The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0721 GMT - Yields on U.K. government bonds climb following President Trump's address to the nation in which he said the U.S. "will hit Iran extremely hard over the next two to three weeks". The remarks raised fears about a possible deterioration in the Middle East conflict, driving oil prices higher and reviving inflation concerns. Ten-year gilt yields rise 5 basis points to last trade at 4.895%, reversing Wednesday's declines, Tradeweb data show. (miriam.mukuru@wsj.com)
0714 GMT - Sterling is at risk of further declines after Bank of England Governor Andrew Bailey dampened market expectations for a pivot towards interest-rate rises, Commerzbank's Michael Pfister says in a note. Bailey told Reuters that markets were getting ahead of themselves by pricing in rate rises, citing risks to growth and jobs. Markets now expect two rate increases by December, compared to three at the peak, LSEG data show. "But based on Bailey's statements, we still anticipate a correction and expect interest rates to remain unchanged this year," Pfister says. This could contribute to sterling falling versus the euro in coming months, alongside U.K. political risks, he says. The euro rises 0.2% to 0.8722 pounds. Sterling falls 0.6% to $1.3221. (renae.dyer@wsj.com)
0708 GMT - Bitcoin falls on renewed risk aversion after President Trump threatened further military strikes against Iran. Trump said Wednesday in a prime-time speech that the U.S. was going to hit Iran "extremely hard over the next two to three weeks." Trump appeared to row back on his comments Tuesday that the U.S. could leave Iran in two to three weeks. The latest remarks spark fresh worries about an escalation in the conflict and reduce demand for risky assets, including cryptocurrencies. Bitcoin's direction still depends heavily on macroeconomic risk and overall market confidence, Saxo analysts say in a note. Bitcoin falls 2.2% to $66,664, dropping back after hitting its highest in nearly a week at $69,232 on Wednesday, LSEG data show. (renae.dyer@wsj.com)
0656 GMT - The relationship between the Bank of Japan and Prime Minister Sanae Takaichi is key to whether its next interest-rate increase will be able to strengthen the yen, says Dai-ichi Life Research Institute economist Hideo Kumano. "If the Takaichi administration criticizes the BOJ's rate hikes, the momentum for correcting the yen's weakness would be undermined," Kumano says. While Takaichi is considered to be in favor of looser monetary policy, tackling rising living costs is one of the biggest focuses for her administration - a task now complicated by the surge in energy prices. The OIS market is pricing in a 70% chance of a BOJ rate increase in April. (megumi.fujikawa@wsj.com)
0655 GMT - Market expectations for an interest-rate increase by the Bank of Japan in April are growing, but a hike could do little to prop up the yen unless it is accompanied by government yen-buying operations, says Dai-ichi Life Research Institute economist Hideo Kumano. "Since a combined move with currency intervention seems possible this time, the yen's weakness could be corrected more effectively than in December 2025, and the exchange rate might shift in the direction of a stronger yen," he says. The BOJ's last hike--to 0.75% in December--didn't significantly boost the value of the yen. (megumi.fujikawa@wsj.com)
0654 GMT - The Bank of Japan could raise interest rates even before the situation in the Middle East settles, potentially as early as this month, says Dai-ichi Life Research Institute economist Hideo Kumano. The economist had previously expected an end to the attacks on Iran to be a prerequisite for a BOJ rate hike, but now thinks that the central bank may act even if hostilities haven't ceased by late April, when BOJ policymakers next meet. "That is because the advancing yen depreciation has made inflationary pressures in Japan impossible to ignore," he says. "If the BOJ fails to act, the yen will continue to weaken, effectively forcing the central bank to raise rates in response to that very depreciation." (megumi.fujikawa@wsj.com)
0653 GMT - Global monetary policy shifts in response to soaring oil prices could put further downward pressure on the yen, says Dai-ichi Life Research Institute economist Hideo Kumano. The European Central Bank could raise interest rates at its April meeting, while the Federal Reserve might forgo expected cuts and could signal a possible end to its easing cycle, Kumano says. With the U.S. potentially pivoting back to hikes, the strong-dollar narrative is gaining traction. "Even if the BOJ implements gradual interest-rate hikes, it might not lead to any significant yen appreciation," he says. The dollar last stood at 159.35 yen. (megumi.fujikawa@wsj.com)
0650 GMT - There is circumstantial evidence that economic fundamentals are favoring a weaker yen as oil prices surged due to the Middle East conflict, says Dai-ichi Life Research Institute economist Hideo Kumano. "The long-term interest rate differentials between Japan and the U.S., as well as between Japan and Europe, are widening. This likely suggests that inflationary pressures in Western economies are even stronger than those in Japan," he says. Such a widening yield gap is driving the dollar and euro higher, putting more downward pressure on the yen, he adds. Oil prices were last up over 6% at over $100 a barrel. (megumi.fujikawa@wsj.com)
0649 GMT - Currency intervention serves as an effective brake against yen-selling triggered by speculators, says Dai-ichi Life Research Institute economist Hideo Kumano. "However, its impact is limited when economic fundamentals are driving the yen's depreciation," he says. Recent yen weakness has been fueled by the attacks on Iran, but market indicators suggest the shift may not be temporary and speculative, he adds, noting that inflation expectations are increasingly being reflected in long-term interest rates. The 10-year JGB yield was last up 8.5 basis points at 2.385%. (megumi.fujikawa@wsj.com)
0638 GMT - Eurozone government bond yields open higher, in line with U.S. Treasurys, as U.S. President Trump's speech to the nation on Wednesday failed to reassure markets about a swift end to the Middle East war. "After rallying sharply over the previous two sessions, market sentiment has deteriorated overnight," Deutsche Bank strategists say in a note. "Trump's much anticipated address last night delivered little to nothing new on potential timelines or conditions for ending hostilities against Iran." The 10-year German Bund yield rises 4.1 basis points to 3.027%; the 10-year French OAT yield jumps 6.3 basis points to 3.744%, according to Tradeweb. France's upcoming 10.5 billion-12.5 billion euros auction of long-dated government bonds likely exacerbates selling in French bonds. (emese.bartha@wsj.com)
0633 GMT - Singapore's central bank is likely to leave policy unchanged at its April meeting, say two members of RHB's Global Economics & Market Strategy Division in a research report. The Monetary Authority of Singapore will probably maintain an estimated 0.5% appreciation slope of the Singapore dollar nominal effective exchange rate's policy band, the members say. They cite three factors: potential downside risks to Singapore's growth outlook amid ongoing Middle East tensions, relatively contained inflation, and uncertain growth prospects for the year ahead that suggest tightening might not be necessary at this juncture. The MAS is scheduled to hold this month's meeting no later than April 14. (ronnie.harui@wsj.com)
0626 GMT - The dollar rises as doubts over a swift end to the Iran war weaken risk sentiment and lift oil prices. President Trump said Wednesday in a prime-time address that the U.S. was going to hit Iran "extremely hard over the next two to three weeks." The remarks came a day after Trump said the U.S. would leave Iran in two to three weeks, dashing hopes for an imminent end to the conflict. The dollar is boosted by its safe-haven role and America's position as a net oil exporter. The DXY dollar index rises 0.5% to 100.111.(renae.dyer@wsj.com)
(END) Dow Jones Newswires
April 02, 2026 03:21 ET (07:21 GMT)
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