The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0744 GMT - Yields on U.K. government bonds, or gilts, fall after data showed annual U.K. GDP growth was revised down to 0.9% year-on-year in the first quarter, from 1.1% previously. The consensus forecast in a WSJ survey was for an unchanged reading, although quarterly growth was unrevised at 0.6%. U.K. economic growth is expected to slow in the coming months, reducing the prospects of the Bank of England increasing interest rates in the coming months. Ten-year gilt yields fall 1.7 basis points to last trade at 4.703%, Tradeweb data show. (miriam.mukuru@wsj.com)
0743 GMT - China's gross domestic product growth is still likely to slow in 2Q despite a stronger-than-expected June purchasing managers index, says ING's Lynn Song in a note. The manufacturing PMI recovered to 50.3 in June, from 50.0 in May, data from the National Bureau of Statistics showed. Nonmanufacturing PMI also stayed in expansionary territory. Despite the data beating downbeat expectations, they still indicate relatively tepid activity in China's economy, which could lead to 2Q economic growth slowing to 4.6% on year, says Song. Market participants are likely to closely watch July's Politburo meeting for signals of further stimulus, which ING anticipates could come in the form of consumption or investment support instead of a large-scale push. (megan.cheah@wsj.com)
0730 GMT - Eurozone government bond yields edge lower, moving in line with U.S. Treasury yields. Scope for Bund yields to fall much further is likely limited, says Commerzbank's Christoph Rieger. "Lower inflation numbers and no rebound in oil prices are probably needed to sustain 10-year Bund yields close to 2.85%," he says. There is no government bond supply in the eurozone on Tuesday, while the European Central Bank's forum in Sintra, Portugal could provide some further insight following President Christine Lagarde's introductory speech on Monday. The 10-year Bund yield falls 0.9 basis points to 2.846%, according to Tradeweb. (emese.bartha@wsj.com)
0720 GMT - The U.K. economy grew by 0.6% in the first quarter of 2026, data confirmed Tuesday, indicating solid momentum at the start of the year, Quilter Cheviot's Jonathan Raymond says in a note. However, GDP growth could be set to slow due to geopolitical tensions in the Middle East, as well as domestic political uncertainty, Raymond says. "The first quarter may prove to be a peak for growth rather than the start of a sustained recovery," he says. (miriam.mukuru@wsj.com)
0659 GMT - Oil prices could stay higher than prewar levels as energy firms and governments rebuild their inventories, European Central Bank Chief Economist Philip Lane says. Brent crude prices have fallen back to prewar levels in the last week. But demand for oil for restocking purposes could keep the oil price elevated and push inflation higher, Lane told Bloomberg on the sidelines of the ECB's forum at Sintra, Portugal. "From our point of view, it's very welcome that we see this decline in the price of oil. But in terms of the overall inflation impulse, the fact that we do have, maybe for a couple of years, oil prices above the prewar level, that essentially is a cost increasing impulse to the economy," he says. (edward.frankl@wsj.com)
0654 GMT - Gold prices are on track for a monthly loss of 12% despite persistent geopolitical uncertainties, as traders expect the Federal Reserve to hike interest rates this year. According to the CME FedWatch tool, traders expect three Federal Reserve rate hikes this year and are currently pricing in more than a 60% chance of a September increase. "Gold is likely to remain under pressure in the near term as easing energy prices, a resilient US dollar, and higher for longer interest rate expectations continue to reduce demand for non-yielding safe haven assets," analysts at MUFG say. In early European trading, New York gold futures rise 0.1% to $4,044.30 a troy ounce. (giulia.petroni@wsj.com)
0653 GMT - Markets likely now see the 163-165 yen range as the next key technical and psychological target for the dollar, says Masahiko Loo at State Street Investment Management in an email. This range is where "both positioning and policy risk become more acute," the senior fixed-income strategist says. "Intervention risk should not be underestimated as USD/JPY pushes toward 163-165," Loo says. The "probability of action rises materially and coordinated signaling with the U.S. Treasury cannot be ruled out, especially if a break above 163 triggers stop-driven momentum toward 165," Loo adds. The dollar is 0.2% higher at 162.25 yen, according to LSEG data. (ronnie.harui@wsj.com)
0643 GMT - The dollar rises slightly as the Supreme Court's decision Monday to block President Trump's bid to fire Federal Reserve governor Lisa Cook reduce risks to the central bank's independence. Justices said the Trump administration hadn't provided Cook sufficient due process for her to contest her removal on allegations of mortgage fraud. However, the court also gave Trump free rein to fire officials at other independent agencies for any reason. "It points to a more uncertain institutional backdrop, where independence can no longer be taken as a given across the wider policy framework, even if the Fed remains insulated for now," Deutsche Bank analysts say in a note.The DXY dollar index rises 0.2% to 101.318. (renae.dyer@wsj.com)
0636 GMT - The upcoming Bank of Japan tankan survey could indicate a further upward shift in corporate inflation expectations, says Mizuho Securities economist Ryosuke Katagi. Given that oil prices have been high since the previous March survey, companies could raise their price outlooks in the June report, he says. If that happens, it would likely heighten the BOJ's concerns about the possibility that underlying inflation will overshoot the bank's 2% target, he adds. In the March survey, companies said they expect overall prices to rise 2.6% one year ahead, higher than the previous forecast for a 2.4% increase. (megumi.fujikawa@wsj.com)
0623 GMT - The Bank of Japan's tankan corporate sentiment survey, due Wednesday, is expected to show a slight deterioration but largely shrug off the negative impact of the Middle East conflict, according to economists polled by data provider Quick. The diffusion index measuring sentiment among large manufacturers is expected at plus 16 in the June survey, compared with plus 17 in March. "While business sentiment among material sectors is believed to have deteriorated due to surging resource prices and supply shortages driven by the situation in Iran, sentiment among processing sectors likely improved on the back of robust semiconductor-related demand," says Mizuho Securities economist Ryosuke Katagi. (megumi.fujikawa@wsj.com)
0609 GMT - South Korea's gross domestic product could expand faster than expected this year, Citigroup economist Jin-Wook Kim says. Citi raises its 2026 GDP growth forecast for the country to 3.5% from its earlier estimate of 3.1%. The country's industrial production and trade data have been "surprisingly resilient," as the negative impact of higher oil prices has been offset by the government's gasoline price cap and cash-voucher program introduced under its first supplementary budget, Kim writes in a note. Strong semiconductor-led exports and manufacturing activity continue to support robust economic growth, he notes. Additional fiscal stimulus later this year and investments in technology infrastructure could provide a further boost to growth, he adds. (kwanwoo.jun@wsj.com)
0600 GMT - Deutsche Bank rates strategists revise their year-end forecast for the two- and 10-year U.S. Treasury yields. Their new forecast sees the two-year Treasury yield ending the year at 4.30%, 35 basis points higher than their previous forecast. They also raise their forecast for the 10-year yield to 4.80%, a 10-basis-point increase versus their previous projection. The revision reflects Deutsche Bank economists' updated Federal Reserve outlook for two 25-basis-point rate increases this year. The two-year Treasury yield is last trading at 4.101%, while the 10-year yield is at 4.370%, according to Tradeweb. (emese.bartha@wsj.com)
(END) Dow Jones Newswires
June 30, 2026 03:44 ET (07:44 GMT)
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