The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1038 ET - Yields on U.K. government bonds climb as investors take precautions while waiting to find out the identity of the future U.K. Treasury chief, which could be revealed next week. The incumbent, Rachel Reeves, could be replaced as the country awaits a new leadership team after Keir Starmer said he would step down. Wes Streeting is seen as a more market-friendly candidate to lead the Treasury. Some investors worry that candidates such as Ed Miliband and Yvette Cooper could loosen the fiscal rules and exacerbate the U.K. government debt problem, TD Securities' Pooja Kumra says. Ten-year gilt yields climb 4.4 basis points, last trading at 4.748%, Tradeweb data show. (miriam.mukuru@wsj.com)
1034 ET - Investors are demanding extra compensation for buying U.K. government bonds, or gilts, due to expectations that public borrowing could rise considerably, Tickmill Group partner Patrick Munnelly says. "Markets are pricing in heavier gilt supply, wider deficits and a lingering political risk," he says. U.K. has the highest government borrowing costs among developed market peers. Ten-year gilt yields climb 3.5 basis points to last trade at 4.738%, Tradeweb data show. Sterling weakens against euro, with euro rising to an intraday high of 0.8651 pounds, according to LSEG. (miriam.mukuru@wsj.com)
0954 ET - The Bank of Japan could intervene in the currency market to shore up the yen if upcoming U.S. nonfarm payrolls data are strong, ING's Francesco Pesole says in a note. The data are due Thursday before Friday's U.S. public holiday for Independence Day, which will offer slightly lower liquidity, he says. Robust data would potentially support Federal Reserve interest-rate rise expectations, possibly lifting the dollar versus the yen and prompting fresh interventions. ING expects the Fed to keep rates steady, which could make interventions more effective, he says. The dollar falls 0.1% to 161.62 yen, having reached a near two-year high of 161.94 Thursday, LSEG data show. ING sees 162-163 as the new area for triggering interventions. (renae.dyer@wsj.com)
0851 ET - Rail freight traffic from the U.S. continues to recover from last year's slump when the trade war between the countries kicked off. Statistics Canada data shows freight tonnage arriving from the U.S. jumped 14.7% on-year in April to 3.8 million tons, matching the five-year average for the month. In 2023 and 2024, freight loadings from U.S. rail connections in Canada represented an average 12% of total rail tonnage each month, but this fell to an average 10.4% in 2025. The proportion has edged up this year, averaging 10.9% in the first quarter and then 11.4% in April, the data agency notes. (robb.stewart@wsj.com; @RobbMStewart)
0845 ET - Treasury yields and the dollar ease as oil prices fall 3% and markets recalibrate the outlook for U.S. interest rates. Odds of one rate increase this year remain high, priced at 42% on CME's FedWatch tool, while odds of a second hike decline to 28% from 34% a week ago, as inflation forecasts cool down. At 10 a.m. ET, the University of Michigan consumer sentiment index is forecast to rise to 49 from 44.8, in a WSJ survey. The WSJ Dollar Index declines 0.1%. The 10-year Treasury yield is at 4.392%, easing from overnight highs but little changed from yesterday's 4.391% settle. The two-year falls to 4.102% from 4.120%. (paulo.trevisani@wsj.com; @ptrevisani)
0841 ET - The dollar's recent upward momentum looks set to moderate, TD Securities forex strategists say in a note. The DXY dollar index is approaching the 102.000 resistance level and the uptrend looks stretched, they say. Sustained dollar appreciation would likely require weaker economic growth outside the U.S. and the Federal Reserve raising interest rates more than markets expect, they say. "As global growth stabilizes, risk premia fade, and central banks narrow rate differentials versus a Fed on hold, dollar downside should re-emerge later this year." The DXY falls 0.2% to 101.232, having reached a 13-month high of 101.800 Wednesday. (renae.dyer@wsj.com)
0833 ET - Yields on U.K. long-dated government bonds could stay elevated as investors demand extra compensation due to worries about U.K. public finances, J. Safra Sarasin Sustainable Asset Management's Alex Rohner says in a note. The new U.K. leadership team could demand additional funding to meet rising public spending needs, he says. U.K. 30-year gilt yields rise 5 basis points to last trade at 5.457%, Tradeweb data show. (miriam.mukuru@wsj.com)
0733 ET - Bitcoin slips back below $60,000 as U.S. stock futures fall driven by losses in tech stocks. Apple's decision to raise prices of its major products due to rising memory and storage chip costs has sparked fears about the sustainability of the AI boom, XM analyst Raffi Boyadjian says in a note. It raises concerns that other companies will also hike prices as massive investments in AI lead to an unprecedented demand for memory and storage chips, he says. Consumer demand for tech and AI products could eventually cool, "bringing into question whether all the spending on AI infrastructure will pay off." Bitcoin trades flat at $59,360, having reached a 21-month low of $58,075 Thursday, LSEG data show. (renae.dyer@wsj.com)
0717 ET - Yields on U.K. two-year gilts fall to the lowest since March as investors cut back their bets on the Bank of England interest-rate rises. The prospects of the BOE increasing interest rates in the coming months have dropped as oil prices continue to fall, easing concerns about inflation risk. Investors currently price in a total of 19 basis points of BOE rate rises in 2026, down from 25bps of hikes priced in a week ago, LSEG data show. Two-year gilt yields are down 2 basis points to last trade at 4.098%, having dropped to a three-month low of 4.080% earlier in the session, Tradeweb data show. (miriam.mukuru@wsj.com)
0659 ET - The Federal Reserve will hold interest rates in the remainder of the year, according to Pimco's base case, economist Tiffany Wilding says in a note. "Because inflation has been so elevated in the first five months of the year, the Fed will likely need to see an actual moderation in inflation before thinking about moving rates," she says. However, recent developments should relieve some of the inflationary worries from those Federal Open Market Committee participants who thought policy rates would need to be higher by the end of the year, Wilding says. "As of the June SEP [Summary of Economic Projections], the committee was divided as to whether to hike rates or remain on hold," she writes. (emese.bartha@wsj.com)
0658 ET - Given expansionary fiscal policy, the outlook for longer-dated bonds might not be as clear as on the short end, BlueBay Asset Management's fixed income CIO Mark Dowding says in a note. "With 30-year Bund yields at levels matching where they were trading at the start of 2026, we think that gains are more likely to be earned in shorter and intermediate maturities," he says. The 30-year Bund yield last trades at 3.408% versus 3.538% at the beginning of the year, according to LSEG data. With eurozone PMI data highlighting a soft backdrop for economic activity, "we are more inclined to think that the ECB may now be done hiking," Dowding says. From this point of view, "we continue to view two-year swaps at 2.75% as attractively priced." (emese.bartha@wsj.com)
0626 ET - RBC BlueBay Asset Management continues to hold a constructive view on long-dated Japanese government bonds. "Unlike other global curves, which are very flat, the curve in Japan is exceptionally steep," BlueBay fixed income CIO Mark Dowding says in a note. In this way, there is plenty of protection in longer-dated bond yields with 30-year securities above 3.75%, he says. The 30-year JGB yield last trades at 3.79%, according to LSEG. (emese.bartha@wsj.com)
(END) Dow Jones Newswires
June 26, 2026 10:38 ET (14:38 GMT)
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