The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0627 GMT - China's economy may see be less affected by high energy prices in coming quarters, according to Goldman Sachs in a research note. Notable declines in the production of refined oil and chemicals, as well as the sharp drop in domestic retail fuel sales, are clear signs that the Iran war and higher oil prices weighed on Chinese economic activity, GS says. That said,GS lowers its oil price projections for Brent in 4Q from $90 per barrel to $80 per barrel as Iran reopens the Strait of Hormuz. GS expects the drag from elevated energy prices to gradually dissipate in coming quarters. (tracy.qu@wsj.com)
0621 GMT - Goldman Sachs revises its second-quarter GDP growth forecast for China to 3.5%, down from 4.0%, following weak economic data in April and May that disappointed outside of exports and industrial production. The investment bank estimates that export growth will contribute roughly 3 percentage points to China's year-over-year GDP growth, while domestic demand lags behind at a sluggish pace. However, Goldman expects third-quarter economic growth to rebound to 5.0%, and keeps its full-year GDP forecast unchanged at 4.7%. (singaporeeditors@dowjones.com)
0606 GMT - The Japanese government can only curb speculative yen weakness with currency intervention, says Mitsubishi UFJ Morgan Stanley Securities strategist Daisaku Ueno. "As the gap between positive and negative real policy rates in the U.S. and Japan persists, it would be difficult for the magic of currency intervention to permanently contain the yen-selling pressure, which is structurally driven by investment decisions and real demand arising from the economic activities of Japanese companies and individuals," he says. Japan's Finance Minister Satsuki Katayama says she is ready to take appropriate action in the foreign exchange market as needed. The dollar is last trading at 161.68 yen, well beyond the intervention danger zone. (megumi.fujikawa@wsj.com)
0546 GMT - U.S. Treasury yields rise as trade resumes after U.S. markets were closed due to a public holiday on Friday. The rise in yields is driven by the short-end of the curve, reflecting a higher likelihood of a Federal Reserve interest-rate hike this year following the Fed's meeting last week. The rise in yield comes despite a fall in oil prices even as U.S. and Iran concluded a first round of talks in Switzerland. Both countries agreed to the creation of a mechanism to ensure the termination of military operations in Lebanon, mediators said. The two-year Treasury yield is up 4.3 basis points to 4.220%, while the 10-year yield is up 3.4 basis points at 4.484%, according to Tradeweb. (emese.bartha@wsj.com)
0538 GMT - Edmond de Rothschild Asset Management has returned to neutral on U.S. Treasurys and European government debt, staying cautious over the Federal Reserve's policy, it says in a note. "We remain cautious on the new Fed committee's ability to react to events despite its stress on price stability," the asset manager says. The Fed seems both more likely to raise rates and yet risks being accused of allowing inflation to spiral out of control if it decides against a hike, Edmond de Rothschild Asset Management says. It has taken profits on emerging market debt and gone back to neutral. (emese.bartha@wsj.com)
0523 GMT - Southeast Asia's food prices are facing an upside risk in the coming months, Goldman Sachs economists in a research note. The oil shock from the Middle East conflict has shown up in fuel-sensitive consumer price index items, they say. Higher fertilizer prices will raise farm input, while a potential El Niño event in late 2026, which typically lifts global air temperature, could create another food supply shock, they add. GS estimates a 10% increase in local oil prices will raise Southeast Asia's food consumer price index by around 0.3 percentage points after 12 months. The El Niño effects are less precisely estimated, they add. (tracy.qu@wsj.com)
0523 GMT - Geopolitics remains a factor investors need to consider amid a fragile normalization around the Strait of Hormuz, SEB's Dana Malas says in a note. "Geopolitics is now a continuous risk factor for both investment decisions and forecasting," the data scientist and junior strategist says. Iran and the U.S. agreed to the creation of a mechanism to ensure the termination of military operations in Lebanon, mediators said. In a statement early Monday, Qatar and Pakistan--the two mediators in Iran peace talks--said a line of communication between Iran and the U.S. had been formed to avoid incidents and enable safe passage for commercial vessels through the Strait of Hormuz. (emese.bartha@wsj.com)
0510 GMT - Morgan Stanley favors five-year long in Italian government bonds versus Germany, its rates strategists say in a note. They initiated the position earlier in June and continue to see it as an attractive carry position. The position could benefit from the U.S.-Iran agreement and the resumption of traffic through the Strait of Hormuz, they say. Morgan Stanley also continues to like being long Ireland versus Belgium in the six-year maturity and short Austria versus Netherlands, or versus Germany, as an alternative. (emese.bartha@wsj.com)
0509 GMT - Germany's defense and infrastructure spending has been slow through April, and "absent a material pickup, we see limited scope for the DMO [German Finance Agency] to increase issuance on this basis," Morgan Stanley rates strategists say. Over the last 10 years, the Finance Agency decided to change its third-quarter plan approximately in 60% of times, though except for some idiosyncratic episodes, such as in 2020 for the Covid pandemic or last year on the back of the March fiscal announcement, the magnitude of the move has been fairly contained, they say. "We also do not expect the DMO to lower its issuance target on the back of undershooting defence and infrastructure spending." The Finance Agency will release its third-quarter borrowing review on June 25. (emese.bartha@wsj.com)
(END) Dow Jones Newswires
June 22, 2026 02:27 ET (06:27 GMT)
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