Crypto Cools as Hang Seng Hits Three-Month High; Eyes Turn to U.S. Inflation
Asian equities started the week strong, led by Hong Kong’s Hang Seng Index, which surged 1.3% to cross 24,000 for the first time since March. The rally followed the kickoff of U.S.–China trade talks in London, signaling renewed diplomatic engagement between the two economic superpowers.
Despite the broader risk-on mood, major cryptocurrencies remained muted, with traders positioning cautiously ahead of Wednesday’s release of U.S. CPI data.
Bitcoin Flat as Network Activity Slows
Bitcoin (BTC) traded near $105,650, showing little momentum after forming a doji candle over the weekend—an indicator of indecision. On-chain trends were also soft, with Blockchain.com data showing daily BTC transactions (7-day average) hitting a 12-month low at 315,480.
XRP, despite briefly breaching a multi-week downtrend, slipped 1.1% to $2.24, while Dogecoin (DOGE) fell 1.9% to $0.161, extending losses after failing to break above its 100-day SMA.
China’s Economic Woes Persist Despite Equity Gains
While trade optimism lifted stocks, new data from China painted a weaker picture:
- CPI fell 0.1% YoY in May
- PPI declined 3.3%, a sharper drop than anticipated
Economists warned the worsening deflation may force additional stimulus from the People’s Bank of China (PBOC). With interest rates already at record lows, the central bank may cut the reserve requirement ratio (RRR) further to jumpstart growth.
U.S. CPI in Focus as Tariff Impact Looms
Attention now turns to the upcoming U.S. inflation report:
- Headline CPI is expected at +0.2% MoM, or 2.5% YoY
- Core CPI may edge up to 2.9% YoY
Analysts at Barclays suggest the data could offer the first glimpse of tariff-driven inflation, complicating the Fed’s rate cut outlook and potentially injecting fresh volatility into markets.
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