The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
2127 ET - Bitcoin edges higher in Asia, but remains below the $80,000 mark. Traders are keeping an eye on upcoming U.S. CPI data, which would offer clues about the Fed's interest rate decision next week. Although the prospect of a Fed rate hike has unsettled markets, it is rapidly becoming priced in, says IG's Chris Beauchamp in a note. "What matters for bitcoin traders and investors will be the question of whether this is the first move in a cycle or a one-off," he adds. Higher borrowing rates tend to weigh on risk appetite, dragging cryptocurrencies. Bitcoin is 0.1% higher at $79,344.95.(amanda.lee@wsj.com)
2021 ET - JGB futures rise in the early Tokyo session as the yen's strength is seen to ease inflationary pressures in Japan. A stronger yen tends to reduce Japan's import prices, which typically leads to lower inflation. Today's focus may also be on Japanese Finance Ministry's auction of about 2.5 trillion yen of five-year sovereign notes. Investors are likely to "take a cautious stance on the auction given the [BOJ's] Sep. [meeting] falls later in the month," SMBC Nikko Securities' Lisa Mochizuki says in a research report. "Against this backdrop, we forecast a somewhat weak auction result," the junior analyst adds. Benchmark 10-year JGB futures are 0.20 yen higher at 126.21 yen.(ronnie.harui@wsj.com)
2010 ET - Japanese stocks are lower as uncertainty over the Middle East conflict and the Fed policy persists. Electronics, machinery and auto shares are leading declines. Murata Manufacturing is down 4.1%, Mitsubishi Heavy Industries is 2.5% lower and Toyota Motor is down 2.3%. The dollar is at 153.80 yen, down from Y155.69 as of Monday's Tokyo stock market close. Investors are closely watching crude oil prices and bond yields as well as any developments in the Iran war. The Nikkei Stock Average is down 0.6% at 66019.90. (kosaku.narioka@wsj.com; @kosakunarioka)
2010 ET - The yen strengthens further against the dollar and other currencies in early Asian trade. Sentiment toward the Japanese yen has shifted "materially" over the past week, CBA's Samara Hammoud says in a research report. This reflects "speculation about a potential change in the Government Pension Investment Fund's asset allocation and rising expectations of faster Bank of Japan rate hikes," the international economist and currency strategist says. The U.S. dollar falls 0.4% to 153.76 yen after earlier touching Y153.58, its lowest intraday level since mid-February, LSEG data show. The Australian dollar slips 0.4% to Y110.98. (ronnie.harui@wsj.com)
1945 ET - Japanese stocks may decline as uncertainty over the Middle East conflict and the Fed policy continues. Nikkei futures are down 0.9% at 65860 on the SGX. The dollar is at 153.96 yen, down from Y155.69 as of Monday's Tokyo stock market close. Investors are focusing on crude oil prices and bond yields as well as any developments in the Iran war. The Nikkei Stock Average rose 2.1% to 66399.84 on Monday. (kosaku.narioka@wsj.com)
1933 ET - Deputy Governor of the Reserve Bank of Australia, Andrew Hauser, will give a television interview at 0930 GMT. His comments could well lock in market pricing for a further rise in interest rates at the central bank's policy meeting on Sept. 28-29. Hauser has been blunt in warning recently that inflation remains "too high," and the recent run of data has included signs stubborn inflation pressures and strong GDP growth. Hauser's comments are usually direct, but also balanced. A hawkish message is highly likely. (james.glynn@wsj.com; X @JamesGlynnWSJ)
1932 ET - A flood of Australian confidence data in the coming trading day is set to put a sharp focus on how consumers and businesses are assessing the rising risk of higher interest rates, and the impact of big falls in house prices. All this is happening against the backdrop of elevated oil prices and ongoing international shocks. With the Reserve Bank of Australia warning that inflation is simply too high, some economists expect two more interest rate increases this year. A solid job market has supported spending over recent months. (james.glynn@wsj.com; X @JamesGlynnWSJ)
1901 ET - U.K. retail sales had a disappointing end to the summer season, as consumer demand cooled off in August, according to a report from the British Retail Consortium and KPMG. For the period from Aug. 2-29, total retail sales in the U.K. rose 0.7% on year, according to the data. "With the cost of households bills rising, and set to rise further, many shoppers have clearly been tightening their belts," BRC's Harvir Dhillon says. Retailers' focus is now on the back-to-school period, with planning for the final quarter of the year and the lead-in to Black Friday month under way, the report says. (andrea.figueras@wsj.com)
1840 ET - Forsyth Barr is upbeat about Serko's fledgling Serko.ai product. Serko.ai is a multi-agent AI travel assistant that allows users to plan, book, and manage travel via a natural-language interface. "We exited the demonstration with increased confidence in both the product's delivery timeline and the quality of its user experience," says analyst James Lindsay. Serko did a closed beta launch of the product in the U.S. in May, and a broader U.S. open beta is on track for 3Q27. Serko plans to initially target low-complexity U.S. small-to-medium-sized businesses, Forsyth Barr says. "While the commercial model remains under development, we understand that a percentage-of-booking-value checkout fee is the likely initial approach, with potential for seat-based licensing as the product evolves," says Forsyth Barr, which rates Serko at outperform. (david.winning@wsj.com; @dwinningWSJ)
1130 ET - A widely expected 25-basis-point interest-rate hike by the European Central Bank on Thursday, which would bring the deposit rate to 2.50%, places the ECB into a critical monetary policy crossroad, ICM InvestmentBank AG's Michael Klawitter says in a note. Further rate hikes that markets currently price in "would push key interest rates into restrictive territory, thereby weighing on economic growth," the chief economist and portfolio manager says. This effect would be amplified by the fact that financing conditions for the economy have already deteriorated in recent months, driven by a significant rise in long-term yields, he says. The ECB is also aware that higher interest rates don't eliminate the root causes of high energy prices, he says. (emese.bartha@wsj.com)
1027 ET - Issuance of new euro-denominated credit is expected to rise towards the end of 2026, Societe Generale's Juan Valencia says in a note. New euro credit supply is expected to reach over 900 billion euros ($1.04 trillion) this year, from 626.3 billion euros so far this year, he says. The heavy credit issuance is likely to be met by strong investor demand, Valencia says. (miriam.mukuru@wsj.com)
0939 ET - Investors are increasingly pricing in the possibility of the Bank of England raising interest rates in the coming months due to inflation concerns as oil prices rise. Markets fully price in one quarter-point BOE rate increase by December, and a second rate hike by March 2027, LSEG data show. Brent crude price rises 1.1% to $97.39 per barrel.
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