The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1152 GMT - A decline in eurozone government-bond redemptions in 2025 versus 2024 will ease governments' financing requirements, says LBBW's Elmar Voelker in a note. The eurozone's 11 largest issuers are expected to see government-bond redemptions of 822 billion euros in 2025, down from 851 billion euros in 2024, the analyst says. Gross bond issuance is expected to fall by 3% to 1.256 trillion euros next year, nevertheless staying at an elevated level. Another record year of issuance can't be ruled out, but this would become likely if the eurozone economy drifts into a prolonged recession as a result of a trade war with the U.S., he says. (emese.bartha@wsj.com)
1106 GMT - The European Central Bank will likely tread carefully after inflation rebounded in the eurozone, Omnis Investments' Patrick O'Donnell writes in a note to clients. Inflation climbed back over the ECB's 2% target in November, hitting 2.3% on energy effects and still-high services inflation. While bank policymakers will be concerned at signs of a slowdown in the eurozone economy, it probably won't be pushed into cutting rates by half a point at next month's meeting, and will instead opt for a gentler quarter-point cut, O'Donnell says. "They may want to observe if there is any bounce back in the next round of survey data, and of course if there are any policy initiatives announced from the incoming U.S. administration which may impact their forecasts," he says. (joshua.kirby@wsj.com; @joshualeokirby)
1042 GMT - Yields on U.K. government bonds fall further following the release of the Bank of England mortgage and consumer lending data. U.K. net mortgage approvals rose more than forecast in October from September, but consumer credit unexpectedly weakened. Analysts at RBC Capital Markets say there won't be a clear picture of how the U.K. budget and diminishing expectations for U.K. interest-rate cuts have impacted the housing market until data for November are released. The 10-year gilt yield falls to 4.233% following the data, from 4.251% beforehand, Tradeweb data show. (miriam.mukuru@wsj.com)
1002 GMT - Indonesia's consumer inflation likely rose 1.5% on year in November, from October's 1.71%, according to the median estimate of five economists polled by The Wall Street Journal. Headline inflation likely continued easing, partly due to a drag from base effects, says Sanjay Mathur, chief economist for Southeast Asia and India at ANZ, in a research note. Food prices llikely also continued easing, particularly of rice, a key component in Indonesia's food basket, HSBC's global economics team says in a report. The inflation data are due Monday. (amanda.lee@wsj.com)
0944 GMT - A tighter monetary policy is beginning to pay off for Turkey, Capital Economics' Nicholas Farr writes in a note after the country's economy contracted for the first time in years. Contraction in the third quarter and, according to revised estimates, the second, means Turkey entered technical recession after the central bank hiked interest rates to a dizzying 50% between last year and earlier in 2024. "The policy tightening delivered by the central bank is helping to rebalance the economy," Farr says. Policymakers can now begin to consider cutting rates, though inflation remains strong still, he says.(joshua.kirby@wsj.com; @joshualeokirby)
0934 GMT - Volatility could rise in the euro-denominated credit market in the remaining weeks of 2024, UniCredit Research analysts say in a note. "We expect lower market liquidity, geopolitical tensions and unpredictable announcements from the incoming U.S. presidential administration to create the background for potentially higher volatility," they say. Euro credit supply is likely to remain low in the final weeks of 2024, UniCredit says. (miriam.mukuru@wsj.com)
0923 GMT - China's official manufacturing PMI likely edged up to 50.2 in November, compared with October's 50.1, according to a poll of economists by The Wall Street Journal. The pickup could be due to Beijing's stimulus measures, as well as export frontloading ahead of Trump's expected tariffs, economists say. China's National Bureau of Statistics will release the data on Saturday. (singaporeeditors@dowjones.com)
0922 GMT - The yield on French 10-year government bonds, or OATs, now trade at the same level as their Greek equivalents, with French debt hit by budgetary and political uncertainties. "It is striking to think that a more up-to-date definition of what constitutes the EU periphery would now presumably include Italy and France," BlueBay CIO Mark Dowding says in a note. Meanwhile, Spain, Ireland and Portugal now firmly established as 'semi-core,' he says. The 10-year Greek bond yield trades at 2.961%, while the 10-year OAT yield is at 2.960%, according to Tradeweb. "France as a credit is on a structurally deteriorating path, which shows no sign of changing," Dowding says. (emese.bartha@wsj.com)
0917 GMT - Yields on U.K. government bonds decline as investors await the Bank of England's mortgage and consumer credit data for October at 0930 GMT and the latest financial stability report at 1030 GMT. The Financial Stability Report sets out the BOE Financial Policy Committee's assessment of the stability of, and risks to, the financial system. U.K. gilts could also be influenced by their eurozone peers, which could react to eurozone provisional inflation data at 1000 GMT. The 10-year gilt yield falls 2 basis points to 4.259%, Tradeweb data show. (miriam.mukuru@wsj.com)
0850 GMT - Hong Kong's residential property market is likely to bottom out in 2025 given falling home prices and improving transaction volumes, CCB International analysts write in a note. Rising rents and falling prices, along with rate cuts expected next year, will improve the cost of carry for property investment in the region, they say. CCB International forecasts a 4% rental yield and a 3% mortgage rate by the end of 2025. In addition, pent-up demand over the past three years and the shift to buying from renting have prompted property developers to clear inventory, they say. Transaction volumes in the primary and secondary markets will likely improve to 18,000 units and 35,000 units, respectively, in 2025, they add. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0842 GMT - The U.S. dollar falls against other major currencies as end-of-month portfolio rebalancing weighs on the currency, Brown Brothers Harriman's Elias Haddad says in a note. Thin holiday trading volumes could be another factor working against the dollar, which has risen steeply in recent weeks, the strategist says. However, the dollar's longer-term strength is intact. "The more favorable U.S. economic outlook relative to other major economies suggests the fundamental dollar uptrend is intact," he says. The DXY dollar index falls 0.3% to 105.845, having hit a two-year high of 108.071 late last week. (emese.bartha@wsj.com)
0834 GMT - Uncertainty over French politics and France's budget are unlikely to have a major impact on the euro, says Swissquote Bank's Ipek Ozkardeskaya in a note. That said, it certainly doesn't help the euro, the analyst says. The euro rises 0.4% against the dollar to 1.0596 in early European trade, ahead of the release of flash estimate eurozone inflation data for November at 1000 GMT. A stronger-than-expected number should encourage investors to bet on a further recovery of the euro, the analyst says. However, a softer-than-expected read could keep the euro below the $1.06 psychological level. (emese.bartha@wsj.com)
(END) Dow Jones Newswires
November 29, 2024 06:52 ET (11:52 GMT)
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