The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1931 ET - UBS downgrades Mercury NZ to "neutral," from "buy," despite forecasting a very strong set of FY26 results by New Zealand's power generators and retailers. Analyst Vignesh Nair switches preference to Meridian Energy, noting its earnings growth leads the sector. Meridian's earnings have grown at a compound annual rate of 10% over three years, outpacing a 6% increase for the industry. UBS says its decision to downgrade Mercury NZ was driven by valuation, with the stock up 14% since the start of April. Looking ahead to the FY26 results, UBS expects the New Zealand power companies to report a combined 36% rise in Ebitdaf, underpinned by a highly favorable pricing and generation environment. (david.winning@wsj.com; @dwinningWSJ)
1908 ET - The Australian dollar is trading at 0.7134 against the dollar early on Friday. Commonwealth Bank of Australia says the narrowing of Australia-U.S. interest-rate differentials could continue to weigh on the currency rate. It notes that markets continue to price around one more rate increase by the Reserve Bank of Australia this year. "We expect no further rate hikes by the RBA, with signs of softening activity likely to outweigh lingering inflation concerns," says CBA strategist Samara Hammoud. "In contrast, we expect the FOMC to start a tightening cycle in December." (david.winning@wsj.com; @dwinningWSJ)
1841 ET - Australian stocks look set to rise at the open, potentially wiping out losses compiled so far this week. Local equities futures are up by more than 0.5% after the Dow Jones Industrial Average closed at a record. The S&P/ASX 200 benchmark index is coming off a 1.1% drop and is down by 0.5% so far this week. Ahead of Friday's session, engineering services provider Monadelphous announced a A$380 million contract with CS Energy. Resolute Mining said it had deferred a planned plant shutdown until the middle of this month. In the U.S., the DJIA jumped 1.7%, the S&P 500 added 0.4%, and the Nasdaq Composite slipped 0.1%. (stuart.condie@wsj.com)
1616 ET - Household consumption in Mexico rose a seasonally adjusted 1.2% in March following declines in January and February, with gains in goods and services. The pickup is a positive sign which, along with a 0.4% rise in March fixed investment, set the stage for a potential recovery in the second quarter, analysts at Grupo Financiero Banorte say in a note. "Our forecast for domestic demand continues to identify consumer spending as the key driver at the end of said period," they write. "This is primarily due to the economic impact surrounding the World Cup--with 13 matches taking place in the country's three major cities (Mexico City, Guadalajara, and Monterrey) and seven national teams based in six different cities." (anthony.harrup@wsj.com)
1546 ET - Treasury yields decline alongside oil futures amid renewed hopes of a resolution to the Middle East conflict and ahead of U.S. payrolls. Economists surveyed by WSJ expect May job creation to slow to 80,000 from 115,000, with unemployment steady at 4.3%. An upward surprise will likely fuel bets on a Fed hike, while a larger decline would support a more dovish stance. The 10-year yield drops 0.016 percentage point to 4.475% and the two-year falls 0.036 p.p. to 4.048%. The WSJ Dollar Index pares down morning losses and is nearly flat. (paulo.trevisani@wsj.com; @ptrevisani)
1433 ET - Kansas City Fed President Jeff Schmid reaffirmed his view that inflation is too high, and the Fed's choice is between hiking rates or holding them steady. "Do we say, okay, now it's time to raise rates a quarter or two and see if we can't tamp this thing down," he said at a fireside chat in Oklahoma. (jessica.coacci@wsj.com)
1309 ET - Bitcoin has more room to fall, says Lacie Zhang of Bitget. In a note, Zhang pegs the new support level for bitcoin as low as $55,000. That would put bitcoin back at levels last seen in 2024. "Crypto may be pricing in macro stress faster, not just reflecting it," says Zhang, adding that what is pressuring bitcoin should soon come for equities, despite the recent strength in AI stocks. "Crypto's 24/7 structure, higher leverage, and more reactive retail base mean it often front-runs macro moves, both on the way down and in recovery," says Zhang. "A retest of $55K-$57K remains possible if outflows persist, but crypto may already be closer to clearing this episode than equity markets are." (kirk.maltais@wsj.com)
1246 ET - The confirmation of Strategy selling 32 BTC remains a pressure point for bitcoin prices-- even if that's only a tiny fraction of the BTC stockpile held by the company. Strategy still has over 843,000 BTC, far surpassing the 43,000+ BTC held by the next largest stockpiler Twenty One Capital, according to data from CoinMarketCap. Even so, the sale has investors nervous. "The shift in approach from one of the world's largest BTC holders has weighed on market sentiment," says Zach Pandl of Grayscale Research in a note. Strategy head Michael Saylor has advocated for aggressively buying bitcoin and holding onto it. Bitcoin is down 1.8% to $63,790 this afternoon. (kirk.maltais@wsj.com)
1134 ET - Gold prices extend gains, supported by a slight retreat in the U.S. dollar and falling crude as traders hope the ceasefire between Israel and Lebanon could remove an obstacle in U.S.-Iran talks. New York gold futures are up 0.7% to $4,500.60 a troy ounce. Meanwhile, the U.S. dollar index falls 0.2% to 99.35, and Brent and WTI are down 3%. Traders are closely watching the latest U.S. data and cues for the Federal Reserve's next move, fearing higher interest rates for longer or even a potential hike, which would weigh on non-yielding bullion. However, "for now, hikes are still not a foregone conclusion," says Stephen Brown from Capital Economics. "The May employment report tomorrow could yet change the narrative." (giulia.petroni@wsj.com)
1111 ET - U.K. households' direct debit failures are slowly rising, making this a trend worth watching, Deutsche Bank's Sanjay Raja and Shreyas Gopal say in a note. Direct debit failures could potentially be an example of underlying problems even as economic indicators are for now otherwise relatively healthy. The latest Bank of England money and credit report shows that U.K. household balance sheets are in good health, with households' deposits rising to 5.8 billion pounds ($7.8 billion) in April. "Despite the unfolding cost of living shock, household balance sheets, in aggregate, remain in a good place," the analysts say. (miriam.mukuru@wsj.com)
1101 ET - Sterling traders appear complacent about an upcoming U.K. special election that could determine Prime Minister Keir Starmer's fate, Ebury's Matthew Ryan says in a note. Andy Burnham could challenge Starmer's leadership if he wins the election in the Makerfield constituency on June 18. This is a fairly significant underpriced risk for sterling, Ryan says. The complacency perhaps largely reflects the delayed timetable for a possible leadership change, rather than a genuine receding risk in a change in the status quo, he says. "Burnham's clear preference for an expansionary fiscal stance, higher taxation and larger gilt [U.K. government bonds] issuance present a downside risk to markets," he says. Sterling rises 0.2% to $1.3442. The euro rises 0.1% to 0.8650 pounds. (renae.dyer@wsj.com)
1053 ET - The European Central Bank is expected to hike interest rates twice this year before going back on hold, says Jack Allen-Reynolds at Capital Economics. With inflation tracking above the central bank's March forecasts, a hike in July is all but certain, and Capital Economics expects another in July. "But second-round effects of higher energy prices on inflation should be limited, meaning that the ECB's tightening cycle will be short," Allen-Reynolds says. Weak demand and economic growth should limit any broader inflation spiral, he adds. Should the Strait of Hormuz reopen and energy prices fall, the ECB could cut interest rates back to 2% in 2027, he says. (don.forbes@wsj.com)
(END) Dow Jones Newswires
June 04, 2026 19:31 ET (23:31 GMT)
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