The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0558 GMT - German Bunds look set to remain stuck in a range with yields trading less directional to oil prices, Commerzbank Research's Rainer Guntermann and Erik Liem say in a note. The macro calendar is sparse and impulse from U.S. Treasurys won't come either due to the Juneteenth holiday. The 2.92% mark still serves as a soft floor before more macro stimulus arrives next week, the rates strategists say. The 10-year Bund yield closed at 2.92% on Thursday, according to Tradeweb. (emese.bartha@wsj.com)
0550 GMT - Current market conviction around Federal Reserve interest-rate hikes in 2026 appears "somewhat aggressive", says UBS Global Wealth Management CIO Mark Haefele in a note. UBS GWM continues to recommend exposure to short- to medium-term duration quality bonds. The combination of a new Fed regime under Chairman Kevin Warsh, hawkish projections and a wide dispersion of views implies a higher bar for near-term action in either direction, Haefele says. "In our view, this points to an extended period of policy on hold, with meaningful adjustments more likely once the task force process is complete, and the Committee has greater clarity on the economic outlook." Money markets price in approximately 38 basis points of Fed rate hike this year, according to LSEG. (emese.bartha@wsj.com)
0530 GMT - The Federal Reserve might still cut interest rates this year, even as the likelihood is small, says Navellier & Associates' Louis Navellier in a note. "Due to the fact that market rates have declined a bit and might fall further as energy prices fizzle, I am still holding out for a Fed key interest rate cut later this year, but I am in a small minority," he says. Fed Chairman Kevin Warsh confirmed that the Fed's forward guidance has been dropped, which is his first big stamp on the FOMC, Navellier says. Money markets currently price in 38 basis points of interest-rate hikes by the Fed through year end, according to LSEG.(emese.bartha@wsj.com)
0526 GMT - The German Finance Agency's third-quarter issuance update on June 25 is expected to broadly maintain headline bond supply and flexibility via short-term instruments, Citi's Puja Sawant says in a note. Ten-year Bunds should be dominating supply in the third quarter, while net cash requirement should peak in July before a seasonal slowdown in the fourth quarter, the rates strategist says. "Beyond 2026, we forecast gross bond issuance to trend higher into the 365 billion euros-415 billion euros range, while net cash requirement remains elevated, but broadly stable over 2027-30," she says. (emese.bartha@wsj.com)
0520 GMT - The summer environment could prove favorable for carry trades in eurozone government bonds, provided the U.S.-Iran deal holds, Barclays's rates strategists say in a note. The supply is set to see a seasonal slowdown, and even after the summer, issuance volumes should remain contained relative to earlier in the year, they say. "We project gross issuance rising sharply, to approximately 140 billion euros, in September, but this remains far below January's total just below 200 billion euros," the strategists say. September's estimated net issuance total of approximately 60 billion euros should also remain far below January's approximately 130 billion euros, they say. "This largely reflects the fact that the bulk of anticipated syndicated supply for 2026 has already materialized." (emese.bartha@wsj.com)
0517 GMT - SMBC now sees a "firm-to-stronger" U.S. dollar against Asian currencies in 2H, says Jeff Ng, head of Asia macro strategy, in a research report. "Market expectations have now shifted" toward a potential Fed rate increase, Ng says. The Fed at its June FOMC meeting turned hawkish, confirming SMBC's expectations that the Fed will have to focus on combating inflation. SMBC sees the Singapore dollar potentially weakening against its U.S. counterpart even as it stays strong on a Singapore dollar nominal effective exchange rate basis. Also, this trend will probably mean another round of headwinds for the Indian rupee, Philippine peso and Indonesian rupiah. Moreover, the Malaysian ringgit, Korean won and Thai baht will likely "suffer" from widening yield differential pressures, Ng adds. (ronnie.harui@wsj.com)
0511 GMT - Any sizable changes to the German Finance Agency's 3Q debt issuance calendar against its preliminary plans would be a surprise, Barclays' rates strategists say in a note. The German Finance Agency is scheduled to publish its quarterly funding review on June 25. It had previously indicated 'a high likelihood' that the 2026 issuance calendar would be executed without major intra-year adjustments, the strategists say. The agency made no changes to 2Q funding plan versus the preliminary plans. (emese.bartha@wsj.com)
0510 GMT - Eurozone government bond yield spreads felt modest relief tightening impulses on the U.S.-Iran deal, Barclays rates strategists say in a note. This caused the 10-year Italian BTP-German Bund yield spread to tighten to the bottom of the 70-95 basis point range that has held since early March, they say. The 10-year BTP-Bund and French OAT-Bund yield spreads are still about 10 basis points wider, while the widening has been more modest for other countries, and spreads for Austria, Ireland and the Netherlands have tightened, they say. "Investors are therefore demanding modest additional post-war risk premium in countries with more challenging fiscal fundamentals...whereas this is not the case for more highly rated core sovereigns." (emese.bartha@wsj.com)
(END) Dow Jones Newswires
June 19, 2026 01:59 ET (05:59 GMT)
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