The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0902 GMT - Bitcoin sentiment has shifted significantly since the U.S. midterms, says Derive.xyz. founder and CEO Nick Forster. "Election night was a textbook case of markets selling the uncertainty and buying the outcome," he says. Derive traders now price in a 55% chance of Bitcoin finishing above $80,000 Friday, versus 5% at its overnight low, and roughly 10% odds of falling below $78,000. The probability of Bitcoin exceeding $100,000 by Christmas rises to 5% from 3.5%, Forster notes. "Traders were paying a premium for protection ahead of the election, but once the results became clear, much of that demand disappeared." The question now is whether it can sustain its recovery once the short covering and hedge unwinding have finished, Forster says. Bitcoin last trades at $80,458. (fabiana.negrinochoa@wsj.com)
0854 GMT - U.S. midterms have rippled across markets, but for Asian bonds, oil and the Fed matter more than the political arithmetic in Congress, says Rong Ren Goh at Eastspring Investments. "A durable decline in energy prices could ease inflation pressures, restore some flexibility to Fed policy and provide a powerful tailwind for Asian duration markets," he says. Conversely, another energy shock could keep U.S. yields elevated, pressure Asian currencies and introduce more vulnerabilities in regional credit markets. Rather than positioning solely for a divided U.S. government, Goh says Asian fixed-income investors should focus on the trajectory of energy prices, U.S. monetary policy and global risk sentiment. "The biggest market moves may come from what Trump does next." (fabiana.negrinochoa@wsj.com)
0848 GMT - Investment could be the key to sustaining Indonesia's economic growth into early 2027, as household spending faces pressure and government support fades, ANZ's economists Dhiraj Nim and Sanjay Mathur say in a note. Planned projects in data centers, mineral processing, food and energy could help support activity, although it remains unclear whether they will translate into broader private-sector investment. Manufacturing activity, an improved trade balance and robust lending should provide near-term support, they say. Higher inflation and rupiah weakness could limit Bank Indonesia's room to cut interest rates in near-term, with further hikes possible if currency pressures intensify. ANZ expects Indonesia to continue posting resilient growth but moderate gradually through 4Q and early 2027. (yingxian.wong@wsj.com)
0839 GMT - London's miners rise in opening trade Thursday after oil prices tumbled and gold continues to rise. Oil prices fell 8% Wednesday in a move that will ease mining costs and help tame rising inflation that could trigger interest rate rises. Higher interest rates weigh on investments and demand, and hurt mining stocks. Gold prices hit a two-week high, aided by a softer dollar and easing Treasury yields. Precious metal miner Hochschild Mining and Fresnillo both rise 5%, while Endeavour Mining gains 6.3%. Anglo American is 2.2% higher while copper miner Antofagasta is up 2.7%.(adam.whittaker@wsj.com)
0838 GMT - Yields on 10-year U.K. government bonds, or gilts, fall to their lowest in more than two months while 30-year yields hit a four-month low as inflation fears subside due to falling oil prices. Oil falls on greater prospects of a near-term resolution to the U.S.-Iran conflict following the Democrats' win at the U.S. midterm elections. The BOE is expected to raise rates in a decision at 1200 GMT. Still, investors now price a total of 95 basis points of Bank of England interest-rate rises by end-2027, down from 105bps priced on Monday, LSEG data show. Ten-year gilt yields fall to 5.101%, the lowest since August 28, LSEG data show. Thirty-year gilt yields drop to 5.554%. (miriam.mukuru@wsj.com)
0836 GMT - The Norwegian krone could rise if the Norges Bank keeps interest rates unchanged in a decision at 0900 GMT but signals a rate increase in December, Commerzbank's Antje Praefcke says in a note. The Norges Bank raised rates in September, affording it time to wait for data before taking action again, but should keep the door open to lifting rates as soon as December, she says. This should boost the krone as the market is "far from convinced" about a December move. "More broadly, however, the krone remains primarily driven by oil and gas prices." The euro trades flat at 10.4469 krone after rising to a 10-day high of 10.4784 earlier on lower oil prices, according to LSEG. (renae.dyer@wsj.com)
0834 GMT - Asia's key risks remain largely unchanged following U.S. midterm elections, according to UOB economists in a research note. Trade, tariffs, sanctions and foreign policy authority continue to reside with the executive branch, they say. "Tariff risks for Asian exporters persist despite Democratic control of Congress," the bank says. Congressional oversight of the U.S.-Iran conflict may increase, but support for a firm stance on China suggests limited changes to broader U.S.-China strategic competition, UOB says. (tracy.qu@wsj.com)
0833 GMT - Near-term concerns over an economic slowdown have been eased by Indonesia's stronger-than-expected 3Q growth, but the momentum may prove difficult to sustain into 2027, UOB economist Enrico Tanuwidjaja says in a note. Household spending remains moderate, while recent growth was partly supported by front-loaded government spending and strong investment, which could ease, he says. Slower growth among key trading partners, uncertainty over global trade policies and subdued commodity prices may also weigh on exports, he reckons. UOB raises its 2026 growth forecast to 5.4% from 5.2%, assuming growth moderates to 5.2% in 4Q, but keeps its 2027 forecast unchanged at 5.3%. (yingxian.wong@wsj.com)
0819 GMT - The Bank of England is unlikely to raise interest rates rapidly over the coming months, although a quarter-point rate rise is widely expected at its upcoming decision at 1200 GMT, Ebury's Matthew Ryan says in a note. Investors have slightly cut back their expectations of BOE rate hikes as oil prices retreat, to 94bps by the end of 2027, down from 105bps priced in at the start of the week, LSEG data show. The drop in oil prices is likely to alleviate pressure on the BOE to act, Ryan says. "We expect the BOE to deliver a 25 basis-point hike on Thursday, but we do not think the MPC will endorse market pricing for further tightening in 2027." (miriam.mukuru@wsj.com)
0813 GMT - Gold futures rose to a two-week high in early European trading, supported by a weaker dollar and declining Treasury yields after the Democratic sweep of Congress in the U.S. midterm elections raised expectations of tighter fiscal discipline. New York futures climb 1.5% to $4,132.50 a troy ounce, with falling oil prices also lending support. Despite the rebound, the near-term outlook for the precious metal remains challenging. "Inflation concerns continue to support expectations for tighter monetary policy," analysts at ING say. "But much depends on developments in the Middle East and what they mean for energy markets." Meanwhile, silver futures rise 0.4% to $52.52 an ounce, while platinum is up 1.3% to $1,517.10 an ounce.(giulia.petroni@wsj.com)
0810 GMT - Sterling trades steady against the dollar and falls slightly versus the euro as investors await the Bank of England's policy decision at 1200 GMT. With markets pricing a 98% chance of the BOE raising interest rates by 25 basis points to 4.0%, according to LSEG, the focus is on the vote split and any signals about future tightening. Ahead of the decision, oil prices have fallen markedly, dampening rate-rise bets. The market is no longer fully pricing four rate increases over the coming year, with 93 basis points priced by December. Sterling trades flat at $1.3473 after reaching a seven-week high of $1.3506 overnight versus a weaker dollar. The euro rises 0.1% to 0.8344 pounds. (renae.dyer@wsj.com)
0754 GMT - The dollar remains under pressure after falling to a one-month low Wednesday following a sharp fall in oil prices and the Democratic sweep in midterm elections. Brent crude dropped to $93.22 per barrel, its lowest level since early September on Wednesday, on growing hopes for a resolution to the Iran war. Meanwhile, concerns that Democratic victory could result in a slowing in AI investment and reduce the prospect of additional fiscal stimulus raised concerns about weaker U.S. economic growth, hitting the dollar. The DXY dollar index falls 0.2% to 101.413, having reached as low as 101.099 Wednesday.
Comments