Stablecoins' Usage Could Reduce De-Dollarization Threat — Market Talk

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0827 ET - Stablecoins could help mitigate the threat of de-dollarization, or reduced use of the dollar globally, if they become mainstream, MUFG Bank's Derek Halpenny says. Stablecoins are a type of cryptocurrency pegged to another asset, including traditional currencies. The dollar currently dominates the market for stablecoins as many coins are pegged to the U.S. currency. "If the dollar continues to dominate that and we see an expansion in terms of stablecoin usage, that certainly would be a counterargument to de-dollarization," he says. Stablecoin demand has more potential to rise in countries that are contending with historically high inflation and currency depreciation, he says. There is some evidence of this in emerging markets, he says. (renae.dyer@wsj.com)

0812 ET - The Turkish lira remains weaker against the dollar, barely reacting after Turkey's central bank left interest rates at 37%. Most market participants expected no change in rates, although some were expecting a rate rise, Commerzbank's Tatha Ghose says in a note. The central bank said energy prices remain elevated amid the Iran war and it is closely monitoring the effects of these developments on the inflation outlook. The dollar rises 0.1% to 44.9197 lira, little changed from levels before the decision. The lira remains heavily managed which can smooth volatility in the near term but doesn't resolve underlying imbalances, Ghose says. "The probability of a more abrupt currency adjustment will rise materially in the event of no monetary policy change." (renae.dyer@wsj.com)

0809 ET - Bitcoin's recent recovery suggests it could be transitioning away from the prolonged weakness seen since the third quarter of 2025, LMAX Group strategist Joel Kruger says. Crypto has started outperforming traditional assets, with bitcoin running ahead of the S&P 500 and gold over the past month as investors seek alternative assets, he says. Stability in macroeconomic conditions, alongside progress on institutional flows and regulatory clarity, would potentially support further gains, he says. However, the market will "still need to navigate headline risk from global geopolitics and shifts in broader risk appetite." Bitcoin could rise towards $90,000 if it sustains levels above $76,000, he says. Bitcoin rises more than 3% to an 11-week high of $78,394, LSEG data show. (renae.dyer@wsj.com)

0716 ET - Even as U.K. inflation edges higher, the Bank of England is likely to keep interest rates on hold at 3.75% during the next rate decision on April 30, Hargreaves Lansdown's Emma Wall says in a note. U.K. annual headline inflation rose 3.3% in March from 3.0% in February. Investors price a 9% chance of a quarter-point BOE rate rise in April, LSEG data show. "Inflation is likely to remain elevated in April too, and markets are now pricing in one rate rise later this year, but our house view is that rates are held through the conflict," Wall says. (miriam.mukuru@wsj.com)

0713 ET - U.S. Treasury yields and the dollar are slightly lower after a cease-fire in the Middle East was extended. However, moves are limited amid ongoing uncertainty about the conflict and the outlook for energy prices. "The extension of the current ceasefire by President Donald Trump has reduced the risk of immediate escalation but left the broader outlook uncertain," says DHF Capital's Bas Kooijman in a note. The continued closure of the Strait of Hormuz keeps energy supply disruptions unresolved, which could continue to pose inflation and growth risks, he says. The two-year Treasury yield falls 1.1 basis point to 3.768%, whilethe 10-year yield is down 1.2 basis points at 4.280%, according to Tradeweb. The DXY dollar index is down 0.1% at 98.329. (emese.bartha@wsj.com)

0705 ET - Bank Indonesia's decision to hold rates is seen as a hawkish pause, Societe Generale economists say. They believe BI will keep the policy rate on hold for longer, leaving it at 4.75% until there is clearer evidence that the rupiah has stabilized sustainably and imported inflation risks from energy have diminished. A renewed oil spike, capital outflows or a sharper rupiah selloff could push the central bank to tighten monetary policy, they say. Meanwhile, relatively faster disinflation and calmer global markets could reopen the door for a late-year cut. Still, BI's language suggests a cut anytime soon is unlikely and will require convincing evidence of forex stability and dissipating oil risks. For now, the economists maintain their expectation of one 25 basis-point reduction before the year's end. (jihye.lee@wsj.com)

0702 ET - Euro credit default protection costs decline as market optimism rises following the extension of the U.S.-Iran cease-fire on Tuesday. Investors expect the "sustained de-escalation could ease pressure on energy prices and reduce the near-term drag on global growth sentiment," Tickmill Group's Patrick Munnelly says in a note. The iTraxx Europe Crossover index of euro high-yield credit default swaps falls 2 basis points to 283bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)

0653 ET - Bank Indonesia is likely to keep policy settings on hold as fuel subsidies contain inflation, ING economists say. BI stood pat earlier, seeking to limit rupiah risks. Given the reduced need for a hawkish response, BI is likely to rely on non-rate tools for rupiah stability, ING's Deepali Bhargava says. CPI will likely hit around 3.5% in the coming months, but that's well below the peak that triggered aggressive tightening in 2022, she notes. And with growth weakening, rate hikes seem undesirable. ING expects a rate hold through 3Q, with softening growth potentially opening the door to cuts. Still, oil above $100 ㅁ barrel could widen fiscal risks. That would pressure the rupiah, combining with factors like low oil reserves and limited FX buffers to limit room for intervention. (fabiana.negrinochoa@wsj.com)

0640 ET - A flurry of media reports saying the Bank of Japan is likely to hold rates next week prompts TD Securities strategists to push back their rate-hike call to June. "We read this as the BOJ's media campaign that they have made up their mind to delay a hike to avoid surprising the market," Alex Loo and others say. Market pricing suggests that the bar for a surprise is extremely high, but while the BOJ is likely to wait to assess the impact of the Middle East war, a hold would be a pause, not an end, to the hiking cycle. Economic conditions call for further tightening, as monetary policy remains very accommodative. Terminal rate pricing remains above 1.5%, reflecting markets' view that a hold kicks the can down the road. (fabiana.negrinochoa@wsj.com)

0607 ET - The rise in fuel prices accounted for all the increase in U.K. inflation to 3.3% in March, but it is a much narrower shock than after the last energy-price shock, Berenberg's Andrew Wishart says in a note. In 2022, strong demand played as large a part as supply constraints in explaining rising prices, he says. Judging by current market estimates of energy prices, inflation is set to hover just below 3% for the rest of the year, before dropping below 2% in spring 2027, he says. In that scenario, Bank of England concerns about the jobs market would trump worries about inflation expectations, he says. "Therefore, we continue to expect the BOE to resume interest-rate cuts in the fourth quarter." (edward.frankl@wsj.com)

0604 ET - The Bank of England faces a dilemma as U.K. inflation edges higher and growth is weak, AJ Bell's Danni Hewson says in a note. U.K. annual headline inflation for March rose to 3.3%, from 3.0% in February as high energy prices pushed up the cost of goods and services. If the BOE fails to raise interest rates and inflation becomes embedded, it will be accused of "not acting soon enough," Hewson says. However, interest-rate rises risk pushing the U.K. economy towards recession, she says. (miriam.mukuru@wsj.com)

0528 ET - Even with U.K. inflation heading toward 4.0% this year on the Iran war and increases in household energy bills from July, Bank of England rate hikes are off the table for now, ING's James Smith says in a note. "The BOE is still flying blind, with the conflict unresolved," he says. Inflation rose to 3.3% in March, from 3.0% previously. The limited amount of survey data available so far suggests little cause for alarm on inflation. "Against a fragile jobs market, we don't expect a rate hike next week, or this year," Smith says. The bank likely won't act unless inflation spikes materially above 4%, a level above which it identified as being more likely to trigger a persistent bout of price pressure, he says. (edward.frankl@wsj.com)
source: https://www.tradingview.com/news/DJN_DN20260422005063:0/