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

0909 ET - The European Central Bank looks less likely to increase interest rates again in the coming months, following Thursday's quarter-point rate hike, Fitch Ratings' Charles Seville says in a note. The latest rate-rise decision is likely "one and done, barring a more lasting and severe energy shock that stokes further price pressure", Seville says. Investors fully price in another ECB interest rate rise in September, LSEG data show. (miriam.mukuru@wsj.com)

0911 ET - Further interest rate hikes by the European Central Bank would risk repeating past mistakes, Carsten Brzeski at ING says in a note. The decision to cut on Thursday appears largely shaped by its determination not to repeat its 2022 mistake of reacting too late to an inflation surge, he says. "However, continuing to hike rates after today's decision increases the risk of repeating another mistake from the past: the rate hikes in 2011," Brzeski says. Back then, the ECB hiked prematurely as inflation started to pick up, only to find out soon after that the eurozone was on the brink of deflation. The ECB's own projections don't obviously demand aggressive action, the analyst says. Headline inflation is forecast at 3.0% this year before easing. (don.forbes@wsj.com)

0905 ET - The European Central Bank's interest-rate increase makes the institution the first of the major central banks to hike, reflecting the euro area's acute exposure to energy-driven inflation, Principal Asset Management's Seema Shah says in a note. "While today's move was fully priced in, the future path is less clear and remains highly dependent on the duration of the conflict," the chief global strategist says. As it stands, the combination of higher inflation projections and only marginal growth downgrades indicates that the ECB must have a clear bias toward addressing inflation risks, she says. The projections point away from a one-and-done move, with further tightening likely as policymakers seek to contain the inflation shock, even if that requires sacrificing some growth in the near term, Shah says. (emese.bartha@wsj.com)

0902 ET - The European Central Bank's decision to hike rates is likely to prove ineffectual, State Street Investment Management's Simona Mocuta says in a note. Contrary to its goals, the monetary policy risks tightening into economic weakness--a course of action more likely to damage growth than to ease inflation, the chief economist says. "Indeed, a rate hike is likely to be ineffective in fending off inflationary pressures driven by a supply shock." With wage inflation well under control and consumer sentiment and spending depressed, there is limited scope for second round inflation effects in any case, she says. State Street Investment Management sees another hike in the autumn as most likely. (emese.bartha@wsj.com)

0859 ET - Treasury yields and the dollar rise amid hotter-than-expected U.S. wholesale inflation and as President Trump renews military threats against Iran. May PPI was 1.1%, matching April's advance and beating WSJ consensus of 0.7%. Weekly jobless claims accelerate to 229,000 from 225,000, consensus was 220,000. President Trump posts on Truth Social that the U.S. will be hitting Iran "VERY HARD TONIGHT." Oil prices rise less than 1%. The WSJ Dollar Index is up 0.1%. The 10-year yield rises to 4.544% from 4.523% before Trump's post and the data. The two-year rises to 4.148% from 4.125%. (paulo.trevisani@wsj.com; @ptrevisani)

0858 ET - Long-dated gilt yields are expected to show sensitivity to political risk in the lead-up to the special election in Makerfield constituency on June 18, Bank of America strategists say in a note. One of the candidates in the election, Andy Burnham, is also a potential contestant for the Labour Party leadership. U.K. political uncertainty is high in the lead-up to the election, causing investors to put a risk premium on U.K. government bonds. U.K. 30-year gilt yields last trade at 5.606%, the highest among developed market sovereign bonds, Tradeweb data show. (miriam.mukuru@wsj.com)

0852 ET - The European Central Bank's 25-basis-point rate increase doesn't mark the beginning of a new interest-rate hike cycle, Union Investment's Michael Herzum says in a note. Rather, the rate increase serves as a safeguard against any potential second-round effects, the head of economics and macro strategy says. "Little will be needed for this, as the recent weakening of the labor market in the currency union makes significant wage increases unlikely," he says. At the same time, the ECB does not want to jeopardize the fragile growth in the eurozone with a restrictive monetary policy, he says. (emese.bartha@wsj.com)

0852 ET - The European Central Bank's decision to raise interest rates Thursday can be seen as a tactical move to avoid the risk of falling behind the curve, Vontobel Asset Management's Christian Hantel says in a note. "If the Strait of Hormuz remains closed, the current energy shock and any supply chain disruption will further impact Europe." Another rate rise in September cannot be ruled out but growth in Europe remains subdued so a prolonged rate-increase cycle looks unlikely, he says. (renae.dyer@wsj.com)

0850 ET - The European Central Bank delivered a widely-expected 25 basis points interest rate rise but the policy statement highlights the dilemma of higher inflation combined with weaker growth, Capital.com's Daniela Hathorn says in note. The ECB raised its inflation forecasts but downgraded growth projections for this year and next year. "Inflation remains too high to ignore, but growth remains too weak to dismiss," Hathorn says. The ECB is trying to navigate between being too late to raise rates and too aggressive, she says. (renae.dyer@wsj.com)

0846 ET - The European Central Bank lowered its growth forecasts for 2026 and 2027, while inching up its outlook for 2028. The ECB's updated economic expectations came as the central bank raised interest rates for the first time in nearly three years, with higher energy prices due to the war in Iran driving up inflation across European economies. The bank lowered its forecast for 2026 to 0.8%, from 0.9%, and for 2027 to 1.2% from 1.3%. For 2028, the ECB now expects growth of 1.5%, from 1.4% previously. "This is a downward revision for 2026 and 2027, reflecting a more pronounced impact of the war on commodity markets, real incomes and confidence," the ECB says. (don.forbes@wsj.com)

0844 ET - Money markets are pricing in slightly more interest-rate hikes by the European Central Bank for 2026 after the ECB's 25-basis-point hike than before the rate decision, LSEG data show. Markets currently price in 45 basis points of rate hikes for the remainder of the year, implying almost two rate hikes of 25 basis points. Prior to the ECB's rate decision, markets priced in 42 basis points of hikes through year's end, according to LSEG. (emese.bartha@wsj.com)

0844 ET - In raising interest rates, the European Central Bank is saying a "look through" strategy is not a robust response to the jump in energy prices, Deutsche Bank's chief European economist says. "This is a significant moment. Not only is this the first ECB hike since 2023, it is also the first hike by one of the major global central banks in response to the energy shock," he says. The bank raised its key rate by a quarter-point to 2.25%. However, the tightening cycle likely won't go far, he says, given there is both upside risk to inflation and downside risk to growth. "One more hike in September and that's it," he says. (edward.frankl@wsj.com)

(END) Dow Jones Newswires

June 11, 2026 09:13 ET (13:13 GMT)

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