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.

1319 ET - Businesses are likely to continue pulling forward their spending on servers and storage arrays for at least a couple of years, Morgan Stanley analysts write in a note upgrading HPE, formerly known as Hewlett Packard Enterprise, to overweight. While accelerated enterprise spending won't last forever, and investors should be cautious as estimate revisions hit their peaks, Morgan Stanley's checks, surveys and analysis indicate "an infrastructure cycle that is proving both stronger and more durable than we previously anticipated," the analysts write. "While execution remains the key risk, we believe HPE now offers the best combination of earnings upside, valuation support and re-rating potential within our enterprise infrastructure OEM group." Shares gain 3.7% to extend this year's gain to 130%. (elias.schisgall@wsj.com)

1310 ET - Bitcoin accounted for just under 43% of the total volume traded in the cryptocurrency market in the month of July, says Cex.io in a note. That's the largest share bitcoin has taken of cryptocurrency volumes since early 2023, says the firm. "Historically, bitcoin's trading dominance tends to rise during the later stages of bear markets as investors rotate from altcoins into the relative safety of BTC," says Cex.io. The total market capitalization of the cryptocurrency market is at $2.19 trillion as of today, according to data from CoinMarketCap. That's down $10 billion over the past 30 days. (kirk.maltais@wsj.com)

1223 ET - Gold futures are up in trading Monday with the most-active contract climbing 0.4% to $4,418 a troy ounce. Gold is managing to bounce back after briefly dipping below the $4k a troy ounce mark briefly. Gold remains well off of the all-time highs seen in late-January, when the continuous contract set a new record high of $5,354.80 a troy ounce. "Any real progress toward reopening the Strait [of Hormuz] could extend this pullback toward $4,300 support, but another flare-up sends gold straight back toward record territory," says Waleed Said at GivTrade. Silver rises 2.9% to $66.085 a troy ounce. (kirk.maltais@wsj.com)

1157 ET - Apple raised the trade-in value of iPhone 15 and 16 models last week across key markets, Jefferies analysts say in a research note. Some media outlets including Mac Rumors saw the increase as a sign that price hikes were imminent for iPhone 17. But Jefferies analysts point out that Apple also dropped the trade-in price for certain models in China. "As trade-in prices are a monthly negotiated agreement between Apple and appointed dealers in each region, it may not have any implication for new iPhone selling prices," they write. "A higher trade-in value in the U.S. could drive stronger demand for the iPhone 17, but create more pressure on iPhone 18 sales given limited feature upgrades but assumed mid-teen % price hikes." Jefferies downgrades the stock to underperform from hold, cuts its price target to $263.66 from $285.56. Apple shares down 2% at midday. (connor.hart@wsj.com)

1139 ET - Canada's surprising labor-market strength of late is accompanied by slowing wage growth. That latter factor is going to keep the Bank of Canada firmly on hold, says David Rosenberg, head of market-strategy firm Rosenberg Research. July employment data surprised with a 75,100 net gain and a drop in the unemployment rate to 6.4%. Rosenberg notes that average hourly wages for permanent workers decelerated from a year ago to 3% in July, from a comparable 3.7% reading in the prior month. He says that's the weakest rise in labor costs in over 4 years. "There is no smoking gun here for the BOC to shift back to a hawkish stance," Rosenberg says. (Paul.Vieira@wsj.com, @paulvieira)

1110 ET - Higher taxes worth up to 0.8% of GDP may do the heavy lifting in funding U.K. Prime Minister Andy Burnham's policy ambitions, given markets are unlikely to tolerate big increases in borrowing and his party's lawmakers to stomach big spending cuts, Capital Economics' Ruth Gregory says. Burnham has committed to sticking to manifesto commitments, but that doesn't mean he is out of options. He could change taxes that haven't been ruled out, create new taxes, or increase the size of the tax base, she says. But notably the budget this year will likely tilt away from hikes on businesses seen in recent years towards tax hikes on capital, wealth and income. Last year's budget hiked taxes by 0.9% of GDP, Gregory notes. (edward.frankl@wsj.com)

1037 ET - Yields on U.K. and eurozone government bonds rise as oil prices advance due to lack of progress in U.S.-Iran peace talks. The lack of a resolution to the Middle East conflict is pushing up oil prices, Charles Schwab strategist Joe Mazzola says in a note. Investors are concerned about the risk of prolonged oil supply disruptions which could push inflation higher. The price of Brent crude rises 2.6% to $85.72. Ten-year gilt yields rise more than 6 basis points to a 6-day high of 4.988%, LSEG data show. The ten-year Bund yield rises 4.2 bps to 3.173%. (miriam.mukuru@wsj.com)

1027 ET - Geopolitical and inflation concerns cause markets to fully price in the prospects of the Bank of England increasing interest rates twice by the end of 2027. Investors are pricing in a total of 53 basis points of BOE rate increases by December 2027, LSEG data show. "Given the risks posed by fluctuating energy prices, extreme weather and AI-related pressures, the risks to the inflation outlook remain firmly to the upside," Daiwa Capital Markets Research team says in a note. (miriam.mukuru@wsj.com)

1017 ET - Sterling's gains following a positive U.K. jobs survey could prove limited given the Bank of England could refrain from raising interest rates, Monex Europe analysts say in a note. The survey by the Recruitment and Employment Confederation and ⁠KPMG showed an improvement in permanent job placements in July while starting salaries rose at a faster pace. "Even so, we doubt survey data shifts the dial before [the BOE's policy decision on September 17], with no change in Bank Rate still overwhelmingly favored." The euro falls to a 10-day low of 0.8541 pounds. Sterling rises 0.2% to $1.3512. (renae.dyer@wsj.com)

0948 ET - The Hungarian forint has scope to recover in the near term before long-term challenges start to weigh on the currency again, Commerzbank's Tatha Ghose says in a note. The currency has fallen recently as the Middle East conflict hits risk sentiment. If the risk backdrop stabilizes, the forint could recover somewhat, he says. "Later, however, the familiar constraints will return." Hungary's slow trend growth will be hard to address while the country's real interest rate adjusted for inflation could narrow as the central bank cuts rates and underlying inflation stops easing, he says. Commerzbank expects the euro to fall to 350-355 forints in coming months before rising towards 375 by December 2027. The euro rises 0.9% to 364.04 forints. (renae.dyer@wsj.com)

0933 ET - The U.S. labor market is showing signs of weakness, but that on its own isn't enough to drive a selloff of risk assets, Deutsche Bank credit strategists say in a note. High capital expenditure by AI companies and resilient growth is limiting the extent of job losses in the U.S. and supporting consumer confidence. This lowers the possibility of a sharp selloff in risk assets, the strategists say. In addition, last week's poor non-farm payrolls data could cause the U.S. Federal Reserve to delay possible rate increases, providing a boost to financial markets, they say. (miriam.mukuru@wsj.com)

0931 ET - Japanese investors still seek foreign investments, despite Tokyo's announced plans to redirect flows to domestic markets, Goldman Sachs economists say in a note. A Ministry of Finance report "suggests continued net purchases of foreign bonds at a sizable pace in July," Goldman says. "It may take some time to implement such a policy shift, so it feels too early to rule out. But so far, our skepticism on the low likelihood of unhedged repatriation flows due to better return prospects abroad looks fair." Goldman Sachs says a BoJ hike next month would help bring long-term strength to the yen. The yen weakens 0.7% versus the dollar, following the recent intervention.