The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1101 GMT - The cost of insuring euro credit against default stays steady as investors await U.S. jobs data due at 1230 GMT. Economists in a WSJ poll expect the data to show 115,000 new jobs created, fewer than the 172,000 new jobs recorded in May. The jobs data matter because they will indicate "genuine labor-market strength or expose a narrow, uneven jobs engine with more slack than the unemployment rate admits," Tickmill Group's Patrick Munnelly says in a note. The iTraxx Europe Crossover index of euro high-yield credit default swaps is unchanged at 245bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)
1031 GMT - U.S. Treasury yields rise though the dollar falls ahead of closely-watched employment data for June due at 1230 GMT. The dollar falls "amid easing geopolitical concerns as U.S.-Iran talks and diplomatic efforts continue," says Kudo.com's Konstantinos Chrysikos in a note. "Progress on this front could limit safe-haven demand and weigh on the dollar," he says. Any setbacks could drive more flows into the currency, however. Meanwhile, market expectations of Federal Reserve rate hikes keep Treasury yields elevated. The two-year Treasury yield rises 1 basis point to 4.173% and the 10-year yield is up 1.8 basis points to 4.491%, according to Tradeweb. The DXY dollar index falls 0.3% to 101.078, having hit a nine-day low of 100.922 earlier. (emese.bartha@wsj.com)
0949 GMT - The Japanese yen recovers to a two-week high against the dollar as markets pare U.S. interest rate rise pricing slightly and traders remain sensitive to the prospect of currency interventions by Japanese authorities. Federal Reserve Chair Kevin Warsh said on Wednesday that inflation risks have eased. "The proximity of the U.S. holiday tomorrow is also making market participants nervous over the risk of Japan intervening in the FX market to support that yen," MUFG Bank's Lee Hardman says in a note. Intervention bets are fuelled further by Reuters reporting that Japan could shift to surprise yen intervention tactics. The dollar falls to a two-week low of 160.96 yen, having risen to a 40-year high of 162.83 Wednesday, according to LSEG. (renae.dyer@wsj.com)
0943 GMT - The recent fall in eurozone government bond yields and softer eurozone growth are contributing to a weaker euro in the near-term, MUFG Bank's Lee Hardman says. The eurozone's two-year yield has fallen 30 basis points after hitting a peak of 2.83% on June 18, he says. That is "a much bigger drop in yields than in the U.K. and U.S. rate markets over the same period." It comes as the rates market has become less confident that the European Central Bank will raise interest rates further this year, he says. The euro falls to a one-year low of 0.8548 pounds, according to LSEG. Against the dollar, the euro rises 0.3% to $1.1414 after hitting one-year low of $1.1324 last week. (renae.dyer@wsj.com)
0927 GMT - A joint U.S.-Japan foreign-exchange intervention to buoy the yen doesn't seem likely at this juncture, says RBC BlueBay Asset Management's Russel Matthews in an interview. The relative stability of core government bond yields likely leaves the U.S. reluctant to get involved, the senior portfolio manager for global macro strategy says. However, he flags that long-end Japan government bond yields could become more volatile amid continued yen weakness, such as the 10-year yield approaching 3.0%. The volatility could seep into Treasurys and global government bonds and increase the need for collective intervention, he adds. RBC BlueBay has a neutral position on the yen. Matthews notes that Tokyo's potential intervention measures appear "increasingly random [and] sporadic." (megan.cheah@wsj.com)
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)
(END) Dow Jones Newswires
July 02, 2026 07:01 ET (11:01 GMT)
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