Global Forex and Fixed Income Roundup: Market Talk

The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.

1051 ET - Emerging-market bonds look attractive as they are likely to benefit from global economic growth, UBS Global Wealth Management strategists say in a note. Emerging-market economies also have a wealth of commodities which should support performance, the strategists say. Emerging-market bonds offer diversification and favorable yields, they say. (miriam.mukuru@wsj.com)

1048 ET - Mexican peso stability after the U.S. declined to renew the USMCA, sending the trade pact into a process of annual reviews, shows the decision was widely expected, HSBC Mexico's chief economist José Carlos Sánchez says in a note. The timeliness and clarity of the U.S. statement are ultimately positive for the peso, he says. Althougha review process is less ideal than a "clean" renewal, that was never a realistic expectation and "we still see Mexico benefiting from greater access to the U.S. economy than other emerging market peers." The peso trades at 17.47 to the U.S. dollar, compared with 17.56 yesterday.(anthony.harrup@wsj.com)

1038 ET - Odds of an interest rate increase by the Fed decline in futures markets as slower-than-expected job creation in June gives the central bank fewer reasons to be hawkish. Investors are pricing in 18% odds of a July hike, down from 29% yesterday, according to the CME's FedWatch tool. Odds of at least one cut by year end fall to 76% from 83%. The BLS reports 57,000 new jobs in June, while economists surveyed by WSJ expected 115,000. "The combination of more tepid data on the labor market and the sharp decline in oil prices should reduce the likelihood of rate hikes from the Fed," AllianceBernstein's Eric Winograd writes. (paulo.trevisani@wsj.com; @ptrevisani)

1016 ET - The dollar's pullback after Thursday's weaker-than-expected U.S. nonfarm payrolls print could have further to go, Monex Europe analysts say in a note. The Federal Reserve is likely to leave interest rates unchanged, defying expectations for rate increases, they say. Furthermore, Monex doesn't share market optimism that AI will generate a substantial, immediate boost in activity. This leaves markets primed for disappointment, with the dollar also set to suffer, the analysts say. The DXY dollar index falls 0.7% to 100.708 after reaching a two-week low of 100.558 shortly after the jobs data, according to LSEG, and Monex expects the DXY to fall to 98.1 over the next 12 months. (renae.dyer@wsj.com)

0951 ET - The June jobs report changes the labor-market story, says Sung Won Sohn, Chief Economist at SS Economics. "The economy is not shedding jobs in a recessionary way, but the hiring engine is sputtering. Payroll growth is slower, revisions are negative, labor-force participation has fallen, leisure and hospitality is weakening, and job gains remain heavily dependent on health care and social assistance," he says. The June numbers show that this is no longer a booming labor market, Sohn say. "It is a 'low-hire, low-fire' economy with less margin for error. The Fed is now less likely to hike soon, the dollar has weakened on that expectation, and investors will increasingly ask if the cooling trend will continue." (patrick.sheridan@wsj.com)

0927 ET - The government says leisure and hospitality employment declined by 61,000 in June, reflecting weaker than usual seasonal hiring. That contrasts sharply with the 70,000 gain in May's report. "It looks like the World Cup hiring spree was a one-month phenomenon in May," according to Brian Bethune of the Boston College Economics department. Thus far in 2026, the BLS says employment in leisure and hospitality has shown little net change. Elsewhere in the report, employment in professional and business services continued to trend up in June with a rise of 36,000. The industry has added 172,000 jobs since a recent low in October 2025. Employment in health care continued its upward trend, with a rise of 22,000, but at a slower pace than the average monthly gain over the prior 12 months. (patrick.sheridan@wsj.com)

0922 ET - Slower-than-expected U.S. job creation in June supports an increase in demand for gold, Petros Pantzari, from brokerage firm Monaxa, writes. Payrolls were reported at 57,000, lower than WSJ consensus forecast of 115,000. Treasury yields and the dollar slipped on the news, while gold futures are up 2%. "Gold is moving higher because the weak U.S. jobs report has reduced the fear of another Fed rate increase," Pantzari says. He adds the data gives traders a reason to believe the Fed may stay on hold "or even move closer to rate cuts" if labor markets weaken further. That would push down yields, undermining the dollar, "both supportive for gold," Pantzari says. (paulo.trevisani@wsj.com; @ptrevisani)

0916 ET - The U.S. decision not to renew its trade pact with Mexico and Canada sends the USMCA into a process of annual reviews. "While far from ideal from an investment-certainty perspective, the treaty remains in force and...continues providing a legal framework that extends through its existing horizon unless replaced, terminated, or subsequently renewed," Gabriel Casillas and Nestor Rodriguez of Barclays say in a note. The main challenge remains policy uncertainty, rather than existing tariff levels, and companies may continue to postpone investment decisions, they write. "Firms can often navigate tariffs, rules-of-origin requirements, and regulatory changes. What is harder to manage is uncertainty regarding the future operating framework." (anthony.harrup@wsj.com)

0914 ET - The Japanese yen's modest recovery against the dollar appears more consistent with profit-taking and caution about foreign exchange interventions as opposed to outright action to support the currency, Capital.com's Daniela Hathorn says in a note. "While [Japan's] officials have continued to warn they stand ready to respond to excessive currency moves, today's decline lacks the abrupt, disorderly price action that has typically characterised previous interventions." Instead traders are reducing bets on a stronger dollar after its rise became stretched. Volatility could remain elevated on intervention risks but the broader trend favors dollar strength, she says. The dollar falls more than 1% to a two-week low of 160.62 yen after weaker-than-expected U.S. jobs data, LSEG data show. The dollar hit a 40-year high of 162.83 Wednesday. (renae.dyer@wsj.com)

0908 ET - Yields on U.K. government bonds, or gilts, turn lower along with U.S. Treasury yields after weaker-than-expected U.S. non-farm payrolls data. The data reduce the prospects of the U.S. Federal Reserve raising interest rates in the near term. The U.S. added 57,000 jobs in June, significantly less than the consensus forecast of 115,000 new jobs by economists in a WSJ poll. Ten-year gilt yields last trade at 4.791% following the data, from 4.816% beforehand, albeit still up around 3 basis points on the day, Tradeweb data show. (miriam.mukuru@wsj.com)

0905 ET - Bitcoin rises further to reach a new one-week high after U.S. nonfarm payrolls data came in weaker than expected, reducing the case for interest rate rises. Payrolls rose 57,000 in June, below the 117,000 forecast by economists in a WSJ survey. While the unemployment rate unexpectedly fell to 4.2%, the payrolls print gives traders enough reason to believe the Federal Reserve could keep interest rates on hold or even resume rate cuts if the labor market weakens further, Monaxa's Petros Pantzari says in a note. Bitcoin rises to as high as $61,540 after the data from $61,212 beforehand. (renae.dyer@wsj.com)

0900 ET - A lower-than-expected jobs number sends gold futures higher, with the yellow metal now up 1.4% after being slightly negative before the report's release. Only 57,000 nonfarm jobs were added in June, says the Bureau of Labor Statistics. That is below analyst forecasts of 115,000 jobs added. The surprise sent equities and commodities higher, with fears around future interest rate hikes calmed by the report as well as comments from Fed Chairman Kevin Warsh that toned down interest rate worries. Most-active silver is also up, climbing 2.1%. (kirk.maltais@wsj.com)

(END) Dow Jones Newswires

July 02, 2026 10:51 ET (14:51 GMT)

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