The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0911 GMT - Yields on U.K. government bonds, or gilts, and sterling fall after the latest U.K. labor market data showed fragility in the jobs market. The unemployment rate increased to 5.0% in the three months to March. Average wage growth, excluding bonuses, also slowed to 3.4% in the three months that ended in March, from 3.6% in the three months to February. The data reduce prospects of the Bank of England raising interest rates in the coming months to tackle inflation, MUFG's Lee Hardman says in a note. Ten-year gilt yields fall 7 basis points to 5.068%, Tradeweb data show. Sterling falls 0.3% to $1.3394. (miriam.mukuru@wsj.com)
0904 GMT - Near-term volatility in bond yields could keep markets on edge but current attractive yields and growth risks point to an appealing risk-return profile for short- and medium-maturity quality bonds, UBS Global Wealth Management's Mark Haefele says in a note. "Yield volatility is likely to pick up further the longer the Strait of Hormuz remains closed, with markets pricing the upside risks to inflation and tighter monetary policies across the world," the CIO says. However, UBS GWM maintains the view that quality bonds offer an appealing risk-return profile given two-sided risks of inflation and growth. "We also do not expect higher yields to derail the current equity rally," Haefele adds. (emese.bartha@wsj.com)
0849 GMT - The August 2031 index-linked gilt valuation is expected to fall in the coming months, making the gilt less appealing, RBC Capital Markets strategists say in a note ahead of an auction of the bond at 0900 GMT. RBC expects that Tuesday's auction will likely be the second-last tap of the August 2031 index-linked gilt, with another possible on July 1. Confirmation of this would likely weigh on the bond, the strategists say. (miriam.mukuru@wsj.com)
0847 GMT - German businesses are hoping for a swift agreement among EU institutions on the U.S. trade deal ahead of talks Tuesday evening, according to DIHK, the German Chamber of Commerce and Industry. Agreements with the U.S. must be consistently implemented, given the threat of further tariffs and legal uncertainty even if those agreements are in part unsatisfactory, DIHK says. The current deal can help stabilize relations for the time being and buy time that Europe should use to pursue further trade agreements and partnerships, and to reduce strategic dependencies, it says."The asymmetrical nature of the EU-U.S. deal must not become a benchmark for European trade policy." (sarah.sloat@wsj.com)
0826 GMT - Bitcoin rises slightly, recovering after falling to a two-and-half-week low on Monday as sentiment improves after President Trump said that he would hold off on a planned U.S. attack on Iran at the request of Gulf leaders. This causes oil prices to turn lower, with bond yields following suit as inflation worries ease. Still, moves are limited as uncertainty surrounding the conflict in the Middle East remains. Rising bond yields and macroeconomic uncertainty have weighed on crypto assets, Saxo analysts say in a note. Bitcoin rises 0.2% to $77,050 after falling to a low of $76,021 on Monday, LSEG data show. (jessica.fleetham@wsj.com)
0819 GMT - Thailand's stronger-than-expected 1Q GDP growth could be short-lived and not sustainable, CGS International economist Gun Hathaisattha says in a note. The latest data likely didn't fully reflect the effects of the Middle East war and crude oil prices hitting $100 per barrel. The real impact would be seen in 2Q and 2H, when CGS International projects crude oil prices to average at $80 a barrel in 2026 and to be $100 from March to August before potentially falling below $100 in 4Q. "This will impact the Thai economy across the board, from souring consumption sentiment to increasing fuel imports," the economist says.(amanda.lee@wsj.com)
0806 GMT - The coming couple of weeks could be a sweet spot for a deal in the U.S.-Iran conflict, Jefferies' Mohit Kumar says in a note. "We are optimistic," the global economist says. Higher oil prices are hurting the U.S. consumer, while the blockade has dried up the oil revenue for Iran, he says. Both sides want the current stalemate to end, but in a manner that either side can claim victory, Kumar says. With the Trump-Xi summit out of the way, "a path has opened for some version of an agreement," Kumar says. (emese.bartha@wsj.com)
0755 GMT - A potential golden window for the internationalization of the Chinese yuan may be emerging, Citi analysts say in a note, pointing to geopolitical shifts and rising global yuan payments. Yuan settlement in goods and commodity trade has risen sharply, accelerating amid the conflict in the Middle East, with Iran and the United Arab Emirates signaling openness to yuan transactions. Wider use of the 'petroyuan' may further accelerate this trend, as China is a dominant crude buyer. Greater yuan-denominated oil proceeds would boost Chinese goods exports and investment in yuan assets, such as offshore bonds. Still, long-standing constraints on yuan use remain, including restrictions on capital convertibility and financial market access. Citi says a meaningful milestone would be if foreign holdings of onshore yuan assets return to 2021 peak levels. (jason.chau@wsj.com)
0754 GMT - The Bank of Thailand is likely to remain on an extended pause amid stagflation concerns, says DBS senior economist Chua Han Teng in a report. Growth faces headwinds from the war in the Middle East, including potentially weaker private consumption and tourism disruption. Inflation surged in April, driven by a jump in fuel prices. Higher inflation will dent household spending amid weaker consumer confidence, Chua says. The BOT is also unlikely to address the supply-side inflation shock with rate increases in the near term, as tighter policy would weigh on growth.(amanda.lee@wsj.com)
0748 GMT - U.K. government bonds, or gilts, are expected to face high volatility in the coming months due to political uncertainty, IBOSS chief economist Rupert Thompson says in a note. "Keir Starmer now looks pretty unlikely to remain as prime minister, which will probably entail some shift to the left in government policy," he says. Lack of clarity around the future leader of the U.K. could spark gilt-market volatility, Thompson says. Ten-year gilt yields fall 7.3 basis points to last trade at 5.066%, having surged to 5.190% on Monday, their highest level since 2008, Tradeweb data show. (miriam.mukuru@wsj.com)
0741 GMT - Weaker-than-expected labor market data in the U.K. is likely to reinforce a cautious stance by the Bank of England, ING's James Smith says in a note. The unemployment rate rose to 5.0% in the three months to March, with payrolls tumbling and wage growth slowing. "Weakness has been particularly concentrated in consumer-facing sectors most affected by last year's tax and minimum wage hikes. That pressure is only likely to be exacerbated by the incoming energy shock," he says. In this context, the economy looks less susceptible to second-round inflationary effects from higher energy prices, brining rate hikes by the BOE into question, Smith says. "We're still forecasting a rate hike in June, but that is far from guaranteed." (don.forbes@wsj.com)
0727 GMT - Yields on U.K. government bonds fall after weak U.K. labor market data reduce the chances of the Bank of England increasing interest rates in the coming months. U.K. average wage growth, excluding bonuses, slowed to 3.4% in the three months to March, from 3.6% in the three months to February. "Absent a further surge in oil prices, it is hard to see interest rates being increased much if at all in this environment," Aberdeen's Luke Bartholomew says in a note. Ten-year gilt yields fall 7 basis points to 5.069%, Tradeweb data show. (miriam.mukuru@wsj.com)
(END) Dow Jones Newswires
May 19, 2026 05:11 ET (09:11 GMT)
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