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TRADING TIP
Tip: There is a saying in trading, It’s the reaction to news more than the news itself that matters.
This proved true again today when the FX market reacted to dovish comments from Fed’s Waller by selling USD after previously ignoring cautious, wait-and-see comments from other Fed officials.
XRP jumps 22% into price discovery as market cap hits a record $210B
Key takeaways:
· XRP price surged 22% over the last 24 hours, reaching a new all-time high of $3.66.
· Favourable regulatory action in the US is adding tailwinds.
· Momentum indicators suggest XRP has more room to run: bull pennant targets $14.
XRP XRPUSD price set a historic milestone, rising to its highest level on Friday as major cryptocurrency bills passed the US House and traders piled in.
XRP market cap passes $200 billion milestone
The XRP market cap has surged 12% over the last 24 hours and 63% in the last 30 days, surpassing the $210 billion mark for the first time to a record high of $216 billion on Friday.
XRP’s daily trading volume has also more than doubled on the day to $22.5 billion, reinforcing the intensity of the bulls.
The derivatives market too saw its trading volume more than double over the last 24 hours to $48.44 billion while the open interest climbed to a new record of $10.98 billion.
The price gains were partially fuelled by $73.17 million in short XRP position liquidations, compared to just over $29 million in long liquidations.
Next Days Are Key for Yen’s Outlook, Says Mitsubishi UFG
United States Treasury Secretary Scott Bessent is in Osaka on Friday at the World Expo and met with Japan’s Chief Trade negotiator Ryosei Akazawa and there is speculation of a possible meeting with Prime Minister Shigeru Ishiba in Tokyo as well, said MUFG.
The lack of headlines indicating progress on trade negotiations suggests momentum has stalled, with the negotiation strategy of the government being questioned, wrote the bank in a note to clients. Japan has been taking a tough stance with an insistence of some give in relation to the 25% auto tariff and this stance isn’t yielding any results.
Part of the government strategy is also likely to reflect the difficult timing with the upper house election taking place on Sunday, stated MUFG. Once the election is passed, the government may then be in a position to give way on its tough stance without the risk of political damage being reflected by lost votes and a possible loss of majority in the upper house.
The yen (JPY) has been weakening over this week and last week on two factors — the 25% tariff confirmed in Trump’s letter to Japan last week and polling data that increasingly indicates the prospect of the government losing its majority in Sunday’s election, pointed out the bank. The government’s popularity continues to wane, in part due to the ongoing cost-of-living crisis.
On Monday an NHK poll revealed PM Ishiba’s approval rating fell from 39% in June to 31% while support for the ruling LDP fell from 31.6% in June to 24%. A Kyodo News poll conducted on Sunday and Monday indicated the LDP would win less than 40 seats while New Komeito is expected to win no more than 10 seats. The ruling coalition need to win 50 of the 125 seats being contested to maintain its majority.
A loss of the majority will put pressure on PM Ishiba to step down, although it’s believed now that PM Ishiba will resist that attempt to build support with other parties. With most other parties calling for further support for households, speculation of additional fiscal spending will likely see further rises in Japanese government bond (JGB) yields and additional yen selling, added the bank.
A poor election result could also make doing a trade deal with the U.S. more difficult ahead of the Aug. 1 deadline.
The yen is the second-worst-performing G10 currency since the start of last week, so a loss of majority is certainly partially priced, but a lurch through the 150-level is likely if the government loses its majority, according to MUFG. The exit polls are expected to be announced at 8 p.m. local time in Japan on Sunday evening. Monday is a vacation in Japan which could add to uncertainties with the JGB market closed. As a consequence, currency trading liquidity will be less than normal, which could exacerbate moves in early trading on Monday.
FX option expiries for 18 July 10am New York cut
The dollar looked to be making strides yesterday before Fed governor Waller opened the can of worms on a suggestion to cut rates in July here. The greenback fell a little although Fed funds futures are still holding the line in not expecting a rate cut at the end of this month. The view here is the the dovish take by Waller is the outlier, more so than any real consensus at the Fed.
The market pricing remains that ~97% odds of no rate cut in July currently.
As such, the drop in the dollar is likely to be contained. In the case of EUR/USD, the expiries above will help to limit the overall movement as well. But from a technical perspective, the 100-hour moving average at 1.1634 is a key near-term spot to watch before any real push and pull from the expiries at 1.1650.
Then, there is also one for GBP/USD at the 1.3400 level. It doesn’t tie much to any technical significance but it does hover near the daily lows seen since last month. So, the expiries could play a part in limiting any downside before rolling off in the session ahead at least.
SocGen’s Overnight Economic News Summary
— US dollar stalls, bond yields retreat, risk on after dovish Waller urges 25bps cut at July FOMC,’ large share of tariff increases won’t be passed through to consumers’, ‘private-sector payroll gains are near stall speed and flashing red’. United States 10-year yield -2bps at 4.43%, 30-year retreats below 5.0%. Federal Reserve September pricing -15bps. Atlanta Fed GDP tracker slips to 2.39% from 2.66%.
— Japan’s consumer price index slows to 3.3% year over year in June from 3.5% in May. Core excluding energy up a tick at 3.4%, fastest pace since January.
— Day ahead: U.S. housing starts, building permits, prelim University of Michigan sentiment. European Central Bank current account.
— Nikkei -0.25%, EUR 10-year IRS unchanged at 2.65%, Brent crude +0.4% at $69.8/barrel, Gold flat at $3,337/oz.US d
Nikkei Chart
Reposting from earlier in the week
Japanese upper‑house (House of Councillors) election:
Election Overview Date: July 20, 2025
• Half of the 248 seats (124 seats) are up for grabs, using a mix of single-seat districts and proportional representation  .
• The ruling coalition of the Liberal Democratic Party (LDP) and Komeito currently holds 75 seats not contested this time out of a needed 125 for a majority .What the Polls Say
• A Kyodo poll suggests the LDP could win fewer than 40 of the 125 contested seats, potentially triggering calls for Prime Minister Ishiba’s resignation .
• An Asahi Shimbun survey estimates LDP will capture ~34 seats, Komeito ~9, totaling roughly 118 seats—7 short of a majority .
• Smaller and populist parties like Sanseito and the Democratic Party for the People (DPP) are gaining support.Political and Economic Stakes
• PM Ishiba, leading a minority government since October 2024, is under pressure. A loss in this election could further weaken his position .
• Mounting cost-of-living pressures—especially for food staples like rice—and voter dissatisfaction over stagnant wages are fueling support for opposition calls for tax cuts and welfare expansion .
• The bond market is jittery: long-term government bond yields have hit multi-decade highs, with the 10-year at 1.59%—the highest since 2008—and the 20–30-year yields at century highs, driven by worries about fiscal looseness and potential populist economic policies .International Context
• Japan urgently needs to finalize a U.S. trade deal by August 1 to avoid 25% tariffs—a process that may be complicated if the ruling coalition loses and fiscal or leadership instability emerges .
• A loss could also intensify friction with the U.S. on trade and defense commitments under Prime Minister Ishiba’s leadership (from the Internet)USDJPY 1 HOUR CHART’
Using my platform as a HEATMAP shows…
A cautious end to a volatile week
Dollar trading weaker … except vs the JPY, which is mainly weaker on its crossaes ahead of Japanese weekend elections
Gold is firmer
NAS100 and US500 in record high territory
US bond yields lower
Data ahead: US housing atarts and U of M consumer sentiment: Watch headline # and inflation expectations
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