Asian markets have shown mixed recovery after a US producer price index report for July that exceeded expectations and has raised inflation concerns. The Nikkei 225 has rebounded because of better-than-expected GDP growth, while the CSI 300 has risen amid speculation of stimulus after weak Chinese economic data.

Private lenders, including Apollo Global Management and Blackstone, are reportedly exploring opportunities in a burgeoning debt market that uses football transfer fees as collateral. European football clubs have spent more than $5 billion on player transfers this summer, attracting significant interest from major private lenders.

Cross-border bank credit reached a record $34.7 trillion in the first quarter, driven by a $678 billion surge in lending to nonbank financial institutions, according to the Bank for International Settlements. The majority of the lending went to NBFIs in advanced economies, with the Cayman Islands and Japan seeing the largest increases.

Finance Minister Katsunobu Kato has stated that the Japanese government must carefully monitor economic and price trends amid recent calls from the business community for the Bank of Japan to raise interest rates. Kato emphasized that any decisions regarding monetary policy would be left to the BOJ itself.

The Hong Kong dollar has shown signs of recovery after sustained interventions by the Hong Kong Monetary Authority, which has withdrawn HK$3.376 billion from the market in 11 interventions since June. The currency touched a three-month high, moving away from the weak end of its 7.75-7.85 per US dollar trading band.

Treasury Secretary Scott Bessent said the US will not purchase Bitcoin for its Strategic Bitcoin Reserve, instead relying on $15-$20 billion in seized assets, but later left the door open to "budget-neutral" acquisitions. The reserve, created by President Trump in March, will be built from forfeited Bitcoin that can no longer be sold, removing a potential $10B supply overhang from the market. While fresh sovereign buying could have signaled strong institutional support, the plan remains largely symbolic until new funding mechanisms emerge.

Bank of America strategists have warned that the US dollar could face significant challenges if the Federal Reserve cuts interest rates amid rising inflation, a scenario last seen in 2007-08. BofA's Howard Du notes that this rare situation could lead to a depreciation of the dollar, which has already fallen 1.3% this month and 8% this year. Traders are anticipating a rate cut next month despite inflation accelerating at its fastest pace since January.

French 10-year bond yields have surged above 3% amid ongoing political instability and concerns over public finances, narrowing the gap with Italian yields to just 0.14 percentage points. This marks a significant shift, as France is now seen by investors as carrying similar credit risk to Italy, a country traditionally viewed as far riskier.

China's economy showed signs of strain in July, with retail sales growth slowing to 3.7% year-over-year from 4.8% in June, missing economists' expectations. The National Bureau of Statistics attributed the slowdown to weakening domestic consumption, challenges from the US trade war, and an extended property downturn.

Chinese bond traders are facing challenging market conditions as a stagnant economy and unchanged monetary policy have halted a multi-year rally. The benchmark 10-year government bond yield has remained between 1.6% and 1.9% this year, resulting in low volatility and minimal returns. Fund managers are increasingly turning to alternative assets and "fixed income plus" strategies to enhance yield, as traditional bond trading becomes less profitable.

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