The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1025 GMT - Singapore's 1Q GDP outturn beat expectations, but RHB economists stay cautious, even as they keep their annual growth projection at 3.0%. The city-state's economic outlook has become increasingly uncertain amid heightened geopolitical and tariff tensions, says group chief economist Barnabas Gan. Despite its constructive view on manufacturing and export growth, RHB is wary about external risks, particularly from Middle East tensions and the potential unwinding of the AI-driven investment cycle--both which could weigh on Singapore's manufacturing and trade activities in 2026. The fluidity of the situation in the Middle East is a wildcard for Singapore's economy. While global AI-driven demand underpins manufacturing, risks are emerging from potential disruptions to critical inputs, like helium, which could constrain semiconductor and other high-value manufacturing. (fabiana.negrinochoa@wsj.com)
1019 GMT - The Swiss franc rises to its highest against the euro in nine weeks and its highest in a week and a half against a weaker dollar. The safe-haven currency gains even as risk appetite picks up on optimism about a potential deal between the U.S. and Iran. The Swiss franc has recently been driven by relative interest-rate expectations, ING's Chris Turner says in a note. Weak eurozone purchasing managers' surveys raised questions over how much the European Central Bank will need to raise interest rates. Further doubts over ECB rate-hike prospects will likely pressure the euro further versus the franc, he says. The euro falls to a low of 0.9094 francs while the dollar falls to 0.7811 francs, LSEG data show. (jessica.fleetham@wsj.com)
0959 GMT - The downside surprise in Singapore's core inflation in April doesn't dissuade UOB's economics team from expecting more tightening by the central bank. Rather, they think the CPI print actually bolsters the case for MAS policy tightening. Core CPI sped up on a three-month seasonally adjusted basis, imported inflation accelerated and there are early signs of broadening price pressures, as evidenced by the increase in inflation pervasiveness. UOB maintains its 2026 core inflation forecast at 1.9% and headline inflation projection at 2.2%. Risks to both still tilt to the upside. "We still expect MAS to tighten monetary policy further at the Oct 2026 MPS," says Jester Koh. He sees scope for an earlier move, should second‐round effects intensify or inflation expectations accelerate. (fabiana.negrinochoa@wsj.com)
0948 GMT - The Reserve Bank of India could stand pat in June, Barclays economists write in a note. The RBI may raise its inflation forecast and trim its growth estimate, but it should look past the supply-driven uptick in inflation, they say. However, the persistent Middle East conflict has drive energy prices higher for longer, which could mean a more permanent increase in price pressures, threatening Barclays's base case for the RBI to stay on hold for the rest of 2026. The spillover effects on transportation and other raw material costs may necessitate a rate hike in time, the bank adds. "The dent on growth will surely weigh on any such decision, but at the moment, we are more convinced of an inflation shock than a growth shock." (kimberley.kao@wsj.com)
0842 GMT - A potential drop in WTI crude futures to $80 would push the 10-year JGB yield down to around 2.60%, says Daiwa Securities strategist Shun Otani. "A ceasefire agreement that includes the reopening of the Strait of Hormuz would ease inflation fears and be positive for the JGB market, with yields expected to drop by around 10 to 20 basis points from current levels," he says. "On the other hand, domestic anxieties about fiscal sustainability and monetary policy falling behind the curve remain significant in Japan, meaning that a transition into a full-fledged yield-declining phase depends heavily on the government's stance," he adds. The 10-year JGB yield was last down 7.0 bps at 2.69%. (megumi.fujikawa@wsj.com)
0826 GMT - Singapore's central bank is unlikely to tighten its monetary policy settings in the near term after its measure of core inflation unexpectedly eased in April, says Barclays' Brian Tan in a note. The April core consumer-price index rose 1.4% on year, below market expectations, he notes. While the drop was partly due to policy-related price adjustments in areas, such as health insurance, the April print will likely reassure the Monetary Authority of Singapore that inflation expectations are stable, he says. Barclays lowers its core inflation forecast to 1.7% from 1.9% for 2026--and to 1.8% from 2.0% for 2027. Barclays' base case is for no further adjustment to Singapore's monetary-policy parameters, although risks are still tilted towards tightening. (megan.cheah@wsj.com)
0802 GMT - Sun Pharmaceutical Industries' single-digit revenue growth guidance for FY 2027 appears too conservative, as the rupee's recent weakness should support its top line, according to Elara Securities' Bino Pathiparampil. The analyst thinks the Indian drugmaker could grow its FY 2027 revenue by 11.5%. The pharmaceutical company's recent acquisition of U.S.-based Organon is also likely to be earnings accretive, he says in a note, raising his FY 2028 core earnings-per-share forecast by 43%. However, he trims his FY 2027 core earnings projection by 8% on a weaker Ebitda assumption. The stock's recent performance suggests limited further gains, he adds. Elara Securities downgrades the stock to accumulate from buy and raises its target price to 2,085 rupees from 1,968 rupees. Shares fall 0.7% to 1,831.85 rupees. (megan.cheah@wsj.com)
0800 GMT - Expectations for the European Central Bank to raise interest rates look overdone after recent data point to a fragile eurozone economy, analysts at Natixis say in a note. "Current ECB pricing remains aggressive relative to the likely deterioration in the Eurozone growth outlook," they say. Last week's provisional eurozone purchasing managers' data for May were unexpectedly weak as high oil prices dented consumer and business sentiment. Eurozone money markets price an 80% chance of a 25 basis-point ECB rate increase in June and fully price in two increases by the end of the year, LSEG data show. (jessica.fleetham@wsj.com)
0731 GMT - Bitcoin rises due to prospects of a deal between the U.S. and Iran that could potentially lead to the crucial Strait of Hormuz being reopened. This boosts risk appetite and helps crypto assets. However, bitcoin's gains are small and it remains well below the key $80,000 level, keeping within its recent trading range. Uncertainty remains over Iran. President Trump said Sunday he was in no rush to complete a deal and that both sides had to "take their time and get it right." Investors are also cautious due to recent outflows from bitcoin exchange-traded funds, analysts at Saxo say in a note. Bitcoin rises 0.8% to $77,210, LSEG data show. (jessica.fleetham@wsj.com)
0718 GMT - Bitcoin edges higher in the Asian session amid positive market sentiment driven by U.S.-Iran deal hopes. Also, recent pullback in U.S. Treasury yields and dollar weakness have helped improve risk appetite to some extent, XS.com's Linh Tran says in an email. This provides "short-term support for liquidity-sensitive assets such as Bitcoin," the market analyst says. However, "the current positive signal remains largely a short-term reaction," Tran says. While Treasury yields have declined, they are still elevated, reflecting "continued market caution over inflation risks, borrowing costs, and the outlook for Fed monetary policy," the analyst adds. Bitcoin is 0.2% higher at $77,237.00, FactSet data show. (ronnie.harui@wsj.com)
0710 GMT - Eurozone government bond yields fall on prospects of a deal between the U.S. and Iran, which could allow oil to flow more freely. This would reduce inflationary pressures and ease pressure on the European Central Bank to raise interest rates. President Trump said Saturday that a deal was close to being finalized. A senior Trump administration official told reporters Sunday the agreement in principle is for Iran to reopen the Strait of Hormuz, although Trump also said he was in no rush to secure a deal. Trade is quiet due to holidays in much of Europe, while U.S. and U.K. markets are closed. The German 10-year Bund yield falls 5 basis points to an 18-day low of 2.987%, Tradeweb data show. (jessica.fleetham@wsj.com)
0658 GMT - Asia-Pacific banks' credit profiles could be somewhat buoyed by government policy and sovereign credit strength even as the Middle East conflict drives up energy prices, says Moody's Ratings in a note. Governments in the region are likely to continue or introduce measures, such as fuel subsidies or price caps, to cushion higher energy costs' drag on borrowers, the analysts say. This could reduce nonperforming loan formation at banks, they say. Governments could also support large and midsize banks via capital injections, fiscal measures or funding, to reinforce market confidence, the analysts say. However, direct support in some emerging markets could be constrained by fiscal limitations, they add. (megan.cheah@wsj.com)
(END) Dow Jones Newswires
May 25, 2026 06:25 ET (10:25 GMT)
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