Your day-ahead look for July 6, 2026
By Omkar Godbole|Edited by Sheldon Reback Jul 6, 2026, 11:15 a.m. 3 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on The bond market signals a subdued outlook for U.S. inflation. (stevepb/Unsplash)This excerpt is from CoinDesk's 'Daybook' newsletter. Sign up here if you haven't already.
Bitcoin's recent performance reflects a stabilization in the cryptocurrency market, with the asset BTC$62,881.16 climbing almost 7% during the week ending July 5, marking its strongest week since March.
This surge is largely attributed to inflation breakevens, which gauge market expectations for future inflation by comparing standard government bonds with inflation-linked ones. The two-year breakeven rate has dropped under 2% (as noted in the Daily Signal), aligning with the Federal Reserve's inflation target. Additionally, longer-term breakevens have seen a significant decline in recent weeks.
Interestingly, both the two-year breakeven rate and WTI crude oil prices, which are key indicators of inflation, have fallen to levels reminiscent of those prior to the outbreak of the Iran war in late February.
This trend is prompting some analysts to reconsider inflation worries, predictions of interest rate hikes by the Fed, and the strength of the dollar. The current bullish positions appear skewed and could be susceptible to a rapid reversal, potentially putting pressure on the Dollar Index (DXY). Such a shift might occur on July 14, when the U.S. releases the consumer price index for June.
According to Robin Brooks, a senior fellow at the Brookings Institution and former chief economist at the Institute of International Finance, "That’s when the deflationary impulse from falling oil prices should remind everyone that the Fed isn’t going to hike and that - if anything - the next move will be a cut."
If confidence in the dollar wavers, it could also weaken the resistance to further bitcoin gains, as the two are typically inversely related.
However, some experts are warning against overconfidence, suggesting that the market may be overrating the influence of oil prices on inflation. They argue that persistent price pressures are becoming a structural issue. YCC Macro stated on X, "The Fed can't declare victory simply because gasoline prices move lower. Sticky service-sector inflation is precisely why policymakers are likely to maintain higher rates for an extended period, even if headline CPI continues to ease." YCC Macro further cautioned that markets anticipating aggressive easing might be underestimating the durability of underlying inflation. "Stay alert!" they advised.
For insights on today’s activity in altcoins and derivatives, check out Crypto Markets Today. For a complete overview of this week's events, see CoinDesk's "Crypto Week Ahead."
What’s trending
- Coinbase AI faces backlash after prematurely announcing World Cup result (CoinDesk): Coinbase mistakenly sent users a “breaking news” alert claiming Norway's soccer team defeated Brazil 3-2 in a World Cup knockout game before it had started.
- Vitalik Buterin states Ethereum is gearing up for its 'biggest rebuild' since the Merge (CoinDesk): A newly revised Ethereum roadmap outlines a comprehensive multiyear overhaul that prioritizes quantum resistance and privacy enhancements.
- U.S. Treasury yields decline as investors await FOMC meeting minutes (CNBC): Treasury yields fell Monday as investors anticipated the release of the latest Federal Open Market Committee (FOMC) minutes later in the week and the NATO Summit.
- Global markets show mixed results as oil prices drop following OPEC+ output hike announcement (AP): European stocks rose Monday after a pullback in Asian markets, while U.S. futures increased ahead of Wall Street’s opening after the July 4 holiday. Oil prices continued to decline after OPEC+ agreed to increase output.
Today’s signal
U.S. two-year breakeven inflation rate. (Lukas Ekwueme/Bloomberg)The U.S. two-year breakeven inflation rate, reflecting market expectations for inflation over the next two years, has fallen below 2% for the first time since 2024.
This suggests that the market anticipates inflation will dip below the Fed's target within two years, which undermines the rationale for increasing U.S. interest rates.
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