The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0909 GMT - German economic growth was surprisingly strong at the start of the year, especially considering the impact of the war in Iran, KfW Research's Sebastian Wanke says in a note. German GDP grew 0.3% in the first three months of the year, up from the 0.2% of the final quarter of 2025. "The data show that it could have been a strong year for the German economy," he says. However, the war now casts a shadow over the outlook. "The hope remains that the Strait of Hormuz will open soon, allowing growth drivers to breathe again." Given the help from the German government's fiscal stimulus, GDP growth is still expected at 0.9% this year, Wanke says. (edward.frankl@wsj.com)
0903 GMT - The dollar turns lower as the Japanese yen recovers after Japan's Finance Minister Satsuki Katayama signalled possible interventions to prop up the currency. Katayama said Japan was close to taking decisive steps in the foreign-exchange market after the yen breached the 160 level against the dollar. The yen's earlier falls came as the dollar rose on concerns about an escalation in the Iran war and Jerome Powell confirmed he would stay on the Federal Reserve board after his term as Chair ends next month. The dollar falls 0.3% to 159.88 yen, having earlier reached a 21-month high of 160.72, according to LSEG. The DXY dollar index, which measures the dollar's value against a basket of currencies, falls 0.2% to 98.797. (renae.dyer@wsj.com)
0902 GMT - The Bank of England and European Central Bank face a difficult task of convincing the market of their willingness to respond to rising energy prices, Commerzbank's Michael Pfister says in a note. Markets have raised expectations for rate rises by the ECB and BOE, with nearly 80 basis points now priced in by year-end for both, LSEG data show. These advanced expectations make it challenging for the central banks to show their determination to act in decisions at 1100 GMT and 1215 GMT respectively, Pfister says. "As our economists predict an ECB rate hike in June but expect the BOE to hold off, I would favor the euro over the pound today." The euro is last down 0.1% at 0.8658 pounds. (renae.dyer@wsj.com)
0818 GMT - Investors forgive Alphabet's huge capital expenditure because of its strong earnings, XTB's Kathleen Brooks writes. Google-owner Alphabet said its investment in artificial intelligence data center will rise to $190 billion this year. At the same time, the company earnings per share were well ahead of Wall Street expectations, while revenue rose by 22% on year. "Alphabet has proven that its AI investment is paying off, and its AI products and cloud computing businesses are making a meaningful difference to its bottom line," Brooks writes. Alphabet's AI product offering is also easy to understand and built around a coherent strategy, she adds. Alphabet shares surge 6.3% in premarket trade.(josephmichael.stonor@wsj.com)
0801 GMT - The increase in interest-rate rise expectations for the European Central Bank raises the bar for a positive euro reaction to the ECB's decision at 1215 GMT, ING's Francesco Pesole says in a note. The jump in crude prices raises the chance of the ECB signalling future rate rises but rate expectations have moved accordingly, he says. The ECB is widely expected to leave rates unchanged Thursday but would likely need to indicate that some policymakers were prepared to lift rates to boost the euro, he says. However, this looks unlikely and market sentiment around the Middle East has deteriorated. "Unless oil starts turning lower today, risks remain towards a [euro] move to $1.1600." The euro trades flat at $1.1677. (renae.dyer@wsj.com)
0745 GMT - While not pretty, the slowdown in the French economy in the first quarter was driven by one-off factors that could reverse in the second quarter, Pantheon Macroeconomics economist Claus Vistesen says in a note. France's GDP was unchanged in the first quarter, slowing from a 0.2% rise in the last three months of 2025. Mild weather drove a 2.3% slide in energy consumption, pulling down overall consumption down by 0.1%, while construction expenditure dropped 1.5%. "Zero growth on the eve of a stagflationary shock is not great, but energy consumption and output will rebound in 2Q, and we also expect construction to recover," Vistesen says. Nevertheless, spending on goods and services is coming under pressure as real income growth takes a hit, he says. (edward.frankl@wsj.com)
0743 GMT - Yields on U.K. government bonds, or gilts, rise, with the 10-year yield hitting its highest level in a month as oil prices jump. Brent crude rises well above $120 per barrel, which will concern policymakers at the Bank of England, who are due to announce a decision at 1100 GMT. Rates are expected to be kept on hold, but high oil prices increase the prospect of future rate hikes. U.K. money markets price three 25 basis-point rate increases this year, LSEG data show. Ten-year gilt yields rise more than 2 basis points to a high of 5.082%, Tradeweb data show. (jessica.fleetham@wsj.com)
0743 GMT - The Bank of Japan is likely to raise its policy rate at its next meeting, unless energy supply concerns heighten further by the middle of June, says Rakuten Securities Economic Research Institute economist Nobuyasu Atago. "Once the impact on supply chains--specifically the risk of procurement disruptions for crude oil and naphtha--begins to subside, there is a high probability that the bank will move quickly to raise interest rates," Atago says. BOJ Gov. Kazuo Ueda has said the bank is focused on not falling behind the curve in addressing inflation. (megumi.fujikawa@wsj.com)
0736 GMT - Sterling rises following a jump in interest-rate expectations ahead of the Bank of England's decision at 1100 GMT. The market largely expects the BOE to leave rates unchanged Thursday but is pricing 78 basis points of rate rises by year-end following a sharp rise in energy prices due to the Iran war, LSEG data show. That compares to 48 basis points Wednesday. Rate-rise bets look excessive, however, and the BOE's decision could prompt markets to scale back these expectations, ING's Francesco Pesole says in a note. ING expects the BOE to vote 8-1 to leave rates unchanged but doesn't anticipate fresh clues about policy direction. Sterling rises 0.1% to $1.3483. The euro falls 0.1% to 0.8659 pounds. (renae.dyer@wsj.com)
0718 GMT - The Bank of England is expected to keep interest rates on hold later today despite rising inflation expectations, Kathleen Brooks at XTB says in a note. But as oil prices hit a fresh war-time high of $123 a barrel, the outlook is becoming more uncertain and hikes look more likely, she says. "The BOE may find it hard to avoid straying into hawkish territory," Brooks says. The central bank will emphasize a focus on second-round inflation effects. And a more divided vote, such as a tight 6-3 split toward holding rates, could signal a hike as early as June. "The market is expecting the BOE to signal that rates will remain higher for longer, and for now, U.K. inflation is expected to peak at 4% this year," Brooks says. (don.forbes@wsj.com)
0711 GMT - The Indian rupee has been weighed down by the Middle East conflict, Commerzbank Research analysts say in a research report. The rupee is affected disproportionately more than other Asian currencies because of its sensitivity to oil prices and capital outflows, the analysts say. Also, "higher oil prices have reignited fears of a larger import bill and wider current account deficit" in India, the analysts say. "We look for consolidation in USD-INR in the near term with RBI intervention to contain the upside," the analysts add. The dollar rises 0.4% to 95.2654 rupees, FactSet data show. (ronnie.harui@wsj.com)
0711 GMT - Consumer inflation in the Tokyo metropolitan area is expected to have risen 1.8% in April from a year earlier, according to a poll of economists by data provider Quick. That compares with March's 1.7% rise. Both upward and downward pressures likely played out in a tug-of-war this month. Japanese companies raised prices for their goods and services at the start of the fiscal year in April, while government energy subsidies capped the rise in gasoline prices caused by the Middle East conflict. Tokyo's CPI data is scheduled for release Friday.(megumi.fujikawa@wsj.com)
(END) Dow Jones Newswires
April 30, 2026 05:09 ET (09:09 GMT)
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