The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
2141 ET - The Bank of Korea is expected to raise its 2026 gross domestic product growth forecast for South Korea to 2.5%-2.7% from its previous estimate of 2.0%, Citigroup's Jin-Wook Kim says. The country's strong 1Q GDP print and ongoing fiscal stimulus are likely to prompt an upgrade to the growth outlook at the May 28 BOK policy meeting, Kim notes. The BOK is also expected to revise up its 2026 consumer inflation forecast to 2.6%-2.8% from 2.2%, reflecting higher oil prices, he adds. Citi maintains its view that the BOK will deliver four rate hikes--one each in July and October 2026 and in January and April 2027. (kwanwoo.jun@wsj.com)
2114 ET - Asian currencies consolidate against the dollar in early trade, but may be aided by tentative signs of stabilizing risk sentiment, analysts say. "Risk sentiment found some relief, helped by oil easing from recent highs as U.S.-Iran strike risks were pushed back for now," OCBC Group Research's Christopher Wong says, noting President Trump saying a planned attack on Iran is on hold after a request by Gulf leaders. Asian currencies have stabilized, but "conviction remains tentative at this point," the FX strategist says in a research report. The dollar rises 0.7% to 1,499.90 Korean won, but is little changed at 61.594 Philippine peso, LSEG data show. (ronnie.harui@wsj.com)
2045 ET - Japan's economy built up solid momentum ahead of the Iran war but Capital Economics thinks GDP growth will slow to a standstill this quarter and the next. Data for 1Q showed on-quarter upticks in both household spending and business investment, plus a growth boost from a jump in exports that surpassed a much smaller gain in imports. However, despite all the talk of looser fiscal policy under PM Takaichi, government consumption slowed on-quarter, underlining that the supplementary budget announced last November didn't move the needle on government spending, says economist Marcel Thieliant. Meanwhile, consumer confidence has slumped and fuel-price caps will only keep inflation subdued for so long. Even with a new supplementary budget to finance gasoline subsidies, that will at best stabilize consumer spending, he adds. (fabiana.negrinochoa@wsj.com)
2015 ET - JGBs mostly rise in price terms in the early Tokyo session on a likely technical rebound following Monday's sell-off. Japan's government bond market may also be buoyed by hopes of a U.S.-Iran peace deal that could lead to lower oil prices, cooling inflationary pressures in Japan and easing fears of rapid pace of BOJ rate increases. President Trump said he would hold off on a planned U.S. attack on Iran at the request of Gulf leaders to make room for talks with Tehran over a prospective deal to end the war. The yield on 10-year JGBs declines 1.5 bps to 2.725%; the 20-year yield falls 1.5 bps to 3.700%; the 30-year yield drops 2.5 bps to 4.075%.(ronnie.harui@wsj.com)
2014 ET - Japanese stocks are higher in early trade, thanks to continued hopes for a possible U.S.-Iran deal to end the war. Financial and construction stocks are leading the gains. Mizuho Financial Group is up 4.1% and Kajima is 3.9% higher. The dollar is at 158.89 yen, compared with Y158.88 as of Monday's Tokyo stock market close. Investors are focusing on developments in the Middle East and any measures taken by the Japanese government and businesses to deal with a shortage of energy and other products. The Nikkei Stock Average is up 0.7% at 61235.36. (kosaku.narioka@wsj.com; @kosakunarioka)
1947 ET - Japanese stocks may rise amid hopes for a possible U.S.-Iran deal to end the war. Nikkei futures are up 1.2% at 61595 on the SGX. President Trump has said he will hold off on a planned U.S. attack on Iran to make room for negotiations with Tehran. The dollar is at 158.81 yen, compared with Y158.88 as of Monday's Tokyo stock market close. Investors are focusing on developments in the Middle East and any measures by the Japanese government and businesses to deal with a shortage of energy and other products. The Nikkei Stock Average fell 1.0% to 60815.95 on Monday. (kosaku.narioka@wsj.com)
1550 ET - Treasury yields rise slightly as markets wait for the next shoe to drop in the Middle East. President Trump says on Truth Social that he cancelled an attack on Iran scheduled for tomorrow, while asking the military to be prepared to attack "on a moment's notice" if a deal can't be reached. Geopolitical headlines are likely to drive markets this week, in the absence of relevant data points. Oil prices rise and the WSJ Dollar Index is down 0.2%. The 10-year yield rises 0.027 percentage point to 4.622% and the two-year advances 0.007 p.p. to 4.090%. Both are at their highest level since February 2025. (paulo.trevisani@wsj.com; @ptrevisani)
1549 ET - The minutes from the Fed's April meeting arrive Wednesday afternoon. But perhaps just interesting to some Fed watchers will be two public appearances by Fed governor Christopher Waller. He is speaking on a panel Tuesday morning and delivering an economic-outlook speech on Friday morning, both while traveling in Germany. Up until the spring, Waller was one of the Fed officials who most favored further interest-rate cuts, although the Iran conflict has tempered his stance amid new inflation concerns. If Waller further distances himself from 2026 rate cuts, or even suggests he thinks the Fed may need to raise rates this year, it would be a stark sign of how much the Middle East energy-market shock has altered the Fed's balance of risks, Brent Donnelly of Spectra Markets writes. (matt.grossman@wsj.com; @mattgrossman)
1445 ET - U.S. consumers continue to spend, JPMorgan analysts say, countering investors' fears of a slowdown given higher gas and energy prices due to the conflict in the Middle East. The analysts say Chase credit card data point to total U.S. consumer spending growth of 6.4% month to date through May 8, just above an increase of 6.1% in the first quarter and accelerating from 4.6% growth in the fourth quarter. Some public and private companies alike also say they've seen no slowdown with U.S. consumers to date, the analysts say. U.S. consumers are willing to pay full price for fashion and newness, and have been resilient when it comes to spending on leisure including on cruise lines and theme parks, they say. (kelly.cloonan@wsj.com)
1322 ET - Tokenization, the process of putting real-world assets onto the blockchain, is growing exponentially in 2026 but may expand into a market worth over $1 trillion by 2030, according to Moulik Nagesh of Binance Research in a note. Nagesh says that currently, these tokenized assets account for $31.4 billion of value. That's already up 46% from the start of the year, and more than five times what they were worth in 2025, he says. But there is much more growth potential for tokens representing commodities like gold and oil ahead. "The long-term opportunity is large because current penetration remains extremely low," says Nagesh, assessing that penetration at 0.01%. Tokenization of 1% of the markets they represent would result in values over $1 trillion, Nagesh says. (kirk.maltais@wsj.com)
1315 ET - U.S. homebuilders will need to work off more of their unsold inventory before there is a notable pick up in single-family housing starts, a note from Oxford Economics says. Homebuilder sentiment improved in May but remained in negative territory because demand was affected by higher mortgage rates and uncertainty tied to the war in Iran, according to the NAHB homebuilder sentiment index. "Housing starts will mostly move sideways for the next couple of quarters before starting to edge up slightly around year-end, when we expect mortgage rates to be lower as the Fed implements the first of two rate cuts we expect," they predict. (jessica.coacci@wsj.com)
1206 ET - Analysts at Monetary Policy Analytics, a firm of Fed watchers, don't yet think a rate hike is likely this year. But it's a scenario that has become a lot more plausible given recent data, the firm's Kevin Burgett writes in a note. He points out that after a strong retail-sales release for April, the Atlanta Fed's 2Q GDP tracker is tracking 4% real GDP growth, while inflation numbers are picking up as well. "We're not on the cusp of calling for rate hikes, but various recent data...are of the sort that, if repeated, would help build a case that policy isn't sufficiently restrictive," he writes. (matt.grossman@wsj.com; @mattgrossman)
(END) Dow Jones Newswires
May 18, 2026 21:41 ET (01:41 GMT)
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