains

CNBC8 hours ago

Frank Holland reports ETF inflows reached $531B YTD, led by quality and growth funds. Investors shift as Fed signals two cuts, tensions rise. S&P 500 Quality ETF saw top inflows despite lagging returns.

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Coinbase shares rise as investors anticipate U.S. stablecoin rules: CNBC Crypto World
Coinbase shares rise as investors anticipate U.S. stablecoin rules: CNBC Crypto World

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Coinbase shares rise as investors anticipate U.S. stablecoin rules: CNBC Crypto World

On today's episode of CNBC Crypto World, bitcoin and ether are little changed as investors assess the Fed's next move on interest rates and President Trump's strategy for the Israel-Iran conflict. Plus, Coinbase rises after the company shuffles its EU hub to Luxembourg and investors await U.S. stablecoin rules. And, Phil George of EarnOS discusses why brands could could look to stablecoins in the future.

Nature of dollar's broad 1H slump means it can extend into 2H
Nature of dollar's broad 1H slump means it can extend into 2H

Bloomberg

time6 minutes ago

  • Bloomberg

Nature of dollar's broad 1H slump means it can extend into 2H

Path to dollar recovery is very narrow The mainly structural nature of the 1H selloff — driven by tariff policies and the associated worsening in global geopolitical and economic expectations and US fiscal considerations — means a sustainable and broad recovery may become feasible if we see a credible softening of, or U-turn in, tariff policies. That's not our central working assumption, but any path toward a multitude of fast and balanced bilateral trade deals would help lift uncertainty, boosting global risk appetite and the dollar. Crucially, at a time when US economic exceptionalism is questioned, confirmed strength in the core data or recovering soft data is the one scenario that would revive dollar bulls in 2H, in our view, though that's not our central scenario for now. Euro appeals as yields don't drive FX for now The euro's strong 1H performance was mainly driven by dollar weakness, but it was broad based and the fiscal stimuli announced by Germany and the EU are further bullish midterm cyclical and structural considerations, though the positive economic impact may not appear in the data before late 4Q or 2026. The expected near-term divergences between the ECB — still dovish — and the Fed — wait-and-see — have led to widening euro-US two-year yield differentials that would, in normal circumstances, give euro bears fresh ammunition. Still, economic and yield factors haven't been driving FX and may be sidelined for now and for as long as structural considerations continue to be key. We hold on to our expected $1.15-$1.20 euro-dollar range into 2H, while euro bears may have options via the euro-sterling channel. Yen: Reasons to be bullish beyond BOJ The yen may be a G-10 winner in allocation strategies at a time when tariff uncertainty has reignited the de-dollarization debate and sparked questioning about US economic strength. This has to be seen in a context in which diversification strategies outside the dollar gain momentum and the yen's allure increases, thanks to a more favorable Japanese economic cycle vs. a decade ago, normalizing BOJ policy and stable institutions. The case for defensive positioning adds to our bullish yen view, and so do valuation and historically low levels. After 1H's dollar-yen decline of 11%, the pair is now sticky near 145, but the domestic (the BOJ trajectory) and international (de-dollarization) trends identified in 1H remain in place, so our 145-140 view for 2H holds for now. Sterling has a domestic, international bullish case Our sterling bull levels have already been reached and we maintain our $1.35-$1.40 sterling-dollar and 0.84-0.82 euro-sterling views into 2H. That's as long as the bullish drivers identified in 1H hold, with pound bulls primed by a better-than-expected economic performance and, just as important, a Bank of England that's resisting dovish temptations and offering yield support. The UK's management of the tariff threat, compared with the EU, gives pound bulls a further reason to shine. The G-10 FX de-dollarization narrative remains a prime bullish driver for sterling, as is the currency's regained appeal in diversification strategies. A sudden and unexpected turn in risk sentiment is the main risk for sterling bulls, given the pound's high-beta status. Franc bull? Yes, but beware the SNB A highly uncertain economic and geopolitical backdrop, and the associated de-dollarization theme, has boosted our defensive FX case this year, with the franc rising almost 10% vs. the dollar and outperforming most others in G-10 diversification strategies. Still, as we flagged on April 7, a strong franc was always going to pose a problem for the SNB, given the stage in the Swiss economic cycle and SNB President Martin Schlegel's remarks on May 6 (see below) validate this assessment, so franc bulls will have to consider the risk of a more interventionist SNB in 2H. Notwithstanding a 10% slide from its January high near 0.92, our 0.80 expected dollar-franc view holds as we consider 2H, while a 0.9250-0.9550 euro-franc range makes sense for as long as risk sentiment remains in relatively good shape. Krone appeals most in commodity FX in 2H In a broadly weaker dollar context and as tariff uncertainty persists, the Canadian dollar remains highly exposed across the G-10. Meanwhile, the Aussie remains attractive on valuation and is under-owned, but it's at the mercy of a late RBA easing cycle and China's economic fortunes. All this implies that the Norwegian krone is the most alluring among G-10 commodity currencies, even after an outstanding 1H gain of more than 11.5% vs. the dollar, given its yield appeal and likely interest in diversification strategies.

Waiting for Mortgage Rates To Drop? That's Just Wishful Thinking
Waiting for Mortgage Rates To Drop? That's Just Wishful Thinking

Yahoo

time14 minutes ago

  • Yahoo

Waiting for Mortgage Rates To Drop? That's Just Wishful Thinking

With average weekly mortgage rates near 7%, many potential homebuyers are sitting on the sidelines waiting — and hoping — for rates to come down in the near future. You might be one of them, thinking that if you just hold out a bit longer that 30-year mortgage will be more affordable. Read Next: Find Out: Unfortunately, there's good reason — a lot of them, actually — to think that's not going to happen. Of course, it might help to remember that, historically, today's mortgage rates are not crazy high. They just feel that way because a mere four and five years ago they were less than half what they are now. But anyone who remembers the early 1980s, when rates hit an unimaginable 16.64%, will tell you 7% isn't too bad. Still, lower is better, so let's explore the reasons better mortgage rates might not be on the horizon anytime soon. It's no secret that President Donald Trump and Federal Reserve Chair Jerome Powell have been at odds over the past several months. Trump wants the Fed to lower interest rates. And while it's true that this might have the effect of lowering mortgage rates, it's not a guarantee. In fact, the Fed has no direct effect on mortgage rates, only an indirect one through influencing investor expectations, said Patricia Watson, a professor in the Dr. Wallace E. Boston School of Business at American Public University who focuses on real estate. And as of June 16, CME Group's FedWatch gave the chances of the Fed keeping rates the same in this week's meeting at 99.08%. Not great odds for homebuyers. If you want to see where interest rates might be heading, a better place to check is the 10-year U.S. Treasury Note, said Watson. This is considered a standard for the 30-year fixed-rate mortgage. 'When the yield on the 10-year Treasury note rises, mortgage rates usually follow. In July 2020, the yield for this bond was just under one percent. Now it's just under 4.5 percent, a large increase,' Watson said. So mortgage rates are higher too. In May, Moody's Ratings downgraded the US ratings from Aaa to Aa1. This might not sound like a big deal, but it is. At least in global financial markets and, therefore, in mortgage rates, said Watson. This ties back to the Treasury Notes. Because this signals to the world that lending to the U.S. government — through those Treasury Notes — is considered a bit riskier, investors want higher yields. That drives up the 10-year Treasury Note rate and keeps mortgage rates high, explained Watson. These all feed into an uncertainty about the future of the American economy, and that can keep mortgage rates unchanged, Watson said. For instance, one of the ways the Fed combats inflation is through raising interest rates, making borrowing more expensive and therefore, cooling major purchases. This lowers spending, demand and, ideally, slows inflation. But if inflationary policies, such as tariffs, are implemented, the Fed becomes hesitant to lower rates, especially since lowering rates can itself be inflationary. In a time of economic uncertainty, one thing is certain, said Watson: Don't expect mortgage rates to be as low as they were in 2020 to 2022 for a very long time, if ever in our lifetime. But it's equally true that, while home prices might fluctuate some in the short-term, they go up in the long-term. So, while you might need to more carefully weigh whether you can afford a home, it's still considered by most to be one of the best wealth-building investments you can make. More From GOBankingRates 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses This article originally appeared on Waiting for Mortgage Rates To Drop? That's Just Wishful Thinking Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

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