0853 ET - Treasury yields rise, on path for a quarterly increase. An agreement to fully restore shipping through the Strait of Hormuz remains elusive and oil prices edge higher. Fed funds futures price at least one Fed hike this year, according to CME. U.S. labor data starts to trickle in, with the JOLTS report due at 10 a.m. ADP's private-sector jobs report comes tomorrow, followed by June's nonfarm payrolls Thursday. Both are expected to show slowing job creation, in WSJ surveys. President Trump signals legal pressure on Fed Governor Cook will continue. The WSJ Dollar Index rises 0.2%. The 10-year is at 4.390%, up from 4.375% yesterday. The two-year rises to 4.121% from 4.108%. (paulo.trevisani@wsj.com; @ptrevisani)
0847 ET - Canada's economy rebounded as expected early in 2Q, notching the largest expansion in April in nine months. GDP rose 0.5% on-month, slightly stronger than the 0.4% growth economists anticipated. Statistics Canada's advance data indicates GDP grew a more modest but still positive 0.1% in May. April's driver was a recovery in goods-producing activity, buoyed by the strongest growth in oil and gas extraction since February 2025 and a pickup in manufacturing. Construction also was up, for the first time in five months, while the public sector grew in April for a fifth month in six. (robb.stewart@wsj.com; @RobbMStewart)
0818 ET - Bitcoin stays under pressure as U.S. interest-rate rise expectations reduce appetite for risky assets and lift the dollar. Investors are also weighing Strategy's announcement Monday that it could sell bitcoin to raise up to $1.25 billion in cash as the crypto-hoarding company attempts to strengthen its balance sheet. Meanwhile, the deadline for the transition to the EU's MiCA regulation for crypto firms is on Wednesday. Companies will need to have obtained a MiCA license to continue offering services across the bloc. Bitcoin falls 2.1% to $58,949, having reached a 21-month low of $58,075 last Thursday, LSEG data show. (renae.dyer@wsj.com)The dollar was near a 40-year high against the yen. "Japan Might Struggle to Curb Yen's Slide Against Dollar — Market Talk," at 0827 GMT, incorrectly said the dollar hit a 40-year low.
0708 ET - Credit spreads on euro-denominated covered bonds could tighten in the second half of 2026 as the bonds' net supply slows down, UBS global research's Annalaura Capuano says in a note. Covered bonds are debt securities issued by financial institutions and are backed by collateral pool of assets such as mortgages or public-sector loans. Euro covered bonds supply is projected to slow in the second half, after strong issuance in the first six months of 2026, Capuano says. (miriam.mukuru@wsj.com)
0648 ET - The Bank of England could keep interest rates unchanged at 3.75% for the remainder of 2026, UBS global research strategists say in a note. The BOE can tackle any second-order effects of inflation by keeping rates on hold at the current restrictive level, they say. In addition, the weak starting point for the economy, including the labor market, lower the possibility of the BOE increasing interest rates, the strategists say. "We continue to expect the next [BOE] policy move to be a cut (in February and April 2027)," they say. (miriam.mukuru@wsj.com)
0646 ET - Central banks are diversifying reserves gradually away from the dollar, according to the Official Monetary and Financial Institutions Forum's Global Public Investor survey. The dollar continues to dominate portfolios and is still considered unmatched for safety and liquidity but central banks increasingly expect to reduce their exposure to the currency over the short and long term, especially in emerging markets. For the first time since the survey began recording reserve managers' long-term intentions in 2023, more central banks plan to decrease their dollar holdings than increase over the next 10 years. The euro and renminbi remain the main alternatives. However, the euro lacks a single, deep, safe asset market while the renminbi remains constrained by market structure and geopolitical concerns. (renae.dyer@wsj.com)
0643 ET - Sterling could fall moderately against the euro as the Bank of England is likely to avoid lifting interest rates this year while U.K. political uncertainty remains elevated, Rabobank's Jane Foley says in a note. The BOE would only vote to raise rates if there is clear evidence that another period of prolonged high energy prices is generating second round inflation effects, she says. Meanwhile, the U.K.'s potential next prime minister, Andy Burnham, said he would stick to the fiscal rules but his plans were vague regarding funding. Political uncertainty can hurt business confidence, investment and growth, she says. The euro trades flat at 0.8610 pounds and Rabobank expects it to reach 0.87 on a one- to three-month view. (renae.dyer@wsj.com)
0640 ET - The Polish zloty falls to a 16-week low against the euro after data showed Poland's inflation eased in June to its lowest level since the start of the Iran war. Inflation decelerated to 2.5% in June from 3.1% in May. The data support expectations that Poland's central bank could refrain from raising interest rates. Markets priced out rate rises after surprisingly lower inflation in May and relief from the fall in oil prices, ING's Frantisek Taborsky says in a note. The central bank has also been quick to dismiss any discussion of rate rises. This has negative implications for the zloty, he says. The euro rises to as high as 4.3004 zloty.(renae.dyer@wsj.com)
0639 ET - U.S. Treasury yields fall in European trade, reflecting lower oil prices, while the dollar rises on continued expectations of Federal Reserve rate hikes. "Strong U.S. economic data and persistent inflation concerns have reinforced expectations that the Federal Reserve could tighten monetary policy, supporting the dollar," FXEM's Abdelaziz Albogdady in a note. Markets continue to price in a 25 basis-point Fed rate increase by the end of the year, providing support despite occasional pullbacks in bond yields, the market research and fintech strategy manager says. The DXY dollar index is up 0.25% at 101.362. The 10-year U.S. Treasury yield falls 0.7 basis points to 4.365%, according to Tradeweb. (emese.bartha@wsj.com)
0634 ET - Japanese authorities could hold off on interventions to shore up the yen until Friday's U.S.-holiday thinned market conditions, ING's Chris Turner says in a note. Moreover, the market will have had the chance to react to comments from Federal Reserve Chair Kevin Warsh on Wednesday and the U.S. nonfarm payrolls report on Thursday. There's also a chance Japan holds out until shortly before the next Japanese public holiday on July 20, he says. Nonetheless, interventions can only slow rather than reverse the yen's fall, he says. A reversal would require some "dramatic" Bank of Japan rate hikes and a weaker dollar. The dollar rises 0.2% to 162.30 yen, having reached a 40-year high of 162.41 earlier, LSEG data show. (renae.dyer@wsj.com)
0629 ET - The cost of default protection for euro-denominated high-yield credit falls to its lowest since Feb. 18, due to optimism around a lasting resolution to the Middle East conflict. Markets are pricing in prospects of de-escalation in the U.S.-Iran war ahead of possible negotiations in Doha, IG analysts say in a note. The iTraxx Europe Crossover index of euro high-yield credit default swaps falls 2 basis points to 245bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)