The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1055 ET - Canada is sourcing fewer vehicles from the U.S. since the Trump administration launched its trade war. DesRosiers Automotive Consultants calculates that on a dollar basis the share of Canadian light vehicle imports coming from the U.S. dropped to 43.7% in 2025 from 49.1% the year before as auto companies have sought to avoid the counter-tariffs on U.S.-built products. Proportionally, the share of light vehicles coming in from Mexico rose to roughly 21% from 17% in 2024 and from other countries the share was up 1 percentage point at about 35%. When it comes to auto trade, Canada remains a net importer with most key trading partners, while close to 95% of Canada's automotive exports were still destined for the U.S., DesRosiers says. (robb.stewart@wsj.com; @RobbMStewart)
1005 ET - After receiving both CPI and PPI estimates this week, economists are beginning to publish forecasts for PCE--the Fed's preferred inflation measure. Oxford Economics predicts a 0.4% monthly increase in headline PCE prices and a 0.3% rise in core prices in April. Although weaker than the monthly rise seen in CPI and PPI, the increase would push headline PCE inflation up to 3.8% year-over-year, its highest reading since May 2023.(jessica.coacci@wsj.com)
0913 ET - The index for final demand services rises 1.2% in April, according to the latest PPI report. That marks the largest increase since the 1.3% rise in March 2022, during the post-pandemic inflation surge. Some Fed officials have recently warned about sticky inflation pressures. On Tuesday, Chicago Fed President Austan Goolsbee said the inflation side of the Fed's dual mandate is going wrong---even as the labor market remains stable but not particularly good. (jessica.coacci@wsj.com)
0909 ET - Markets are pricing in over a 30% probability of a rate hike by December, according to CME FedWatch. After hotter-than-expected producer price data, it is becoming more difficult for the Fed to justify any rate cuts this year. April producer prices rose 1.4%, above economists' expectations for a 0.5% increase. (jessica.coacci@wsj.com)
0907 ET - The dollar extends its gains to reach a near two-week high against a basket of currencies after data on U.S. wholesale inflation came in much higher than expected. The producer price index rose 1.4% in April compared to a month ago, exceeding the 0.5% increase forecast by economists in a WSJ survey. Core PPI rose 1.0% versus the 0.4% rise expected. This crushes the odds of the Federal Reserve cutting interest rates, Zaye Capital Markets analyst Naeem Aslam says in a note. "Markets are aggressively repricing a "higher for longer" dollar regime right now." The DXY dollar index rises to a 13-day high of 98.598 after the data, up from 98.538 beforehand. (renae.dyer@wsj.com)
0902 ET - Treasury yields jump on new signs of accelerating inflation. April producer price index final demand prints 1.4%, the largest advance since March 2022. WSJ consensus was 0.5%. Final demand less food and energy advances 1% in April, versus consensus of 0.4%. The report comes as President Trump arrives in China, with the conflict in Iran on the agenda. Oil futures keep rising. The WSJ Dollar Index rises 0.2%. A 30-year Treasury auction is expected to have weak demand. The 10-year yield rises to 4.483% from yesterday's settle of 4.462%. The two-year rises to 4.002% from 3.995%. The 30-year is at 5.042%. (paulo.trevisani@wsj.com; @ptrevisani)
0856 ET - Suspected Japanese currency interventions have taken the yen from being slightly undervalued to slightly overvalued, Standard Chartered analysts say in a note. "We think the reported cumulative $65 billion of foreign exchange intervention has strengthened the yen 1-2%." The move is likely interpreted as preventing yen weakness rather than engineering strength, they say. Japanese authorities seem to have re-established a line in the sand for the dollar versus the yen somewhere between the high 150s and 160, they say. More interventions might be needed to curtail negative yen sentiment. However, markets have pared interest-rate rise expectations for the Bank of Japan. The dollar is last up 0.2% at 157.83 yen, having reached a 21-month high of 160.72 on April 30. (renae.dyer@wsj.com)
0854 ET - Lengthy political tensions in the U.K. are expected to hurt U.K. assets and the weigh on the economy, Evercore ISI's Krishna Guha and Marco Casiraghi say in a note. Senior cabinet members and parliamentarians have called for the U.K. Prime Minister Keir Starmer to step down following the ruling Labour Party's poor performance at recent local elections. Starmer has vowed to stay on as leader, creating uncertainty around the U.K. political landscape. (miriam.mukuru@wsj.com)
0851 ET - Bitcoin turns marginally lower, remaining in a relatively tight range, as investors await news from high-stakes talks between President Trump and Chinese leader Xi Jinping. Trump has landed in China for the meeting with the Iran war expected to feature high on the agenda. Ahead of the talks, Defense Secretary Pete Hegseth said China has "a lot of leverage" over Iran. Bitcoin falls 0.2% to $80,555 after earlier modest gains, LSEG data. It is "becoming increasingly apparent that $80,000 is developing into a key area, previously resistance but now support," Trade Nation's David Morrison says in a note. A significant break below $80,000 could trigger a bought of profit taking from recent buyers, he says. (renae.dyer@wsj.com)
0849 ET - Rising inflation due to the Iran war is being amplified by a highly-sensitive corporate and consumer landscape, Daniel Harenberg at Oxford Economics says in a note. Following years of economic shocks, business and households are reacting quicker to inflationary news, raising the risk of knock-on price effects. "When inflation attention is high, firms react more sharply to inflationary news and adjust prices faster. Households revise their inflation expectations more readily, fuelling stronger wage demands," he says. Oxford Economics estimates that the oil supply shock could push up inflation across major economies in 2026 by about 0.6 to 0.7 percentage points. This means central banks may need more of a pivot towards tighter monetary policies than markets currently anticipate, Harenberg says. (don.forbes@wsj.com)
0846 ET - The Bank of England could keep interest rates on hold at 3.75% in the coming months, enabling short-term gilt yields to fall, Aberdeen Investments' Matthew Amis says in a note. "If the Strait of Hormuz opens in the coming weeks, then the BOE will not hike rates and the short-maturity gilt yields will have to remove the hikes priced, therefore [meaning] lower yields," he says. Investors hope for a near-term resolution to the Middle East conflict. Markets fully price in two quarter-point BOE rate rises and a 64% chance of a third BOE rate hike by year-end, LSEG data show. Two-year gilt yields are last down 0.6 basis points at 4.516%, Tradeweb data show. (miriam.mukuru@wsj.com)
0805 ET - Sterling turns slightly weaker against the euro after media reports that U.K. Health Secretary Wes Streeting could challenge Prime Minister Keir Starmer's leadership as soon as Thursday. Streeting met with Starmer Wednesday after the ruling Labour Party's bruising defeat in last week's elections. Starmer on Tuesday reaffirmed he had no plans to resign and Labour would need to trigger a leadership challenge to remove him. Streeting would need the support of 81 Labour lawmakers in order to force a vote. The euro rises 0.1% to 0.8675 pounds after earlier falls. It reached a near three-week high of 0.8697 Tuesday, LSEG data show. Ten-year gilt yields are last steady at 5.091%, having fallen earlier. (renae.dyer@wsj.com)
(END) Dow Jones Newswires
May 13, 2026 10:56 ET (14:56 GMT)
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