The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0723 GMT - The Bank of Thailand is expected to remain on hold through 2026, despite the surge in inflation, say Barclays economists in a note. Headline CPI rose to 2.89% on year in April, largely driven by higher energy prices. Barclays expects inflation to remain elevated for most of 2026, though BOT recently said it expects inflation to remain above 3% temporarily. The central bank is likely much more concerned about the growth risks stemming from the Middle East conflict, compared with inflation, Barclays says.(amanda.lee@wsj.com)
0720 GMT - Eurozone government bond yields fall in early trading, tracking moves in U.S. Treasury yields which are driven by lower oil prices. While the continued closure of the Strait of Hormuz keeps inflation fears alive, U.S. President Trump's pause of 'Project Freedom'--an effort to re-open the key naval route--give hopes for a peaceful resolution rather than renewed military escalation. Supply is limited to Germany, which auctions 3.5 billion euros in the November 2032 Bund and aims to sell 3.5 billion euros in the syndicated tap of the August 2056 Bund. The 10-year German Bund yield falls 4.1 basis points to 3.035%, according to Tradeweb. (emese.bartha@wsj.com)
0705 GMT - Bitcoin edges lower as traders take profits after the cryptocurrency reached a three-month high overnight. However, bitcoin remains above the key $80,000 level, supported by improved risk sentiment on hopes for peace deal between the U.S. and Iran. President Trump said Tuesday that there had been "great progress" towards a complete and final agreement with Iran. He also said he has agreed to pause for a short period a U.S. operation to guide commercial ships through the Strait of Hormuz. Bitcoin falls 0.2% to $81,475 after reaching a high of $81,753 overnight, LSEG data show. (renae.dyer@wsj.com)Citigroup expects the BOK to raise rates in July and October while revising up growth and inflation forecasts. "Bank of Korea Could Signal Rate Hike Before Action in July," at 0646 GMT incorrectly said Nomura made the forecasts.
0653 GMT - U.K. government bonds, or gilts, are under pressure due to concerns about inflation given the prolonged Middle East conflict and political pressures at home, Ebury's Matthew Ryan says in a note. Investors fear that the closure of the Strait of Hormuz could keep energy prices high and drive up U.K. inflation, potentially pushing the Bank of England to raise rates rapidly, Ryan says. In addition, the local elections due on Thursday present political risk. "The biggest risk here is a lurch to the radical left under a new leader, which could raise the spectre of looser fiscal rules, additional tax hikes and unfunded spending commitments." U.K. 30-year gilt yields surged to their highest level in 28 years at 5.787% on Tuesday, LSEG data show. (miriam.mukuru@wsj.com)
0646 GMT - The Bank of Korea could signal a rate increase before acting in July, Citigroup's Jin-Wook Kim says. Consumer inflation in South Korea may accelerate further after the pickup in April on rising prices for oil, goods and services, the economist writes in a note. Citigroup expects the BOK to raise the policy rate by a quarter percentage point each in July and October to 3.00% this year. The BOK is also expected to raise its 2026 growth forecast to 2.4%-2.6% from its earlier estimate of 2.0% and revise its annual inflation forecast to 2.6%-2.8% from its previous estimate of 2.2%, Nomura says. (kwanwoo.jun@wsj.com) Corrections & Amplifications
This market talk item was corrected at 0717 GMT to reflect Citigroup expects the BOK to raise rates in July and October while revising up growth and inflation forecasts. The original version incorrectly said Nomura made the forecasts in the third sentence of the blurb.
0641 GMT - The dollar falls, reflecting hopes for a U.S.-Iran peace deal and a stronger Japanese yen amid intervention speculation. President Trump said Tuesday on his Truth Social that there had been "great progress" towards a complete and final agreement with Iran. The comments boost risk appetite and lower oil prices, denting the dollar as a safe haven and America's position as a net oil exporter. Meanwhile, there is market chatter that Japanese authorities used currency interventions to bolster the yen earlier Wednesday after taking possible action last week. The yen is the second largest component in the basket of currencies used to calculate the DXY dollar index after the euro. The DXY falls 0.4% to 98.076. (renae.dyer@wsj.com)
0619 GMT - U.S. Treasury yields decline in opening European trade as investors continue to bet on a resolution in the Middle East war and a reopening of the Strait of Hormuz. U.S. President Trump announced a temporary pause to 'Project Freedom,' an operation aimed at opening the naval route. "Oil prices declined following the announcement and continued to fall overnight, driven by expectations of progress toward a peace deal with Iran, as hinted by Trump," says Danske's Sofie Grundvad Pedersen in a note. The two-year Treasury yield falls 2.3 basis points to 3.913%, while the 10-year yield is down 3 basis points at 4.385%, according to Tradeweb. (emese.bartha@wsj.com)
0614 GMT - Malaysia's central bank is expected to leave its benchmark policy rate unchanged again at 2.75% on Thursday, according to all eight economists polled by The Wall Street Journal. Bank Negara Malaysia is likely to keep its policy rate unchanged, with the current stance still assessed as appropriate and supportive of the economy, Nomura analyst Si Ying Toh says in a note. The central bank is likely to maintain a constructive growth outlook, backed by diversified growth drivers despite rising uncertainty from the Middle East conflict. Inflation risks are expected to remain balanced, though vigilance over second-round effects from higher energy prices may be signaled, she adds. Nomura expects BNM to maintains a neutral policy tone, with a continued emphasis on a data-dependent approach.(yingxian.wong@wsj.com)
0606 GMT - Japan may have to conduct a sustained campaign of FX intervention if it wants to prop up the yen, which could lead to bigger two-way swings in the dollar against the currency, CBA's Global Economic & Markets Research team says in commentary. The Japanese authorities could have intervened in another yen-buying operation earlier Wednesday afternoon in Asia, after they are widely believed to have intervened last week, the team notes. However, higher-for-longer energy prices combined with U.S.-Japan interest-rate differentials will probably keep upward pressure on the dollar against the yen, the team says. The dollar is 1.0% lower at 156.34 yen after earlier touching 155.02 yen, its lowest intraday level since Feb. 24, LSEG data show.(ronnie.harui@wsj.com)
0602 GMT - Germany's government bond sales on Wednesday shouldn't derail an expected good performance in German bonds, says Commerzbank's Hauke Siemssen in a note. Germany will reopen the November 2032-dated Bund at an auction and tap the August 2056-dated Bund via a syndicated transaction. The offer volume for the auction is 3.5 billion euros, and the intended issuance volume at the syndicated tap is also 3.5 billion euros, likely including a tranche for retention. "Today's supply should not stand in the way of further Bund performance, while hopes about a deal for [the reopening of the Strait of] Hormuz prevail," the rates strategist says. (emese.bartha@wsj.com)
0554 GMT - While the Middle East war and the associated energy price shock put pressure on bond markets in the first quarter, the resulting increase in yields has made the starting position for bond investors more attractive than it has been in decades, Lazard Asset Management's Michael Weidner says in a note. "The markets have already largely absorbed the new inflationary dynamics, causing yields to rise to an attractive level that now offers a significant buffer," the co-head of global fixed income says. This has created an environment that is once again primarily driven by high current income and simultaneously opens up profound relative opportunities for the remainder of the year, says Weidner, who is also a portfolio manager and analyst. (emese.bartha@wsj.com)
(END) Dow Jones Newswires
May 06, 2026 03:23 ET (07:23 GMT)
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