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

1257 GMT - The cost of insuring euro credit against default using credit default swaps declines in low trading as U.S. markets are closed for the Thanksgiving holiday. "Thanksgiving is likely to mean limited liquidity and thin trading," Monex Europe analysts say in a note. The iTraxx Europe Crossover index which tracks euro junk bond credit default swaps falls 3 basis points to 305bps, S&P Global Market Intelligence data show. The iTraxx Europe Main index which tracks euro investment-grade CDS declines 1 basis point to 57bps. (miriam.mukuru@wsj.com)

1236 GMT - Natural disasters are becoming more frequent and severe in Canada, raising the costs of clean-up and questions about whether Canadian communities can keep rebuilding. Total money dedicated to rebuilding after disasters has grown more than 400% between the 2000s and 2010s, and the cost extends beyond rising premiums to wages, hours worked and home prices that can all be depressed for years after a disaster, a report by Scotiabank notes. Data indicates only a handful of disasters in 2024 alone cost over 10 times more than the annual average payout size from 2001-2010. It says that if the trend continues, capital flows could slow and high-risk communities may be unable to fully rebuild. Scotiabank estimates show governments are spending billions more than initially budgeted on disaster management and relief. (robb.stewart@wsj.com; @RobbMStewart)

1219 GMT - Gold futures rise, finding some support after a volatile month. Futures are up 0.3% at $2,646.60 a troy ounce. The precious metal has gained as the U.S. Federal Reserve appears likely to continue interest-rate cuts at its December meeting, ING analysts write. The CME's Fed watch tool shows the market is currently pricing in a 68% chance of a 25-basis-point cut, up from around 56% a week ago. Lower interest rates typically boost the appeal of non-interest bearing bullion. On the other hand, Wednesday's inflation numbers were on the higher side, which could weaken the case for further rate cuts, ING says. Medium-term, some uncertainty still persists in the Middle East and Europe even after the Israel-Lebanon cease-fire deal, which could keep safe-haven demand for gold consistent, ING adds. (joseph.hoppe@wsj.com)

1220 GMT - The Canadian dollar rises slightly but is struggling to recover materially from recent losses sustained after U.S. President-elect Donald Trump threatened to impose tariffs on Canada, Monex Europe analysts say in a note. It's notable that USD/CAD remains above 1.40, they say. USD/CAD has been slow to rise since the U.S. presidential election but has also largely failed to participant in any retracements. "This dynamic gives us confidence that a slow grind higher for [USD/CAD] is most likely as markets continue to price in Trump-related risks." For now, the U.S. Thanksgiving holiday and absence of data could see the exchange rate "tread water." USD/CAD falls 0.2% to 1.4005 after hitting a four-and-a-half-month high of 1.4181 on Tuesday, according to FactSet.(renae.dyer@wsj.com)

1200 GMT - The cost of insuring French bank bonds against default trades close to the highest level in over a month as a potential French budget crisis dampens investor sentiment. "Investors [are] preoccupied with concerns regarding the economic and political stability of key European nations, including Germany's inflation figures and France's budget woes," Tickmill Group's Patrick Munnelly says in a note. Credit Agricole's credit default swaps rose to 48 basis points on Wednesday, the highest level over 3 months, and remain at that level Thursday, S&P Global Market Intelligence data show. Societe Generale's CDS trade at 56bps, close to 57bps, the highest level in over a month. (miriam.mukuru@wsj.com)

1123 GMT - The Bank of Korea's back-to-back rate cut didn't surprise Barclays economists, who had anticipated a move to mitigate risks to the economy. But the BOK's message on the next 6-12 months was more dovish than anticipated. Policy normalization could now move more quickly, Barclays says. "We now expect one more cut as early as February 2025," economist Bum Ki Son says, while noting risks of a delay from Trump's tariff announcements. BOK Gov. Rhee downplayed the meaning of the back-to-back cut, which typically only happens during crises, saying the situation isn't the same now. Rhee said factors behind the cut were the "red sweep" in the U.S. and structural weakness in Korea's exports. Barclays moves its call for cuts in August 2025 and February 2026 to May and October 2025. (fabiana.negrinochoa@wsj.com)

1101 GMT - The Mexican peso recovers after U.S. President-elect Donald Trump said he had a "wonderful" conversation with Mexico's President Claudia Sheinbaum in the wake of his threat to hit Mexico with tariffs. Trump posted online that Sheinbaum would stop migration through Mexico, although she said her position was not to close borders. "Rather than signalling the all-clear for Mexican asset risk, probably the strongest takeaway is that volatility is here to stay," ING analyst Chris Turner says in a note. Heightened volatility means the peso might struggle to benefit from its higher yield, he says. USD/MXN falls 1.8% to 20.2641 after hitting a 28-month high of 20.8325 on Tuesday, according to FactSet. (renae.dyer@wsj.com)

1007 GMT - Regional inflation data for Germany suggests the national CPI figure will increase slightly, albeit by less than the consensus expects, Pantheon Macroeconomics economist Claus Vistesen says in a note. Annual inflation in October was 2.0%, meeting the European Central Bank's target, with market consensus compiled by The Wall Street Journal expecting 2.3% for November. Meanwhile, the regional data suggests the core rate will drop 0.1 percentage points to 2.7%, Vistesen says. Indications point to a goods-inflation increase, but services inflation likely softened due to lower inflation in package holidays and hospitality, he says. The figures, alongside Spanish inflation also published Thursday, doesn't influence expectations for the eurozone rate due on Friday, at 2.3% for headline inflation and 2.8% for the core rate, he adds. (edward.frankl@wsj.com)

0958 GMT - Sterling is likely to rise against the euro as European political and budget worries outpace concerns about the implications of the U.K.'s October budget, Rabobank's Jane Foley says in a note. The U.K. labor market is loosening as a result of employer tax rises. Consumer confidence could weaken on higher mortgage rates as the Bank of England is expected to cut interest rates more cautiously given increased fiscal spending, she says. However, these issues are "not as great as the budgetary and political issues facing France." Germany also has budget and political issues, while Italy faces strike action Friday in response to budget disappointments. Rabobank expects EUR/GBP to fall to 0.8150 within 12 months from 0.8326 currently. (renae.dyer@wsj.com)

0947 GMT - Chart analysis suggests the euro needs to rise firmly above $1.06 before investors can be sure that its recovery is convincing, analysts at UniCredit Research say in a note. "Charts still require a rebound above $1.06 and even more $1.0660 at least to provide the euro with more convincing and lasting relief," they say. The euro is last 0.3% lower at $1.0540. It hit a one-week high of $1.0589 on Wednesday. (jessica.fleetham@wsj.com)

0938 GMT - Bitcoin continues to trade at slightly weaker levels after its recent pullback from record highs just shy of $100,000. The cryptocurrency last trades down 1.0% at $95,452, according to LSEG. It reached an all-time high of $99,830 on Friday on expectations for more favorable cryptocurrency regulation under U.S. President-elect Donald Trump. While it has suffered a correction this week, many analysts expect this to be short-lived with the cryptocurrency seen hitting the $100,000 mark soon. Standard Chartered expects bitcoin to reach $125,000 by the end of 2024 and $200,000 by the end of 2025. (renae.dyer@wsj.com)

0929 GMT - The euro might rise if data later show German inflation accelerated in November, UniCredit Research analysts say in a note.Any gains are likely to be modest, however, as the currency struggles to recover. The euro's inability to break above $1.06 suggests that investors "do not really want to ride a more sustained recovery of the single currency for now." The German data are due at 1300 GMT and come ahead of the wider eurozone inflation figures on Friday. The euro falls 0.2% to $1.0547. (renae.dyer@wsj.com)

(END) Dow Jones Newswires

November 28, 2024 07:57 ET (12:57 GMT)

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