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

0410 GMT - Australia's economy likely grew around 0.3% in the September quarter, bettering the June quarter's 0.2% expansion, Moody's Analytics says in a note. The country's households and businesses remain weighed by high interest rates, it notes. While tax cuts and cost-of-living relief measures have supported households, that has shown up as savings in bank accounts rather than extra spending, Moody's says. Pressures on businesses are also mounting, particularly in interest rate-sensitive industries such as retail, hospitality and construction, it adds. The GDP data are due Wednesday. (monica.gupta@wsj.com)

0358 GMT - China's November PMI surveys point to slower growth in construction but stronger manufacturing seems to have more than made up for that, Capital Economics' Gabriel Ng says. The economist expects increased fiscal support and the frontloading of shipments to the U.S. to support growth near term. CE's compiled average of the official and Caixin manufacturing PMIs puts the headline reading at a seven-month high in November. The data suggest improvement was broad-based, though an uptick in home sales seems to have done little for construction activity, Ng notes. CE expects an acceleration in on-quarter GDP growth this quarter but thinks foreign protectionism and domestic structural issues will weigh over the coming years. (fabiana.negrinochoa@wsj.com)

0335 GMT - The Singapore dollar weakens against its U.S. counterpart in the Asian trading session. Political risks in France have increased, says RBC Capital Markets' Alvin T. Tan in an email. Far-right party leader Le Pen has threatened to topple France's minority government if it fails to meet her budget demands, notes the head of Asia FX strategy. Separately, U.S. President-elect Trump has demanded that BRICS countries commit to not create a "new BRICS currency, nor back any other currency to replace the mighty U.S. dollar," threatening to impose 100% tariffs otherwise, Tan adds. USD/SGD is 0.5% higher at 1.3454.(ronnie.harui@wsj.com)

0329 GMT - Trump's warning shot to the BRICs alliance on the dollar underscores the threat India's economy faces from U.S. tariffs, OCBC's Lavanya Venkateswaran says. Trump said in a post on X that BRICS countries shouldn't try to move away from USD, adding: "we require a commitment from these countries that they will neither create a new BRICS currency, nor back any other currency to replace the mighty U.S. dollar or, they will face 100% tariffs, and should expect to say goodbye to selling into the wonderful U.S. economy." Venkateswaran says discerning threats from reality remains a challenge but the bottom line is Indian assets, including INR, are subject to pressure from U.S. protectionist threats. The economist sees room for the RBI, and some other peers, to cut rates before tariffs and inflationary consequences become a reality. (fabiana.negrinochoa@wsj.com)

0324 GMT - India's much slower-than-expected GDP growth in the latest quarter could prompt the RBI to cut rates sooner rather than later, OCBC economists say. The data indicate weakening growth momentum in key areas like private consumption and investment spending, says senior economist Lavanya Venkateswaran. OCBC forecasts a 25bp cut at the RBI's meeting on Friday, followed by another in February. Supporting the case for cuts is core inflation, which has largely conformed to a stabilizing trend, she adds. OCBC also expects disinflationary momentum to persist in the coming months. On the external front, India's economy faces the risk of additional U.S. tariffs. Despite the quarterly slowdown, OCBC maintains its full-year growth forecast at 6.2%. (fabiana.negrinochoa@wsj.com)

0250 GMT - Forecasts for a rebound in Australian household consumption growth in 2H24 remain intact, says Faraz Syed, economist at Citibank. A tight labor market and fiscal stimulus suggest that headwinds for households have dissipated, he adds. As a result, the RBA is unlikely to rush into cutting interest rates. Citi expects the first rate cut to occur in May 2025, with a total of 75 basis points of cuts, leading to a year-end terminal official cash rate of 3.6%. (james.glynn@wsj.com; @JamesGlynnWSJ)

0239 GMT - The dollar strengthens against most G-10 and Asian currencies in the morning session, driven by U.S. President-elect Donald Trump's threat to impose 100% tariffs on BRICS countries. Over the weekend, Trump posted on social media that he will "require a commitment" from the nations that "they will neither create a new BRICS currency, nor back any other currency to replace the mighty U.S. Dollar..." or face 100% tariffs, MUFG Bank's Michael Wan says in a note. His remarks serve as potential preview of tariff diplomacy under Trump 2.0," the senior currency analyst adds. The ICE USD Index is 0.5% higher at 106.28; USD/JPY is up 0.6% at 150.65.(ronnie.harui@wsj.com)

0234 GMT - Australia's retail sales have lifted in recent months, easing concerns that consumers are being crushed by soaring home mortgage repayments. Income tax cuts, cost-of-living relief from governments, and moderating inflation appear to be supporting the upward trend in retail turnover, says Sophia Angala, an economist at ANZ. She continues to expect spending growth to recover from here, with price sensitive households participating in end-of-year sales events like Black Friday. (james.glynn@wsj.com; @JamesGlynnWSJ)

0223 GMT - JGBs fall in the morning Tokyo session, dragged by rising BOJ rate-hike expectations. In a local media interview published at the end of last week, BOJ Gov. Ueda acknowledged that the next rate increase is nearing as Japanese economic data trend is in line with expectations, SMBC Nikko Securities' Financial Market & Economic Research says in a note. "There were certainly comments that will heighten expectations for a rate hike soon," it adds. The 2-year JGB yield rises 3bps to 0.625%; the 10-year yield is 2.5bps higher at 1.075%.(ronnie.harui@wsj.com)

0032 GMT - U.S. president-elect Trump's threat to impose an additional 10% tariff on Chinese goods is likely a tactic to push Beijing to the negotiating table, Barclays economists say. Nevertheless, the comments are likely more than just rhetoric and could mark the start of a stream of new tariffs, Ying Zhang and others say. They expect Chinese authorities to respond with more fiscal support. "That said, we think the country has likely entered a policy gap period that will last until the March NPC [National People's Congress] meeting next year," they say. That will likely be the case unless there is a disorderly selloff in the stock market, a deeper-than-expected contraction in the property sector or notable tariff increases. (fabiana.negrinochoa@wsj.com)

0027 GMT - South Korea's benchmark Kospi rises 0.8% to 2476.22 in early trade as battery and internet-game stocks advance. Institutional investors are net buyers. Weaker-than-expected November trade data, released on Sunday, is limiting the upbeat mood, with foreign and retail investors being net sellers. Electric-vehicle battery maker LG Energy Solution is up 3.5%. Online video game developer Netmarble adds 3.4%. But the index heavyweight Samsung Electronics is 0.7% lower. USD/KRW is 0.3% higher at 1,399.00, compared with the prior session's Seoul onshore trading close. The South Korean 10-year government bond yield is down 3.7 bps at 2.751%. (kwanwoo.jun@wsj.com)

0014 GMT - China's November PMIs paint a mixed picture, with manufacturing improving but construction contracting, Barclays economists say. Property likely remains a key drag on construction, Ying Zhang and others say. Property sales have shown some recovery since September but the effects of recent housing policy easing will be limited with government strictly controlling increase in housing construction and optimizing existing commercial properties, they say. Manufacturing sustained October's recovery after stepped-up counter-cyclical policy support. Barclays sees a shallow GDP recovery in 4Q and 1Q 2025 on greater policy coordination and reactive, incremental responses. Fiscal, monetary, equity market and housing policies thus far may help at the margin by easing debt burdens, producing modestly positive wealth effects and possibly boosting housing sentiment. (fabiana.negrinochoa@wsj.com)

(END) Dow Jones Newswires

December 01, 2024 23:10 ET (04:10 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.