The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0917 GMT - The dollar-yen currency pair could potentially hit 170 or higher in the long term if Japan doesn't meaningfully change its monetary-policy stance, says RBC BlueBay Asset Management's Russel Matthews in an interview. Japan's economy, with reasonably strong growth and rising inflation, has fundamentals that should point toward a more rapid hiking cycle from the central bank, the senior portfolio manager for global macro strategy says. However, he expects only two increases a year, given that the Bank of Japan has been firmly directed by the Takaichi administration to only raise rates in a cautious manner, which he finds insufficient. The Japanese Finance Ministry's periodic intervention to support the yen also isn't a long-term solution to the weakness, he says. The dollar falls 0.9% versus the yen to 161.14. (megan.cheah@wsj.com)
0912 GMT - Yields on short-term gilts could decline as markets cut back expectations of interest-rate rises from the Bank of England, Jefferies' Mohit Kumar and Modupe Adegbembo say in a note. In contrast, long-dated gilt yields could stay elevated as investors place a fiscal risk premium on the bonds, the economists say. Yields on two-year gilts are last up 1.7 basis points at 4.145% while yields on 10-year gilts rise 4.1 basis points to 4.803%, Tradeweb data show. U.K. money markets currently fully price a 25 basis-point rate increase by March 2027, according to LSEG data. (miriam.mukuru@wsj.com)
0900 GMT - A key takeaway from the European Central Bank's Sintra forum is that central banks' forward guidance is effectively dead, Tickmill Group's Patrick Munnelly says in a note. Federal Reserve Chairman Warsh has become the trendsetter on this front, while ECB President Lagarde, Bank of England Governor Bailey and Bank of Canada Governor Macklem "all appeared comfortable moving further away from pre-commitment," the market strategist says. For the Fed, Warsh's five policy taskforces provide a useful institutional reason to avoid guidance: until the reviews conclude, almost everything can be described as dependent on the evidence they produce, Munnelly says. (emese.bartha@wsj.com)
0855 GMT - The dollar extends losses to reach a nine-day low against a basket of currencies as investors trim bets on the Federal Reserve raising interest rates and await key U.S. jobs data at 1230 GMT. Fed Chair Kevin Warsh reaffirmed his commitment to price stability but said inflationary risks had eased during a panel at the European Central Bank's forum in Sintra, Portugal, on Wednesday. His comments came as ADP private payrolls data and the ISM manufacturing report missed expectations. "Today's nonfarm payrolls report for June will be important in assessing the prospect of Fed rate hikes this year," MUFG Bank's Lee Hardman says in note. The DXY dollar index falls 0.5% to as low as 100.922. (renae.dyer@wsj.com)
0835 GMT - Gilts trade cheaply after a recent drop in prices and this could attract demand for the March 2037 green gilt during its auction due at 0900 GMT, RBC Capital Markets strategists say in a note. The March 2037 green gilt was launched through syndication on March 10. The green bond is less likely to be tapped again at least for the next three months, the strategists say. The earliest possible re-opening of the March 2037 green gilt is October, they say. (miriam.mukuru@wsj.com)
0824 GMT - Shares of European semiconductor companies opened lower a day after Federal Reserve Chairman Kevin Warsh declined to say whether the central bank needed to consider a rate increase later this month. Tech stocks are increasingly sensitive to rate decisions due to high valuation and debt-funded AI infrastructure spending. Chip stocks skidded Wednesday after Warsh said that anyone expecting the Fed would tolerate inflation running above its 2% goal "would be disappointed." The slide extended into Asia and Europe on Thursday. Shares of Dutch semiconductor-equipment maker ASML Holding and smaller rival ASM International are down 3.7% and 4.8%, respectively. German chip maker Infineon Technologies is down 3.3%. STMicroelectronics shares are down 1.7%. (mauro.orru@wsj.com)
0822 GMT - The euro could extend its recent losses against the dollar in coming weeks before recovering later in the year, ING's Chris Turner says in a note. While lower energy prices are a welcome development for the euro, expected U.S. interest-rate rises will be the dominant theme this summer, he says. The euro could attempt to break below $1.1300 in the near term if the market shifts towards pricing 50 basis points of U.S. rate rises this year. "But based on a house view that the Federal Reserve does not hike, we are looking for the euro to trade back into the $1.16-$1.18 range into November/December," Turner says. The euro last trades up 0.35% at $1.1415. (renae.dyer@wsj.com)
0811 GMT - Base metals trade lower in early European hours, with three-month aluminum futures falling 1.3% to $3,050.50 a metric ton and copper down 0.9% to $13,215.50 a ton. Aluminum has slumped 18% on the month as the reopening of the Strait of Hormuz boosted expectations that supplies from Persian Gulf producers will normalize, easing concerns over disruptions from a region that accounts for more than 10% of global output. Copper also edged lower after a firmer U.S. dollar softened investor appetite for dollar-denominated commodities. Traders are also awaiting signals from Washington on refined copper imports, with any policy changes likely to influence trade flows and market sentiment in the near term. (giulia.petroni@wsj.com)
0811 GMT - Tourist arrivals to Thailand are expected to recover in 2H with the de-escalation in Middle East tensions, CGS International economists say in a report. The recovery would offer a meaningful boost to the Thai economy through higher tourism receipts, stronger domestic consumption and better employment conditions. Rising tourist spending should also help to offset weakness in merchandise exports and manufacturing, while also supporting income growth among small and medium-size enterprises and workers in tourism-related industries. CGS International raises its forecast for 2026 tourist arrivals to Thailand to 33 million from 31.5 million previously. (amanda.lee@wsj.com)
0749 GMT - Gold prices tick higher after Fed Chair Kevin Warsh delivered a less-hawkish-than-expected message and as the market turns its focus to U.S. jobs data. Bullion rebounded Wednesday as Warsh's remarks eased concerns over immediate tightening. "Gold could find near-term support if expectations for additional rate hikes continue to soften, although persistent inflation and a resilient U.S. economy are likely to limit upside potential," analysts at MUFG say. In early trading, New York gold futures are up 0.1% to $4,088.10 a troy ounce. Traders now await the release of U.S. nonfarm payrolls data due later on Thursday. (giulia.petroni@wsj.com)
0739 GMT - Sterling's gains against the euro don't look sustainable given lingering political risks and a weak economic outlook, ING's Chris Turner says in a note. Andy Burnham is expected to succeed Prime Minister Keir Starmer on July 20. The focus will then turn to who Burnham appoints as Treasury chief and what policies are enacted. "The U.K. fiscal straitjacket very much limits room for manoeuvre, and it is hard to see any major spending plans coming through without tax rises," Turner says. The U.K. economy typically performs poorer in the second half of the year and some Bank of England policymakers might want restart interest-rate cuts, he says. The euro falls to a one-year low of 0.8554 pounds, according to LSEG. (renae.dyer@wsj.com)
0738 GMT - Indonesia's inflation is expected to trend higher in the near term, Kenanga economists say in a note. Rising food and transport costs, along with persistent rupiah weakness, are likely to keep price pressures elevated, although inflation is expected to remain within Bank Indonesia's target range of 1.5%-3.5%, they say. Kenanga maintains its 2026 Indonesia inflation forecast at 3.1%, up from 1.9% in 2025, but see risks skewed to the upside if the currency remains under pressure. Bank Indonesia is expected to maintain a defensive policy stance, with the possibility of another 25bp rate increase to support the rupiah and contain inflation, it adds. (yingxian.wong@wsj.com)
(END) Dow Jones Newswires
July 02, 2026 05:18 ET (09:18 GMT)
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