The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1144 GMT - U.K.'s new mortgage approvals are expected to decline as mortgage rates rise, Berenberg's Andrew Wishart says in a note. Net mortgage approvals climbed to 65,945 in April from 63,979 in March, showing that borrowers could be "rushing to get loans approved before rates jumped", Wishart says. Buyers expect mortgage rates to rise due to high market interest rates which rose after the start of the Middle East conflict. The next Bank of England Money and Credit report set to be released on Jun. 29, is expected to show a significant drop in mortgage approvals, Wishart says. (miriam.mukuru@wsj.com)
1124 GMT - Bitcoin remains near its lowest level since early April, reflecting continuing uncertainty over the Iran war and Strategy's decision to sell the cryptocurrency for the first time since 2022. "Digital assets remain under pressure as institutional outflows and geopolitical uncertainty continue to weigh on sentiment," Saxo Bank analysts say in a note. Spot bitcoin exchange traded funds remain in focus after several weeks of withdrawals, they say. Investors are also digesting news that bitcoin treasury company Strategy sold 32 bitcoin last week for about $2.5 million, they say. Bitcoin falls 2.6% to $69,520 after reaching an eight-week low of $69,268 earlier, LSEG data show. (renae.dyer@wsj.com)
1111 GMT - Poland's central bank could leave interest rates on hold Tuesday and for an extended period, providing modest support to the zloty, Commerzbank's Tatha Ghose says in a note. Markets have priced out rate cuts due to the energy-price shock stemming from the Iran conflict, he says. Policymakers have also indicated that the March rate cut was likely the last for the foreseeable future. However, the central bank is unlikely to raise rates as long as a U.S.-Iran deal keeps being touted as imminent. "For now, policymakers suggest waiting until at least the July meeting to examine updated inflation projections and then decide." The decision is expected at 1300 GMT. The euro trades flat at 4.2335 zloty. (renae.dyer@wsj.com)
1106 GMT - Investor sentiment has improved as markets assess the possibility of further de-escalation between the U.S. and Iran, whether through a broader agreement or an extension of the ceasefire, Columbia Threadneedle Investments' Anthony Willis says in a note. The move lower in oil prices "indicates that markets are placing greater weight on a scenario in which immediate supply risks begin to recede," the senior economist says. This matters for broader markets because lower oil prices reduce the risk that the conflict has on inflation or growth expectations, he says. "For now, markets appear willing to look through near-term headline volatility, reflecting a view that both sides may be moving towards a more durable framework," Willis says. (emese.bartha@wsj.com)
1055 GMT - The rise in eurozone inflation in May all but confirms a rate hike from the European Central Bank next week, Harry Woolman, analyst at Validus Risk Management says in a note. The last fortnight has seen a growing narrative from policymakers in favor of interest rates moving higher, owing to the gradual feedthrough from inflationary pressures due to the energy-price shock, he says. A notable slowdown in consumer discretionary spending, as well as tightening credit conditions, contributed to last month's PMI figures, which showed activity falling into contractionary territory for the first time since 2024, Woolman says. "The central bank, therefore, is set to face a medium-term headache as stagflationary concerns mount and the second-round effects of the conflict become more pronounced." (edward.frankl@wsj.com)
1054 GMT - The cost of default protection for euro-denominated credit declines to its lowest in three months as investors are optimistic that the U.S. and Iran could reach an agreement soon to end the Middle East conflict. President Trump said that negotiations with Iran were continuing, raising prospects of a resolution to the conflict and causing Brent prices to drift lower to $94 a barrel. "The further the oil price retreats from the $100 per barrel level, the greater investors' risk appetite," AJ Bell's Russ Mould says in a note. The iTraxx Europe Crossover index of euro high-yield credit default swaps falls 4 basis points to a low of 258bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)
1047 GMT - Eurozone inflation is set to continue trending upwards as the energy-price shock becomes more permanent, but its knock-on effects will likely be contained, Carsten Brzeski at ING says in a note. "For inflation in the eurozone, the only way is currently up. Not a sharp up but a rather moderate and gradual lift," he says. Oil prices remain lower than many expected, while survey-based inflation expectations have fallen back. An absence of fiscal support and lower savings ratios also mean pass-through of higher energy prices will be limited, with consumers lacking the ability to actually pay these higher prices, Brzeski says. This scenario doesn't call for any aggressive rate hikes following a likely "insurance" hike next week, he says. (don.forbes@wsj.com)
1047 GMT - India's central bank is likely to stand pat in June, economists at Pantheon Macroeconomics says in a note. The Reserve Bank of India's 2%-6% CPI target range seems very secure despite the fuel-price rises since mid-May, and a breach of this range is unlikely until end-2027, they say. The RBI also still has more than enough FX reserves to help the rupee, and the central bank doesn't seem worried about the rupee's recent depreciation yet, they add. For now, India's GDP for the fiscal 1Q is likely to show an economic growth slowdown just as the Middle East broke out, the economists say. (kimberley.kao@wsj.com)
1045 GMT - The combination of the energy price shock and persistently high domestic price pressures paves the way for a European Central Bank rate hike this month, KfW's Dirk Schumacher says in a note. Eurozone inflation rose to 3.2% in May, from 3.0% in April. The continued rise in energy prices pushed inflation to its highest level since September, But while that was widely expected, services inflation also picked up, to 3.5% in May, from 3.0%. That confirms the decline in services inflation in April was due solely to calendar effects, he says. (edward.frankl@wsj.com)
1028 GMT - U.S. Treasury yields fall and the dollar edges lower as investors await progress in the Middle East. The atmosphere is cautious "as market participants weighed conflicting signals surrounding U.S.-Iran negotiations," says BankPro CEO Paolo Broccardo in a note. "Any new signs of setbacks in the diplomatic process are likely to be met with market volatility and could fuel demand for the dollar, particularly given the potential implications for energy markets, inflation expectations, and broader risk sentiment," he says. The 10-year U.S. Treasury yield falls 4.2 basis points to 4.435%, according to Tradeweb. The DXY dollar index falls 0.1% to 99.133. (emese.bartha@wsj.com)
1028 GMT - Currencies in South Korea, Japan and Taiwan are underperforming, contrasting with strong AI-driven equity gains in these markets, Vishnu Varathan of Mizuho Securities Singapore writes in a note. The dissonance is likely due to net foreign-equity outflows from Korea and Taiwan, and constrained current-account dynamics in Japan, he says. Political-fiscal risks are also taking precedence. Supply-side shocks from the U.S.-Iran conflict, particularly with the Strait of Hormuz blocked, are hurting the currencies given their economies' disproportionate energy reliance and risks of industrial input disruptions, he adds. While downward pressures on the currencies could easily reverse if Iran risks are alleviated, the significant uncertainty means the drag will be hard to avoid, he says. (kimberley.kao@wsj.com)
1027 GMT - Ether could rise further against bitcoin after Strategy sold bitcoin holdings for the first time since 2022, Standard Chartered's Geoff Kendrick says in a note. Strategy said Monday that it sold 32 bitcoin last week for about $2.5 million. "I see yesterday as being the start of ether outperformance versus bitcoin." While small, Strategy's selling highlights the different business models of bitcoin digital asset treasury $(DAT)$ companies compared to ether DATs, he says. Ether has a 3% staking yield so there is no need for ether DATs to sell the cryptocurrency, which is different to bitcoin DATs. Ether versus bitcoin rises to a near three-week high of 0.0284530, according to LSEG, and Standard Chartered expects it to reach 0.040 by year-end. (renae.dyer@wsj.com)
(END) Dow Jones Newswires
June 02, 2026 07:44 ET (11:44 GMT)
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