The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1046 ET - The U.K. Debt Management Office's planned gilt syndication of the January 2056 gilt could have a transaction size of between 4.5 billion pounds ($6 billion) and 5 billion pounds, RBC Capital Markets strategists say in a note. The DMO said that it is expected that the syndication "will be a modestly-sized transaction, subject to market feedback closer to the time". RBC strategists say that the syndication's implied transaction size is 5 billion pounds nominal, given the DMO's target to raise 15 billion pounds through three long conventional gilt syndications in the current fiscal year. (miriam.mukuru@wsj.com)
1019 ET - The impact of last week's joint U.S.-Japan intervention to strengthen the yen could prove limited, ING's Chris Turner says in a note. The intervention doesn't change the fact that the Federal Reserve is close to raising interest rates and Japan is running a loose set of monetary and fiscal policies which are weighing on the yen, he says. "We struggle to see this bilateral action driving dollar-yen sustainably below 155." Nevertheless, it could prevent investors from pushing the dollar above 160 yen while buying time for Japan to introduce more yen-positive policies such as incentives to invest in domestic assets, he says. The dollar falls 0.6% to 156.69 yen after reaching a three-month low of 155.21 overnight, according to LSEG. (renae.dyer@wsj.com)
1005 ET - The Hungarian forint stands to benefit the most among its central European peers from hopes for Middle East diplomacy due to its sensitivity to global risk sentiment, ING's Frantisek Taborsky says in a note. "The lack of further escalation points to a more constructive mood in the days ahead, while new highs in euro-dollar should support some gains in Central and Eastern European currencies." The euro falls 0.2% to 363.75 forints. It reached a one-week high of 364.94 on Friday, LSEG data show. The forint's decline Friday was driven by risk aversion and Hungary's temporary closure of a nuclear power plant which could affect both industrial production and energy imports, Taborsky says. (renae.dyer@wsj.com)
1003 ET - The housing market is settling into its expected summer slowdown, with sellers increasingly adjusting prices while buyer demand continues to hold up, Realtor.com says. The national median list price was $428,950 in July, essentially unchanged from June but down 2.4% from a year ago. The share of listings with a price reduction rose to 20%. Pending sales increased 1.3% year-over- year, though momentum has slowed from 4.1% in May and 3.7% in June. The median home spent 57 days on the market in July, four days longer than in June. Price cuts remain least common in the Northeast, at 13.7% of listings, and the Midwest, at 18.7%. Price-cut shares remain below last year's levels in the South, at 21.3%, and West, at 21.9%. (chris.wack@wsj.com)
1001 ET - The Czech koruna could fall if the Czech National Bank leaves interest rates unchanged at 3.75% on Thursday and sounds cautious about raising rates in future, ING's Frantisek Taborksy says in a note. The CNB's latest forecasts and forward guidance could dampen market pricing for further rate rises after the central bank lifted rates in June, he says. That could push the euro above 24.250 koruna as the exchange rate remains largely driven by the interest rate differential, he says. The euro trades flat at 24.195 koruna.(renae.dyer@wsj.com)
0957 ET - Japan's monetary and fiscal policy will determine whether the yen's recovery is sustained following a joint U.S.-Japan currency intervention last week, Rabobank's Jane Foley says in a note. "While we are optimistic regarding the changes to Japan's economy in recent years, the market will likely have to become more confident that the BOJ can hasten the pace of rate hikes and see more reassurances on fiscal prudence for the yen to recover significant ground." However, the threat of further interventions and a weaker dollar should prevent the yen from falling too far for now, she says. The dollar falls 0.7% to 156.44 yen after reaching a three-month low of 155.21 overnight, LSEG data show.(renae.dyer@wsj.com)
0838 ET - Treasury yields and the dollar decline amid renewed hopes of an agreement to reopen the Strait of Hormuz. WTI crude falls 7% and trades below $80. U.S. and Japanese officials confirm a joint intervention to prop up the yen against the dollar took place Friday. The WSJ Dollar Index slips 0.1% as the greenback weakens 0.6% against the yen. Nonfarm payrolls are due Friday and expected to increase to 85,000 from 57,000, according to a WSJ consensus. Unemployment is forecast to tick higher to 4.3% from 4.2%. The 10-year yield is at 4.674%, down from Friday's settle of 4.743%. The two-year falls to 4.242% from 4.289%. (paulo.trevisani@wsj.com; @ptrevisani)
0834 ET - Food inflation will be higher for longer as a result of climate-related supply shocks, lower investment and other factors, UBS analysts write. High welfare standards for livestock, as well as higher labor costs and fast-growing demand will also lift prices. Advances in agricultural technology might reduce costs and improve farm profitability, but would only modestly ease food prices. If food inflation persists, a greater proportion of customer wallets will go toward supermarkets, the analysts say. Such a development means food retailers might benefit from higher food prices, the analysts say. However, consumers might in turn spend less on eating out and on other discretionary, non-food consumer goods. (josephmichael.stonor@wsj.com)
0810 ET - Bitcoin and ether fall even as risk sentiment improves after President Trump said he called off an attack against Iran and said talks would begin Monday. "Cryptocurrencies have been left out of the general excitement, and now look at risk of tipping over into a fresh deep correction," IG analyst Chris Beauchamp says in a note. Cryptocurrencies stand or fall on momentum and sellers appear to be getting the upper hand, he says. Bitcoin falls 1.2% to $62,687, LSEG data show. Ether drops 2.1% to $1,842. (renae.dyer@wsj.com)
0809 ET - Investors lower their expectations of the Bank of England increasing interest rates in the coming months as oil prices fall due to easing tensions in the Middle East. The U.S. announced plans to hold talks with Iran on Monday, raising prospects of a potential resolution to the Middle East conflict and the possible reopening of the Strait of Hormuz. Markets currently price in a total of 26 basis points of BOE rate rises in 2026, down from 30 basis points priced in last week, LSEG data show. (miriam.mukuru@wsj.com)
0805 ET - Bahrain is likely to receive additional financial support from Gulf neighbors if the renewed closure of the Strait of Hormuz persists, Capital Economics says. The consultancy says Bahrain's foreign-exchange reserves fell to just over $2 billion in June from $6 billion in March, leaving policymakers with limited room to defend the dollar peg or support the balance of payments. While a prolonged Hormuz closure would raise the risk of devaluation and sovereign default, Saudi Arabia or the UAE would probably step in to prevent broader concerns over Gulf dollar pegs, the consultancy says. (farhan.rafid@wsj.com)
0802 ET - The threat of further joint U.S.-Japan currency interventions and the prospect of the Bank of Japan raising interest rates at a faster pace could discourage speculators from betting on a weaker yen, MUFG Bank's Lee Hardman says in a note. Treasury Secretary Scott Bessent showed willingness for further interventions with Japan after taking joint action to support the yen last week. Support from the U.S. means interventions will be viewed as more credible, Hardman says. Meanwhile, BOJ Governor Kazuo Ueda's comments at Friday's meeting suggest another rate rise is possible as soon as September, he says. The dollar falls 0.6% to 156.69 yen after reaching a three-month low 155.21 overnight, LSEG data show.
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