The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1302 ET - Bitcoin treasury firm Strategy Inc., which holds the largest bitcoin reserves in the world, announced a new purchase of bitcoin to start the day. The firm buying 250 BTC, bringing its total ownership to 848,250 coins, at an average buying price of $75,444 across its treasury. This is the second purchase the bitcoin treasury made since the start of the month, according to Strategy's data. Strategy's purchases are often a catalyst for how bitcoin moves in a given trading day. Bitcoin falls 1%, ethereum is 0.2% lower, and XRP is down 2.2%. (kirk.maltais@gmail.com)
1239 ET - Bitcoin's next big test is Wednesday's CPI report, says analysts with Bitfinex in a note. "The question for this week is whether Wednesday's U.S. Consumer Price Index (CPI) report changes the rate and yield outlook enough to give bitcoin room to move, and whether spot demand is there to carry it," says the firm. An upward movement in prices would potentially demonstrate improved spot demand, as would an improvement of net inflows into bitcoin ETFs, says Bitfinex. Last week was net negative for ETF flows, according to data from Coinglass -- landing at a net outflow of $678.9 million. Bitcoin is down 1% to $82,816. (kirk.maltais@wsj.com)
1234 ET - Gold futures are lower with the U.S. dollar gaining, while oil futures rise. Strong central bank demand and inflows into gold-backed ETFs have provided support for the metal amid shifting interest-rate expectations, geopolitical tension and global market uncertainty, says Paul Hoffman, a data analyst at BestBrokers.com, in a note. Prices have responded to changing expectations around monetary policy, movements in the U.S. dollar and shifts in investor positioning, "while September's correction demonstrated how quickly sentiment can turn even during a broader period of strong demand," he adds. Gold for December delivery is off 0.6% in New York at $4,189.30 a troy ounce. Silver is down 0.8% at $60.555 a troy ounce. (anthony.harrup@wsj.com)
0826 ET - Governments are increasingly dependent on yield-demanding private-sector investors for long-term borrowing, adding to fixed-income turbulence. "Global bond markets are adjusting to a less forgiving buyer base," TS Lombard's Alexandros Xenofontos write. They say insurers, asset managers and leveraged investors such as hedge funds are stepping into a void left by central banks. While government institutions buy and hold bonds for structural reasons, the new crop of buyers tend to purchase only when the relative value and financing cost are attractive enough. "Governments will still fund themselves, but increasingly at prices set by more discretionary investors," TS Lombard says. (paulo.trevisani@wsj.com; @ptrevisani)
1226 ET - Gold futures are lower with the U.S. dollar gaining and oil futures rising. Strong central bank demand and inflows into gold-backed ETFs have provided support for the metal amid shifting interest-rate expectations, geopolitical tension and global market uncertainty, says Paul Hoffman, a data analyst at BestBrokers.com, in a note. Prices have responded to changing expectations around monetary policy, movements in the U.S. dollar and shifts in investor positioning, "while September's correction demonstrated how quickly sentiment can turn even during a broader period of strong demand," he adds. Gold for December delivery is off 0.6% in New York at $4,189.30 a troy ounce. Silver is down 0.8% at $60.555 a troy ounce. (anthony.harrup@wsj.com)
1220 ET - Governments are increasingly dependent on yield-demanding private-sector investors for long-term borrowing, adding to fixed-income turbulence. "Global bond markets are adjusting to a less forgiving buyer base," TS Lombard's Alexandros Xenofontos write. They say insurers, asset managers and leveraged investors such as hedge funds are stepping into a void left by central banks. While government institutions buy and hold bonds for structural reasons, the new crop of buyers tend to purchase only when the relative value and financing cost are attractive enough. "Governments will still fund themselves, but increasingly at prices set by more discretionary investors," TS Lombard says. (paulo.trevisani@wsj.com; @ptrevisani)
1059 ET - Material shortages in the German manufacturing sector rose somewhat in September, Germany's Ifo Institute says. A total of 14.6% of companies reported shortages of intermediate products, up from 13.3% in August, although there is still no sign of a broad-based rise in supply, it says. "In individual industries, however, shortages of intermediate products are once again becoming a bigger problem," says Klaus Wohlrabe, head of surveys at Ifo. Supply remains strained in particular among manufacturers of data-processing equipment and electronic and optical products, where the share of companies with material shortages rose from 33.2% to 37.8%, Ifo says. "In parts of the electronics industry in particular, strong demand is running up against tight material supplies," Wohlrabe says. (edward.frankl@wsj.com)
1055 ET - Goldman Sachs analysts are feeling more bullish on global stocks for the short term, citing a boost from strong earnings for markets already trading near all-time highs. "Our macro baseline remains constructive: growth should stay healthy, especially for earnings, recession risk remains low, and inflation momentum should moderate into 2027," the analysts say in a note. "This combination of resilient growth and easing inflation points to more of a 'Goldilocks' backdrop, which should be more supportive for balanced portfolios." The analysts raise their three-month view on stocks to overweight from neutral, matching their positive stance over a 12-month timeline. (connor.hart@wsj.com)
1055 ET - The EU's plan to curb imports of Chinese hybrid cars into the 27-member bloc offers some short-term relief for European carmakers but doesn't remove the risk of further escalation, Oxford Economics says in a report on Monday. "Chinese car makers are widely expected to ramp up their efforts to establish domestic production in Europe to bypass the import quota," Chief Europe Economist Angel Talavera writes in the report. The deal does not address issues linked to Chinese exports in other industries, Talavera adds. "Ultimately, Europe has little power to change the underlying imbalance, because it is systemic in nature and reflects Chinese domestic conditions: large industrial subsidies, an undervalued currency and a Chinese domestic market that cannot absorb the country's production means that sectoral measures work only at the margin," the report says. (edith.hancock@wsj.com)
1054 ET - Supply of new corporate bonds could remain subdued due to high volatility in sovereign bond markets, Societe Generale's Juan Valencia says in a note. The corporate blackout period could also limit credit issuance, he says. "But if the sovereign bond market calms down, we suspect we'll see some strong issuance volumes, despite the blackouts, as companies make up for time lost in the past fortnight." (miriam.mukuru@wsj.com)
1039 ET - If U.K. Treasury Chief John Healey delivers prudent government spending and revenue plans at the October 28 budget, U.K. assets could gain, UBS Global Wealth Management's Dean Turner says in a note. U.K. government bonds carry a fiscal risk premium, which could begin to decline if investors are reassured about the fiscal sustainability, Turner says. "The upcoming budget is primarily about fiscal credibility; the size of the buffer matters less." U.K. ten-year government bonds hit a 19-year high of 5.527% last week, according to LSEG data, mainly due to inflation concerns and geopolitical uncertainty. They last trade down 1.2 basis points at 5.443%. (miriam.mukuru@wsj.com)
1037 ET - The European Union's agreement with China to curb its exports of hybrid cars into the region could be a blueprint for future deals, Capital Economics says in a note Monday. "There is mounting pressure from other industries such as chemicals and machine tools for similar for protection," it says. The EU said it will cap hybrid and plug-in hybrid car imports from China at 350,000 units annually for four years. "If extended to all the industries that are targeted by the EU 's Industrial Accelerator Act this could potentially affect around a quarter of all imports, which would have a bigger impact on the wider economy," Capital Economics says, adding that it remains to be seen whether China will agree to similar restrictions on other and potentially much larger sectors.
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