The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1114 ET - Inflation expectations fall near the Fed target, but markets seem reluctant to unwind bets on rising interest rates. The one-year inflation-linked swap rate is just above the Fed's 2% target, indicating investors believe inflation will soon cool down. Falling oil prices should help, as should an interest-rate increase. Futures markets price in at least one rate increase this year, with high odds rates will stay elevated into 2027. Rate hikes "appear even more out of step with economic reality after this morning's data," Citi's Andrew Hollenhorst and Veronica Clark write. They expect the Fed's next move to be a cut. (paulo.trevisani@wsj.com; @ptrevisani)
1110 ET - Weakness in bitcoin continues, with the cryptocurrency dipping to as low as $58,300 earlier today before rebounding back towards $60,000. It's currently down 2% at $59,687, according to LSEG data. On Wednesday, net outflows from bitcoin ETFs surged to $469 million from $113.8 million the day prior, according to data from CoinGlass. The crypto analytics platform also says $660.5 million of liquidations occurred in the past 24 hours, with roughly $541 million of that being in long positions. Ethereum is down 2.6% to $1,569, and XRP is off 3.5% to $1.03. (kirk.maltais@wsj.com)
1105 ET - House prices in Spain are rising, leading to a boost for the Spanish covered-bonds markets, LBBW's Markus Herrmann says in a note. Covered bonds are debt securities issued by financial institutions and are backed by assets such as mortgage loans. "Rising house prices increase the value of the collateral in the cover pool," Herrmann says. Increased activity in the Spanish property market is also likely to result in higher supply of covered bonds after fairly limited issuance in recent years, he says. (miriam.mukuru@wsj.com)
1054 ET - A deeper-than-expected decline in U.S. weekly jobless claims is likely due to last Friday's Juneteenth holiday, Pantheon's Samuel Tombs writes. The holiday became official in 2021 and is increasingly observed. Claims last week fell to 215,000 from 227,000. Tombs notes declines were reported in the shortened week in the past three years. The broader trend in claims, a gauge for layoffs, "appears to have picked up since the start of May, consistent with growth in payrolls slowing," Tombs says. He expects "this hiring caution to persist, resulting in the unemployment rate climbing gradually to 4.7% by the end of this year." (paulo.trevisani@wsj.com; @ptrevisani)
1018 ET - French consumer confidence rebounding in June as global energy prices eased suggests that the inflation shock from the U.S.-Iran war could be smaller than initially feared, Pantheon Macroeconomics' Claus Vistesen says in a note. Insee's sentiment gauge rose to 84 from 82 in May. "French households, in theory, have the most to gain relative to consumers in the other major eurozone economies, as they have borne the full force of higher oil prices without offsetting tax cuts," Vistesen says. Households' expectations of future inflation fell markedly, while major purchase intentions also edged higher. However, a rise in unemployment fears is a risk to near-term spending growth, he says. "As such, we continue to forecast subdued growth in consumption this year." (edward.frankl@wsj.com)
0949 ET - German manufacturers have faced mounting competition from Chinese peers in recent years, but the worst of this could be coming to a close, Robin Winkler at Deutsche Bank says in a note. The decline in Germany's trade balance with China was driven by an appreciation in the real exchange rate, which made German goods relatively more expensive than Chinese products. "However, the tide began to turn late last year, and it has continued to do so in recent months." Despite producer prices rising more in Germany amid the energy price shock, China's nominal exchange rate continues to appreciate, Winkler says. From the second half of 2026, this could provide a boost to the trade balance, he adds. "We are increasingly confident that the worst of the China shock is over." (don.forbes@wsj.com)
0935 ET - After year-over-year PCE climbed by 4.1% in May, some economists are predicting this could be the peak of price increases. However, the 0.3% increase in core inflation, and 3.4% from a year-ago, may have staying power, says Joseph Brusuelas, chief economist at RSM. "Given the clear pipeline pressure that has been evident for the past few months inside the Producer Price Index, unlike the topline those prices will not so easily retreat," he says. (jessica.coacci@wsj.com)
0920 ET - Bitcoin rises after a key U.S. inflation measure came in line with expectations. The core personal consumption expenditures price index--the Federal Reserve's preferred inflation gauge--rose 3.4% year-on-year in May, as forecast by economists in a WSJ survey. The data comes as oil prices fall to prewar levels and are expected to reduce inflationary pressures. Separate U.S. data showed lower-than-expected weekly jobless claims of 215,000 while the third estimate of first-quarter gross domestic product was revised up to an annual rate of 2.1% from 1.6% previously. Durable goods fell 4.5% in May, more than expected. Bitcoin rises to $61,598 from $61,032 before the data, LSEG data show.(renae.dyer@wsj.com)
0914 ET - Payroll employment in Canada ticked up in April, while job vacancies again showed little change. The number of employees receiving pay and benefits from an employer edged up by 22,000, or 0.1%, for the month after little movement in March. Compared with last year, payroll employment was up by 78,100, or 0.4%. Statistics Canada says there were 490,500 job vacancies in April, a fourth straight month of little variation, though vacancies dropped by 3.4% on-year. The more timely labor force survey showed a rebound in hiring in May, with 87,800 jobs added to the economy following a drop of 17,700 in April. Based on the survey, employment is down 49,300 over the first five months of 2026. (robb.stewart@wsj.com; @RobbMStewart)
0908 ET - Treasury yields and the dollar fall as U.S. indicators send mixed signals while oil prices slip below pre-war levels. May PCE inflation meets WSJ consensus, accelerating to 4.1% from 3.8%. Falling energy costs are expected to cool future inflation. May durable goods orders fall 4.5%, versus consensus of a 4% contraction. A third estimate raises 1Q GDP growth to 2.1% from 1.6%, compared to estimates of 1.7%. Weekly jobless claims slip to 215,000 from an upwardly revised 227,000, versus consensus of 223,000. The WSJ Dollar Index drops to 97.69 from 97.83 before the data. The 10-year yield declines to 4.371% from 4.414% earlier. The two-year slips to 4.107% from 4.162%. (paulo.trevisani@wsj.com; @ptrevisani)
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)
(END) Dow Jones Newswires
June 25, 2026 11:14 ET (15:14 GMT)
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