Global Forex and Fixed Income Roundup: Market Talk

The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.

0937 ET - Wage growth has slowed noticeably in Canada's labor market, or below 3% on a 12-month basis, which likely portends a subsequent cooling in household consumption as inflation stays near or above 3%, says economist Brendon Bernard at job-posting site Indeed.com. Overall, Canada's labor market has stabilized with a decent 2Q showing, although Bernard says a further pickup in hiring is not in the cards due to stagnant population growth. "Slow job growth is likely to continue through 2026," Bernard says, adding the deceleration in wages "presents a real risk" to the broader economy, given elevated energy prices. The drop in wage growth threatens "to erode purchasing power gains built up over the past few years." (Paul.Vieira@wsj.com; @paulvieira)

0913 ET - Sterling could fall in coming months if the Bank of England avoids raising interest rates and political friction over budget cuts emerges under new Prime Minister Andy Burnham, Rabobank's Jane Foley says. The BOE is expected to keep rates unchanged Thursday but some policymakers could favor raising rates, fueling the debate about the risk of future tightening, she says in a note. Against a background of soft economic activity indicators and uncertainty over the government's autumn budget, Rabobank expects steady rates through to year-end. Meanwhile, Burnham's plans to tackle welfare reform could spark tensions within the ruling Labour Party, Foley says. The euro falls 0.1% to 0.8547 pounds and Rabobank expects it to reach 0.8700 in three months. (renae.dyer@wsj.com)

0856 ET - Gulf economies are receiving near-term support from elevated oil prices, but prolonged regional uncertainty threatens longer-term private-sector growth. Higher oil prices are supporting fiscal and external revenues in Saudi Arabia, the United Arab Emirates and Oman despite risks that prolonged uncertainty could weaken business confidence, private-sector activity and foreign direct investment, S&P Global Ratings says in a report. The ratings agency says easing export obstructions could also benefit Kuwait, Bahrain and Qatar, while Oman is well-positioned to capture trade through more secure maritime routes and Dubai's Jebel Ali port could face higher operating costs. (farhan.rafid@wsj.com)

0843 ET - Treasury yields take another step lower as hostilities remain suppressed in the Strait of Hormuz. Oil prices keep falling, with Brent down 2%. The WSJ Dollar Index is flat. The Conference Board Consumer Confidence Index for July is expected to tick higher to 92 from 91.2, according to a WSJ consensus. Markets are mostly pricing in a Fed hold tomorrow, but odds of a hike are still relatively high, at 36% on the CME's FedWatch tool. Inflation-linked swap rates indicate investors expect inflation to be below the Fed's 2% target a year from now. The 10-year yield slips to 4.631% from yesterday's 4.640% settle. The two-year declines to 4.302% from 4.318%. (paulo.trevisani@wsj.com; @ptrevisani)

0833 ET - Supply disruptions from the Iran war are accelerating competition among Gulf states as they pursue national energy strategies. The United Arab Emirates is seeking to raise oil production toward capacity following its exit from OPEC, while Qatar is moving ahead with expansion of liquefied-natural-gas production from its North Field, S&P Global Ratings says in a report. The moves signal a more aggressive effort by Gulf governments to generate returns from their natural-resource endowments, the ratings agency says. (farhan.rafid@wsj.com)

0832 ET - French consumer confidence firmed in July, completing a strong start to third-quarter survey data after pickups in the PMIs and Insee business confidence, Pantheon Macroeconomics' Claus Vistesen says in a note. The headline index rose to 86 from 84 in June, lifted by improvement in households' outlook for their own financial situation and the economy. Major purchasing intentions also climbed, though the survey's savings index rose as well, Vistesen notes. Since the survey period, however, airstrikes have resumed in Iran and energy prices have rebounded. Moreover, France is now also grappling with major forest fires, which are likely to weigh on household confidence in affected regions, and on sentiment in tourism and hospitality, he says. (edward.frankl@wsj.com)

0809 ET - French corporate credit spreads remain tight compared to their sovereign peers, leaving them vulnerable to widening, Morgan Stanley credit strategists say in a note. France faces a weak fiscal outlook, political uncertainty, and a deteriorating credit rating outlook, which could cause sovereign spreads and credit spreads to widen in the coming months, the strategists say. "We expect historical correlations to reassert themselves, with banks particularly exposed given their higher [sensitivity] to sovereign spreads." (miriam.mukuru@wsj.com)

0741 ET - Bitcoin stays under pressure as the selloff in chip stocks deepens, weighing on risk appetite. Nasdaq futures point to a 0.8% fall in the tech-heavy U.S. stock index. Investors are cautious with positioning ahead of the Federal Reserve's policy decision on Wednesday and earnings from major U.S. tech companies amid renewed concerns over the scale of AI-related spending, Capital.com's Daniela Hathorn says in a note. "Investors are becoming increasingly selective this earnings season, with strong revenue growth no longer enough to satisfy markets unless accompanied by evidence that elevated spending is translating into sustainable profitability." Bitcoin falls 2.2% to $63,462 after reaching an 11-day low of $63,038 overnight, LSEG data show. (renae.dyer@wsj.com)

0724 ET - Market pricing of around 1.5 interest-rate hikes by the European Central Bank this year might be excessive, providing some cushion to German government bonds in case of renewed oil price rises, Metzler analysts say in a note. One-and-a-half rate raises would mean interest rates would rise by 37 basis points, according to LSEG. Metzler expects fewer interest-rate hikes than that. "We see support for the entire curve stemming from monetary policy with the greatest impact, naturally, at the short end," analysts Leon Ferdinand Bost and Yannik Mosbach say. Short-term yields have somewhat decoupled from the oil price and consequently Metzler sees a certain "margin of safety" against rising Brent prices, they say. The ECB raised interest rates in June and left them on hold in July. (emese.bartha@wsj.com)

0640 ET - A further selloff in gold prices would be needed for the Swiss franc to remain weak, TD Securities strategists say in a note. Market participants have attributed the franc's weakness to the prospect of the Swiss National Bank keeping rates at 0% while other central banks raise rates. However, the currency also shows a strong correlation to falling gold prices, they say. "As we see limited scope for a prolonged global rate hiking cycle and only modest gold price downside, our foreign exchange forecast has euro-franc staying around 0.93 into year-end." The euro trades flat at 0.9315 francs after reaching a six-month high of 0.9321 earlier, LSEG data show. (renae.dyer@wsj.com)

0639 ET - German economic output rose somewhat in the second quarter despite headwinds from the war in Iran, the Bundesbank says in its July monthly report. "The current picture painted by the indicators suggests a somewhat higher underlying pace of economic growth than was expected in the Bundesbank's June forecast," it says. Continued resilience in the industrial sector, helped by robust foreign demand and growing exports helped GDP to increase slightly in the quarter, the bank says. German exporters also benefited as international competitors were more severely affected by supply bottlenecks. Consumers were relatively unaffected by the high energy prices, and have kept their consumer spending at least stable, it notes. German 2Q GDP data are due Thursday. (edward.frankl@wsj.com)

0635 ET - U.S. Treasury yields fall as oil prices drop and investors hope for a diplomatic solution in the Middle East. The dollar rises to a one-month high against a basket of currencies before Wednesday's Federal Reserve's rate decision and on safe-haven demand as a tech-stock selloff deepens. The Fed is expected to hold interest rates but could stress inflationary risks from high energy prices, while a hike isn't out of the question. "The Fed will have no choice but to strike a hawkish note on Wednesday," Ebury's Matthew Ryan says in a note. Money markets price a 34% probability of a Fed rate hike, according to LSEG. The 10-year Treasury yield falls 1.9 basis points to 4.622%, according to Tradeweb. The DXY dollar index hits a high of 101.640. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

July 28, 2026 09:37 ET (13:37 GMT)