The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0805 ET - Investors in U.K. government bonds, or gilts, are keen to find out the potential changes to economic policies under a new government following Keir Starmer's resignation from the prime minister role earlier this week, Federated Hermes' Filippo Alloatti says in a note. "Any perception of fiscal loosening would likely be met with higher gilt yields, reflecting investor sensitivity to fiscal credibility following previous market disruptions," he says. Ten-year gilt yields rise 1.1 basis points to last trade at 4.695%, Tradeweb data show. (miriam.mukuru@wsj.com)
0742 ET - The Canadian dollar's losses against the U.S. dollar seem overdone, Commerzbank's Michael Pfister says in a note. The Canadian dollar is hit by lower oil prices as Canada is a major oil exporter. Its weakness also reflects increased bets for interest-rate rises by the Federal Reserve. "We strongly believe that both of these factors are exaggerated," Pfister says. The oil market is reacting too euphorically to the reopening of the Strait of Hormuz as it will take time before depleted stockpiles are replenished and trading normalizes, he says. The Fed is also unlikely to raise rates, he says. The U.S. dollar rises 0.1% to 1.4248 Canadian dollars, matching the 14-month high reached Wednesday, according to LSEG.(renae.dyer@wsj.com)
0719 ET - Bitcoin edges higher as U.S. stock futures rise after strong quarterly earnings from memory chip-maker Micron Technology eased fears over the sustainability of the artificial-intelligence boom. Qualcomm has also lifted tech sentiment after the chipmaker posted an upbeat forecast for revenue from its data-center business, Trade Nation analyst David Morrison says in a note. Meanwhile, U.S. PCE price data at 1230 GMT will be important, given the recent increase in interest rate rise expectations for the Federal Reserve, which have boosted the dollar and recently weighed on risky assets including cryptocurrencies. Bitcoin rises 0.3% to $61,106 after hitting a 20-month low of $59,062 Wednesday, LSEG data show. (renae.dyer@wsj.com)
0713 ET - Headline inflation in the eurozone might be already past its peak, though there remain upside risks for the core rate, Morgan Stanley economists say in a note. There were no signs in May of indirect or second-round effects from the recent surge in energy prices, but risks are tilted toward some strengthening either this month or next, they say. While headline print could be a touch lower than European Central Bank projections at 2.8%, core inflation would be in line at 2.6%, MS forecasts show. This would likely be another reason for the ECB to remain on hold next month, but absent downward surprises on core, the ECB is still likely to hike in September, the economists say. Inflation data is due on July 1. (edward.frankl@wsj.com)
0642 ET - The surge in energy prices has driven a sharp selloff in the core rates with U.S. Treasurys, German Bunds and U.K. gilts now pricing 30-80 basis points higher than at the end of February, and markets pricing further hikes, Federated Hermes' Yulia di Mambro, says in a note. "The pace and scale of these moves have briefly pushed most fixed income indices into negative total return territory," the fixed income portfolio manager says. Short-duration credit is a notable exception, offering higher running yields and limited interest-rate sensitivity keeping returns positive, she says. Longer-dated debt might appear more appealing, such as the 30-year U.S. Treasury, but the outlook remains uncertain particularly given inflation volatility, she writes, considering the one- to three-year segment as "particularly attractive." (emese.bartha@wsj.com)
0622 ET - The Bank of England could leave interest rates unchanged at 3.75% as inflation risk has declined, Bank of America strategists say in a note. However, a BOE rate rise in 2026 can't be ruled out, they say. There is a risk that U.K. inflation could increase in the coming months to peak at 3.3%, before slowing to levels close to the BOE target of 2% in 2027, the analysts say. Investors price in an 84% chance of a BOE rate rise in 2026, LSEG data show. (miriam.mukuru@wsj.com)
0615 ET - U.K. financial companies' debt issuance in sterling increased faster than that from non-financial peers over the past decade, CreditSights analysts say in a note. Financials, predominantly U.K. banks, have raised their credit issuance since Brexit, while U.K. non-financial companies' credit supply nearly stagnated, the analysts say. U.K. banks are less sensitive to the interest-rate backdrop than non-financial issuers. Non-financial credit had previously been the main driver of net credit supply in the sterling market prior to 2016, they say. (miriam.mukuru@wsj.com)
0551 ET - Germany faces the risk of lagging behind its international peers in terms of AI-driven transformation, Deutsche Bank says. "The transition from generative to agentic AI will determine whether Germany catches up with its global competitors as a business location, or falls further behind," DB's Robin Winkler says. Germany continues to struggle with digitization, and it is worth noting that no other OECD country invests less in software than Germany, Winkler adds. AI remains a growth driver for the economy and financial markets, and the transition to AI agents is now accelerating significantly, DB's Christian Nolting says. ( najat.kantouar@wsj.com)
0550 ET - U.S. Treasury yields rise with Federal Reserve rate-hike expectations fueling the moves, while the dollar edges lower ahead of PCE data, the Fed's preferred inflation gauge. "Inflation concerns, coupled with a resilient labour market and solid economic activity, reinforced expectations that the Federal Reserve could maintain a hawkish stance," Empire FX's Crispus Nyaga says in a note. "A stronger-than-expected reading could reinforce expectations of a September rate hike and extend the recent rise in Treasury yields, while softer inflation could prompt traders to reassess the outlook for monetary policy and limit the dollar's gains," the analyst says. The 10-year Treasury yield is up 1.2 basis point at 4.411%, according to Tradeweb. The DXY dollar index falls 0.1% to 101.498 after reaching a 13-month high of 101.800 Wednesday. (emese.bartha@wsj.com)
0548 ET - AI is front and center of China's economic recovery, Citi analysts say in a research note. The AI supercycle is further powering the economy from exports to production. However, AI-driven job displacement is weighing on consumer confidence, they note. "The DeepSeek moment in early 2025 helped materially accelerate the AI-centric new economy, which has since broadened its macro footprint through intensifying AI deployment," the Citi analysts say. Citi keeps its 2026 growth forecast for China at 4.7%, with 2Q likely the low point for the year. (tracy.qu@wsj.com)
0519 ET - The ECB isn't expected to hike interest rates again as falling energy prices rein in inflation, Oliver Rakau at Oxford Economics says in a note. Still, the central bank could keep rates elevated for longer than previously expected amid upside risks to medium-term inflation, he adds. "The ECB may opt for a higher-for-longer scenario, where it reverts the June hike much later than our call for March 2027, or not at all." While a relatively weak economy limits the risks of second-round effects from the energy shock, upward pressure could still come from German fiscal stimulus and a weaker euro, Rakau says. And another small hike could still be an option should conflict in the Middle East flare up again, he adds. (don.forbes@wsj.com)
0522 ET - The cost of insuring euro-denominated credit against default declines as optimism returns after U.S. tech company Micron Technology posted impressive earnings results. The positive earnings eased concerns about AI-related investments and boosted appetite for risk assets. The iTraxx Europe Crossover index of euro high-yield credit default swaps falls 1 basis point to 247bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)
(END) Dow Jones Newswires
June 25, 2026 08:06 ET (12:06 GMT)
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