The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0656 GMT - Eurozone government bond yields fall in early trade, responding to weaker-than-expected U.K. inflation data. U.K. annual CPI inflation remained at 2.8%, against expectations in a WSJ poll for a rise to 3.0%. Pressure on the Bank of England to hike rates this year will "continue to fade" as a result, Aberdeen's Luke Bartholomew says in a note. The BOE is expected to hold rates on Thursday, although one or two policymakers could still vote for an increase, he says. Government bond supply in the eurozone is due from Germany, which will auction a total of 2.5 billion euros in 2047- and 2053-dated Bunds. The 10-year Bund yield falls 2.2 basis points to 2.920%, according to Tradeweb. (emese.bartha@wsj.com)
0649 GMT - The dollar trades steady as investors wait for the Federal Reserve's policy decision at 1800 GMT. The Fed is widely expected to leave rates steady but markets will be looking for clues on the future direction of policy from new Fed Chair Kevin Warsh. Warsh is unlikely to position himself strongly against the Fed in his first meeting as chair by voting for a rate cut straight away, Commerzbank's Antje Praefcke says in a note. For the dollar, the decisive factor will be whether he describes the energy price shock as temporary and leaves market expectations for future rate rises looking unjustified, she says. The DXY dollar index trades flat at 99.554. (renae.dyer@wsj.com)
0647 GMT - Sterling falls to its lowest in nearly two weeks against the euro after annual U.K. inflation remained at 2.8% in May, below the consensus forecasts in a WSJ survey for a rise to 3.0%. Core inflation rose to 2.6% from 2.5% in April, below the expected 2.7%. For the Bank of England, the data "reduces some of the urgency" surrounding the potential need to raise interest rates, Capital.com's Daniela Hathorn says in a note. The BOE is expected to leave rates unchanged Thursday but the market expects a rate rise by December, LSEG data show. The euro rises to a 12-day high of 0.8653 pounds after the data, from 0.8645 beforehand. Sterling falls to an intraday low of $1.3409, from $1.3428 previously. (renae.dyer@wsj.com)
0646 GMT - China is likely to continue to raise spending in AI in the next few years, according to BofA Securities in a research note. BofA expects China's AI data-center capital expenditure to grow from $91 billion in 2025 to $330 billion in 2030, driven by leading internet and cloud platforms, alongside government funding. Within commodities, copper is among BofA's top picks as powering AI will indirectly drive demand for the metal on persistent supply tightness, the analysts say. Minor materials, such as rare earths, tungsten and uranium, are small in volume but critical in value, they note. BofA has buy ratings on Zijin Mining and JL Mag Rare-Earth. (tracy.qu@wsj.com)
0644 GMT - China's household asset allocation is at the early stage of a structural shift, Goldman Sachs analysts say in a research note. As property's role in wealth accumulation fades and deposit rates stay low, savings are likely to migrate gradually toward broader financial assets, with equities and insurance the key potential beneficiaries in the medium term, they say. In 1Q, property accounted for 52% of Chinese households' assets, down from 67% in mid 2021 when the property market peaked, according to GS's data. The bank expects property to decline to around 42% of household assets by 2035. However, they anticipate that the adjustment is unlikely to be linear or broad-based, given still-cautious risk appetite and the uneven distribution of financial wealth. (sherry.qin@wsj.com)
0636 GMT - Inflation remaining unchanged in May will almost certainly mean no interest-rate rise on Thursday from the Bank of England, Joe Nellis at MHA says in a note. Annual inflation was 2.8% in May, in line with the prior month and below forecasts. "The Bank is continuing to hold their nerve, as they monitor the difficult, ongoing trade-off between keeping inflation under control and avoiding further damage to an economy," Nellis says. The BOE may not have to raise rates at all this year, with inflation likely to stay below 4% if peace holds in the Middle East. Still, inflation is likely to edge higher over coming months, even if Middle East tensions are resolved quickly, Nellis adds. (don.forbes@wsj.com)
0551 GMT - The German Finance Agency's dual-tranche ultralong Bund auction features the only supply in the eurozone on Wednesday. Germany will auction 1 billion euros of the 3.40% May 2047 Bund and 1.5 billion euros of the 1.80% August 2053 Bund. Bond markets stay supported with Brent oil slipping below the $80 per barrel, says Commerzbank's Hauke Siemssen in a note. In Tuesday's session, long-end yields benefited the most, along with the tightening of eurozone government bond yields spreads, while the front-end faded the rally in the afternoon and the curve flattening from both sides, the rates strategist says. (emese.bartha@wsj.com)
0535 GMT - Investors will pay particular attention to the new Federal Reserve Chairman Kevin Warsh's first press conference on Wednesday, LBBW analysts say in a note. As this is the first appearance of the new Chairman, "his communication will be the focus of market participants," the analysts say. "He is expected to pursue a more restrained communication strategy for the Fed," they add. The Fed is expected to leave the interest rate unchanged at 3.50%-3.75%. (emese.bartha@wsj.com)
0527 GMT - Singapore's continued non-oil domestic exports growth is likely to continue in the near term, says DBS senior economist Chua Han Teng in an email. NODX surged 38.4% on year in May, the strongest since December 2003. Global artificial intelligence-related tailwinds are supporting external demand for Singapore's memory chips and server-related products. Flows of critical input supplies, including oil and gas, from the Middle East are likely to take time normalizing to pre-conflict levels. However, the expected reopening of the Strait of Hormuz would ease input cost pressures and supply chain disruptions, Chua says.(amanda.lee@wsj.com)
0527 GMT - Japan is rapidly diversifying away from its heavy reliance on Middle Eastern crude amid supply disruptions. The share of Japan's total oil imports from the Middle East on a volume basis fell from around 94% in 2025 to around 80% in April and May, says NLI Research Institute economist Taro Saito. "The diversification of crude sourcing is likely to make further progress," he says.. However, this supply security comes at a premium. Japan's crude import prices from the U.S. during April and May were roughly $10 per barrel higher than price of Middle Eastern crude, Saito says. (megumi.fujikawa@wsj.com)
0526 GMT - U.S. Treasury yields are marginally higher in Asian trade ahead of the Federal Reserve's interest-rate decision later Wednesday. The Fed is broadly expected to leave policy rates unchanged at 3.50%-3.75%, while the main element of surprise is expected to come from Kevin Warsh's first FOMC meeting and press conference as Fed chairman, says Carmignac's Kevin Thozet in a note. "Investors are now almost evenly split between the prospect of further tightening and that of policy easing, effectively pricing a steady Fed through year-end," the member of the investment committee says. The two-year Treasury yield is up 0.3 basis point at 4.047%, while the 10-year yield rises 0.6 basis point to 4.433%, according to Tradeweb. (emese.bartha@wsj.com)
0523 GMT - Singapore is rapidly emerging as a global test bed for tokenization, according to a new PwC report. The firm says the city-state is moving tokenization from pilot programs to commercial deployment, citing a series of government-led initiatives including the Monetary Authority of Singapore's Project Guardian, a stablecoin regulatory regime, and planned trials for the issuance and settlement of tokenized MAS bills using central bank digital currencies. Singapore's variable capital company framework and its network of double taxation agreements with more than 80 countries further strengthens its position as a hub for cross-border Asia-Pacific investment mandates, the report adds. (jason.chau@wsj.com)
(END) Dow Jones Newswires
June 17, 2026 02:56 ET (06:56 GMT)
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