The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1236 ET - Bitcoin might have more fuel left in the tank to add to its recent gains, says Frederik Theissen of Glassnode in a note. Theissen points to open interest in bitcoin options, which according to data from Deribit shows that call options are building for options at strike prices ranging from $91,000 to $102,000. Trader behavior appears to be signaling that investors are holding onto bitcoin, seemingly expecting further gains ahead. "Profit taking is a fraction of what it was at the 2024-2025 tops, even though almost all short-term holders are in profit," says Theissen. Bitcoin is down 2.6% to $83,985, while ethereum falls 3.4% to $2,657, XRP is down 4.2% to $1.51, and solana is down 2.8% to $114.66. (kirk.maltais@wsj.com)
1231 ET - The PMI data signals downstream price pressures remain intense, but it shows a more mixed picture of pass-through to consumers, according to Pantheon Macroeconomics. "The composite PMI input prices index jumped to a 46-month high of 66.1, from 58.9, reflecting the renewed upward climb in energy prices. But the manufacturing output prices index dipped to 59.2, from 59.4," Senior US Economist Oliver Allen says is in a note. He adds that while this still leaves the index consistent with much firmer core goods expectations over the next few months, he still expects upward pressure on core goods inflation from energy prices to be offset by tariff-driven price increases dropping out of the year-over-year comparison. This should dovetail with further weakness in many core services components brought on by slowing wage growth. (patrick.sheridan@wsj.com)
1134 ET -- Gulf non-oil activity is recovering toward prewar levels as businesses adapt their supply chains to regional disruption, S&P Global Market Intelligence says. Aggregate activity across the G.C.C. economies covered by its PMI surveys expanded in August at a pace only just below February's prewar level, as new orders rose sharply and business confidence reached a six-month high. Supplier delivery times also improved for a fourth consecutive month amid better logistics, material availability and greater use of local suppliers. Non-oil activity growth reached a seven-month high in Saudi Arabia and a six-month high in the U.A.E., while output in Qatar contracted further, S&P says. (farhan.rafid@wsj.com)
1122 ET - Bitcoin Cash, the product of a 2017 hard-fork of bitcoin, has had an explosive week--gaining 57% in the past seven days, according to data from Coinglass. Pushing the alternative blockchain up are plans from the CME Group to launch futures contracts for both Bitcoin Cash and Uniswap starting next month. The last time Bitcoin Cash traded this high was in late May. BCH is up 6.3% to $344.89, according to Coinglass data. Other major cryptocurrencies are mostly trading negative, with bitcoin down 1.9% to $84,577, ethereum off 2.7% to $2,677, XRP losing 2.7% to $1.53, and solana back-tracking 2.4% to $115.09. (kirk.maltais@wsj.com)
1119 ET - Yields on U.K. government bonds, or gilts, climb to their highest in more than a week due to accelerating oil prices and increased prospects of the Bank of England raising interest rates at future meetings. Brent crude climbs 2.4% to $101.18 a barrel, reversing recent declines. Markets price in a 71% chance of a BOE rate increase in November, up from 66% probability priced in earlier in the session, LSEG data show. Two-year gilt yields hit 4.898%, while 10-year gilt yields rise to 5.329%, both 9-day highs, LSEG data show. (miriam.mukuru@wsj.com)
1052 ET - Treasury yields reach new highs amid signs that U.S. economic growth is strong, which means the Fed will likely need to raise interest rates to cool down inflation. September PMI readings come in higher than expected for both manufacturing and services, while the OECD boosts its global GDP growth forecast. Economic expansion adds to other forces driving yields higher, Ninepoint's Mark Wisniewski says. They include worries about U.S. government spending, inflation fears and large debt issuance by AI hyperscalers. The 10-year rises to 5.060% and the two-year to 4.868%, both on pace to settle at multi-year highs. (paulo.trevisani@wsj.com; @ptrevisani)
1051 ET - U.S. Treasurys would face a fresh round of selling pressure if renewed hopes for a diplomatic breakthrough in Iran prove to be misplaced, BMO Capital Markets' Ian Lyngen says in a note. President Trump is touting a "very good meeting" between the U.S. and Iran, along with plans for another one in the near future, raising hopes that an end to the conflict could be coming, Lyngen says. But it remains unclear if any progress has been made toward a formal deal to reopen the Strait of Hormuz, he says. If talks break down, a rebound in energy prices would weigh on Treasurys, Lyngen says. (dean.seal@wsj.com)
1034 ET - Gold futures are lower as the U.S. dollar gains amid higher U.S. interest-rate expectations. "The near-term setup for gold remains challenging," Kaynat Chainwala of Kotak Neo says in a note. "A dollar holding above 100 and October hike odds above 50% represent a structurally negative combination for non-yielding assets, and further hawkish signals ahead of the October meeting could extend the current pressure." Gold for December delivery is off 1.4% in New York at $4,315.20 a troy ounce. Silver is down 2.2% at $65.04 a troy ounce. (anthony.harrup@wsj.com)
0941 ET - Foreign investors are reducing their investments in U.S. government bonds and shifting funds towards U.S. corporate bonds, Macrohive's Bilal Hafeez says in a note. Fiscal concerns are weighing on investors' appetite for U.S. government bonds, he says. "For now, it looks like global investors have more faith in this U.S. corporate debt than the U.S. government debt." This means that domestic investors in the U.S. will need to buy more of the Treasury bonds, Hafeez says. (miriam.mukuru@wsj.com)
0928 ET - The link between AI-related stocks and bond yields could strengthen further as large technology companies issue more debt, Capital Economics James Reilly says in a note. AI-linked sectors have tended to perform well when oil prices fall, reflecting their increased sensitivity to bond yields, Reilly says. (miriam.mukuru@wsj.com)
0926 ET - The Federal Reserve's decision to raise interest rates last week has made the dollar more attractive, Standard Chartered's Steve Englander says in a note. The rate hike seems to have removed one of the market's major deterrents to buying dollar--the fear that Fed Chair Kevin Warsh would not raise rates in defiance of President Trump, he says. That seems to have unwound some, but not all, of the risk premium built into the dollar since the Treasury announced increased buybacks of long-term debt, he says. "Warsh's endorsement of the U.S. economy's vitality conveyed confidence in both yield sustainability and the attractiveness of direct and portfolio investment in the U.S." The DXY dollar index rises to an eight-week high of 100.967. (renae.dyer@wsj.com)
0924 ET - Jefferies says it sees the Board of Trade as "the single possible deliverable," from the summit between President Trump and Chinese leader Xi. Agreed in May, the mechanism cuts tariffs toward most-favored-nation levels on $30 billion of goods in each direction, scoped to non-sensitive items, the analysts say in a note. They are optimistic that Board of Trade will be emphasized as a win by both sides because they say it's the only item that doesn't concede anything strategic. "Everything else runs into incentives neither leader will override before November. Taiwan, Japan, Iran and the Russia sanctions bill stay unresolved but set the risk backdrop."
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