The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0909 GMT - The outlook for Middle East medical tourism to Thailand is improving, after signs of a recovery in tourist arrivals and flight connectivity, DBS Group Research analysts say in a note. Visitors from the Middle East account for 18% of Thailand's medical-tourism revenue and remain a key growth market. Tourist arrivals from the region to Thailand picked up in May, compared with April and March. DBS notes that major Gulf carriers have largely restored flight frequencies, citing Flightradar24 data. "We believe the recovery in flight capacity is a leading indicator of future tourist arrivals and should support continued growth in [Middle East] visitor arrivals during [2H]," DBS says. (amanda.lee@wsj.com)
0847 GMT - The cost of insuring euro-denominated credit against default using credit default swaps falls due to optimism around a possible resolution to the U.S.-Iran conflict. Markets are pricing in a rising chance of a U.S.-Iran diplomatic breakthrough after President Trump said that an agreement will be reached shortly, Tickmill Group's Patrick Munnelly says in a note. The iTraxx Europe Crossover index of euro high-yield credit default swaps falls 5 basis points to 258bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)
0829 GMT - The dollar is unlikely to fall much further even if the U.S. and Iran reach a deal on peace talks, ING's Chris Turner says in a note. The legacy issue of this crisis is the substantial loss of energy supplies and its inflationary shock worldwide, he says. Unless crude starts shipping freely in the Strait of Hormuz soon, oil prices probably won't fall much, he says. The market continues to price in nearly 20 basis points of Federal Reserve interest rates this year. "It is hard to see that being unwound ahead of next Wednesday's Fed meeting, where a new-look statement and a new set of forecasts could prove dollar supportive." The DXY dollar index falls 0.1% to 99.701. (renae.dyer@wsj.com)
0808 GMT - The 0.1% contraction in U.K. GDP in April will validate the Bank of England's expectation of second-quarter growth at 0.1% heading into next week's meeting, Barclays' Jack Meaning and Cian Hennigan say in a note. Services activity drove the contraction, with a negative contribution coming from sports and recreation, likely in part on cancellations of sporting events in the Middle East, they say. Focus now turns to May inflation and April labor-market data due next week for any surprises. "We think the bar for coming data to change the outcome of the June meeting is high, although it may, at the margin, affect the vote split and tone of individual paragraphs." (edward.frankl@wsj.com)
0805 GMT - Recent talks around China's reported plan to spend 2 trillion yuan on data-center construction signal a further push in government-led investment toward high-tech manufacturing and AI infrastructure, Goldman Sachs economists say. They note the reported spending is part of the "Six Networks" policy outlined in the 15th Five-Year Plan in March, which includes investment in computing power and next-generation communications networks. Goldman says recent policy signals suggest the investment drive is accelerating, backed by funding from central and local government bonds and commercial bank lending. The stronger policy messaging and project preparation point to faster fund deployment in 2H after a fiscal spending slowdown in 2Q. China's augmented fiscal deficit could therefore widen again, the bank says. (jason.chau@wsj.com)
0803 GMT - Sterling falls only modestly as traders appear to overlook negative U.K. factors, Monex Europe analysts say in a note. The analysts say they expected greater sterling underperformance after the U.K.'s defense secretary, John Healey, said he was resigning in a row over funding that further destabilizes the government. Meanwhile, data Friday showed the economy contracted 0.1% month-on-month in April as expected. This feeds into Thursday's Bank of England meeting where markets have recently pared back interest rate rise expectations, the analysts say. "Still, we think political developments are the key thing to watch from a sterling perspective headed into the weekend." Sterling falls 0.2% to $1.3385 while the euro rises 0.1% to 0.8634 pounds. (renae.dyer@wsj.com)
0744 GMT - Investors lower their expectations of the Bank of England raising interest rates following frail U.K. GDP data for April. Monthly GDP contracted by 0.1% in April from 0.3% growth in March. Annual GDP growth was 1.2%, unchanged from March, but weaker than the consensus forecast of 1.3% growth by economists in a WSJ poll. Recent U.K. data releases "suggest the economy slowing sharply going into the second quarter and that recession risks are elevated", Aberdeen's Luke Bartholomew says in a note. Investors price in a total of 38 basis points of BOE rate hikes in 2026 following the data, down from 51bps of rate rises priced in beforehand, LSEG data show. (miriam.mukuru@wsj.com)
0738 GMT - The euro wouldn't necessarily benefit if the European Central Bank raises interest rates again in July after Thursday's 25-basis-point increase, Commerzbank's Thu Lan Nguyen says in a note. It isn't guaranteed that the market would consider back-to-back rate increases appropriate, she says. Some market participants were already warning of a policy mistake with the latest hike, arguing it would be more appropriate to wait to see if the inflation shock proves persistent. "Premature and aggressive tightening could put unnecessary strain on the real economy and force the ECB to cut rates all the more sharply at a later stage." The euro falls 0.2% to $1.1560. (renae.dyer@wsj.com)
0733 GMT - After a strong start to the year for the U.K. economy, some course-correction was inevitable, Sanjay Raja, Deutsche Bank's chief U.K. economist, says. GDP sank 0.1% on month in April, after a 0.6% rise over the first quarter. As the Iran conflict unfolds, the energy shock is starting to catch up with households and businesses, Raja says in a note. "While May could bring some temporary reprieve--given the warmer weather--we think that activity will continue to slow as real incomes get squeezed by higher energy prices and higher market rates start to eat further into household budgets," he says. However, the data still puts the U.K. on course to beat earlier expectations of a softer outlook, with GDP growth of 1% this year, he adds. (edward.frankl@wsj.com)
0728 GMT - The fall in U.K. GDP in April was led by a sharp contraction in the services sector, Sanjay Raja at Deutsche Bank says in a note. Amid higher energy prices due to the war in Iran, households have started to pull back on spending, with consumer-facing services declining by 0.5% on month in April. Fuel consumption declined by nearly 10%. While manufacturing activity picked up, this may be driven by stockpiling as firms look to shore up inventories due to elevated geopolitical uncertainty, Raja says. "For households and businesses, the cost of living and cost of doing business will only increase from here." Still, Deutsche Bank expects GDP to rise by 1% this year, which would put the U.K. ahead of many G7 peers. (don.forbes@wsj.com)
0724 GMT - Bumrungrad Hospital is likely to benefit from resilient tourist arrivals from the Middle East in 2Q despite ongoing geopolitical tensions, says CGS International's Kasem Prunratanamala in a note. Travel demand from the region has started to stabilize despite the conflict, as May Mideast arrivals fell only 1.9% on year, he adds. This should bode well for the Thai hospital operator as revenue from Middle East patients grew 21% on year in 1Q, compared with a 1% gain in overall revenue, he says. Meanwhile, reduced Cambodian medical tourist numbers due to the Thailand-Cambodia border dispute could weigh on Bumrungrad's 2Q revenue, but he expects this drag to ease on favorable base effects. CGSI reiterates its add rating and 212.0 baht target price. Shares rise 0.85% to 177.0 baht. (megan.cheah@wsj.com)
0717 GMT - Yields on U.K. government bonds, or gilts, decline after frail GDP data lowered the possibility of the Bank of England raising interest rates. The latest GDP data shows the U.K. economy contracted by 0.1% on month in April, down from 0.3% growth in March. "That economic weakness helps explain why the Bank of England is very unlikely to follow the ECB's decision to hike at its meeting next week," Aberdeen's Luke Bartholomew says in a note. Ten-year gilt yields fall 6.4 basis point to an 11-day low of 4.840%, Tradeweb data show. (miriam.mukuru@wsj.com)
(END) Dow Jones Newswires
June 12, 2026 05:09 ET (09:09 GMT)
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