The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0859 ET - Positive sentiment around bitcoin could build if it can consolidate around, or preferably above, the key $80,000 level, Trade Nation's David Morrison says in a note. Bitcoin's sideways movement from early July to mid-August was an extended period of consolidation which helped to build momentum for its surge higher, wiping out bets against bitcoin and providing a basis for fresh buying, he says. A similar consolidation could help bitcoin, he says. Bitcoin rises 0.1% to $84,457 after reaching its highest level since January at $87,315 Monday, LSEG data show. (renae.dyer@wsj.com)
0754 ET - Many investors and traders are likely looking forward to closing out a brutal week for bonds, but next week another potential worry awaits, September payrolls. "Given the decline in initial and continuing jobless claims over the month, the risk of a stronger September reading is rising, which could justify markets pricing in a high probability of an October hike," says JPMorgan in a note. But the economists at Barclays aren't convinced the Fed will move next month. "We expect the FOMC to remain mindful of inconsistencies between the payroll and household surveys, where we expect another flat reading for the unemployment rate (at 4.1%) amid low labor supply growth. In our view, this combination would keep an FOMC hold in play for the October meeting, as it continues to assess data developments, before proceeding with a 25bp rate hike in December." (patrick.sheridan@wsj.com)
0727 ET - The Swiss franc faces further losses as it hits a 16-month low against the dollar and a one-week low versus the euro, ING's Francesco Pesole says in a note. The market is fully pricing an interest-rate rise by the Swiss National Bank by March but this looks unlikely, he says. The SNB held rates at 0% on Thursday and signalled little concerns about inflationary risks. The dollar rises to as high as 0.8298 francs and ING expects it to reach 0.8500 if the Federal Reserve raises rates again in October. The euro rises to a high of 0.9455 francs and ING sees it potentially rising above 0.9480. (renae.dyer@wsj.com)
0724 ET - The dollar's strength should persist until next year, supported by expectations the Federal Reserve will raise interest rates further, Morgan Stanley strategists say in a note. Rate pricing should remain at least as elevated as current levels, they say. Continued U.S. economic resilience and/or persistently high energy prices could prompt a further increase in pricing, they say. Moreover, euro-negative risk premium could increase. "The French Presidential election in spring 2027 remains a key event risk for European macro, while investors increasingly discuss risks of elections in Germany and Italy as well." Morgan Stanley expects the DXY dollar index to rise to 104.000 and the euro to fall to $1.10 by mid-2027, from current levels of 101.047 and $1.1397, respectively. (renae.dyer@wsj.com)
0656 ET - Climbing energy prices means the Bank of England is now on course to tighten policy, Morgan Stanley's Bruna Skarica and Fabio Bassanin say in a note. They change their BOE call to two quarterly interest-rate hikes in November and February. "While we still think--and with a decent degree of conviction--that any signs of an improvement in the supply in oil and refined products would leave the BOE on hold from here, it is challenging to maintain a prolonged hold as a modal call amid the recent Middle East newsflow," they say. The only catalyst for even stronger tightening would be a materially fiscally loose and inflationary budget announced next month, they say. (edward.frankl@wsj.com)
0649 ET - A change in Prime Minister, combined with a boost to consumer spending from the summer's hot weather, has helped drive three straight monthly increases in U.K. consumer confidence for the first time since summer 2024, MHA's Joe Nellis says. The consumer sentiment index edged up to minus 13 in September, from minus 14 in August. However, recent gains could come under threat amid rising inflation, higher borrowing costs and weaker job prospects, he says. Andy Burnham's first budget announcement next month could also dampen confidence. "The fiscal situation remains unsustainable and tax rises are inevitable," Nellis says. "Creating the conditions for a sustained improvement in consumer confidence--rather than a short-lived spike - will be a major challenge for the government," he adds. (edward.frankl@wsj.com)
0550 ET - The Chinese economy's transformation has yet to happen, Fan Gang, economics professor at Peking University, says at an event in Singapore. "We've been saying for years that we shouldn't rely so much on selling stuff abroad, but exports are still holding up the whole economy," Fan says. China's trade surplus is actually getting bigger, he notes. Speaking on a panel at the FutureChina Global Forum, he says that weak consumption isn't just a problem that happened recently, but a problem that has been there for a long time. Improvements in employment and social-welfare systems are needed for China to have a real-economy transformation, Fan adds. (tracy.qu@wsj.com)
0514 ET - Malaysia's headline inflation could rise moderately to 1.9% this year instead of 2.1% forecast previously, RHB's Chin Yee Sian says in a note. Softer price pressures and higher fuel-subsidy quotas should keep inflation manageable, the economist writes. For the remainder of 2026 and into 2027, inflation will be shaped by global commodity prices, domestic policy changes and potential food-price pressures, she notes. Geopolitical uncertainties and prolonged Hormuz Strait disruptions could keep crude-oil prices volatile, but the pass-through from higher producer costs should be gradual. Price controls, subsidies and a stable ringgit may provide support, she adds. RHB expects Bank Negara Malaysia to hold rates at 2.75% in November before hiking by 25 bps in 1H in a policy-normalization move. (yingxian.wong@wsj.com)
0514 ET - The Norwegian krone falls to a three-and-a-half week low against the euro, reversing gains after the Norges Bank raised interest rates by 25 basis points to 4.5% Thursday. The Norges Bank simply brought forward an anticipated rate rise and rates are now expected to remain unchanged until the end of the year, Commerzbank's Michael Pfister says in a note. "For the krone to benefit more significantly, Norges Bank will likely need to signal an even tighter monetary policy in the coming months." A fall in oil prices is also weighing on the krone as Norway is a major energy exporter. The euro rises to as high as 10.8550 krone, having reached a 10-day low of 10.7451 Thursday, according to LSEG. (renae.dyer@wsj.com)
0500 ET - The prospect of a renewed rise in energy prices, strong U.S. economic data and a further widening in yields between French and German government bonds have the potential to weaken the euro, ING's Francesco Pesole says in a note. The euro could reach support levels of $1.1320-$1.1330 quickly if oil prices take another sharp leg higher and/or upcoming U.S. data are better than expected, he says. The risk of a wider French-German yield spread due to a deterioration in France's fiscal outlook is also unlikely to help the euro, Pesole says. The euro rises 0.1% to 1.1388 after reaching an eight-week low of $1.1358 Thursday, according to LSEG. (renae.dyer@wsj.com)
0446 ET - The decline in Germany's consumer confidence index reflects the continued rise in energy prices, domestic political turmoil and the recent jump in fuel prices following the expiry of the temporary tax cut, Pantheon Macroeconomics' Claus Vistesen says in a note. The sentiment indicator, published by the Nuremberg Institute for Market Decisions and GfK, fell to minus 30.6 in October, from minus 26.8 in September. The data signal a cautious German consumer, focused on building savings and worried about future income, Vistesen says. This contrasts with the recent upbeat message from the Ifo and PMI surveys. "We're forecasting modest growth in German consumer spending in the third and fourth quarters of just 0.1% and 0.2%, respectively," he says. (edward.frankl@wsj.com)
0433 ET - Japanese Finance Minister Satsuki Katayama's remarks Friday about President Trump expressing concerns over the yen's weakness raises the prospect of further joint U.S.-Japanese currency interventions, MUFG Bank's Derek Halpenny says in a note. The comments underline Japan's ongoing efforts to portray that it remains willing to stem the yen's weakness as a continued joint strategy, he says. "It's unusual for the U.S. to act jointly with Japan beyond one occasion so acting jointly again would be a strong message to the markets." That is possible given the Bank of Japan raised interest rates last week and indicated there was more to come, he says. The dollar falls 0.5% to 158.07 yen after Katayama's comments.
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