The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0208 GMT - The National Australia Bank has made "meaningful" upward revisions to its U.S. dollar projections across all major currencies, having earlier been hesitant to make changes due to the "fog of war." The key driver of the revisions is that the U.S. economy is proving much more resilient than anticipated, keeping inflation elevated and prompting a hawkish pivot by the Fed, NAB says. Still, NAB isn't yet forecasting that the Fed will lift rates, but it notes that the U.S. dollar's upswing since May has closely tracked the evolution of Fed policy expectations. (james.glynn@wsj.com; @JamesGlynnWSJ)
0142 GMT - Malaysia's Budget 2027 is expected to be 'selectively expansionary,' focusing on cost-of-living relief, targeted transfers, infrastructure delivery and faster state-level project execution ahead of the next general election, Public Investment Bank analyst Sabrina Edora says in a note. Domestic demand is expected to remain the main growth driver in 2H, supported by resilient consumption and investment. The analyst maintains her 2026 GDP growth estimate at 4.6%. She expects the next general election to have a limited impact on the 2026 growth trajectory, but markets will closely monitor fiscal policies and project execution. She cuts her 2026 inflation forecast to 2.1% from 2.4% following lower oil prices, this should allow Bank Negara to keep its policy rate at 2.75% through end-2026. (yingxian.wong@wsj.com)
0108 GMT - The National Australia Bank has adopted a bearish outlook for the Australian dollar in 2027 based on a view that the Reserve Bank of Australia will cut the official cash rate 75 bps starting in 2Q 2027. NAB now forecasts the Aussie dollar-U.S. dollar pair will end 2027 at 0.6700, from its previous 0.7000 expectation, but the view allows for it to trade down to at least 0.6500 at some point. If the RBA cuts rates next year and the Fed sits pat, the outlook for the Australian dollar looks increasingly ominous, NAB adds. The pair now trades at 0.6919. (james.glynn@wsj.com; X @JamesGlynnWSJ)
0054 GMT - The Singapore central bank is likely to tighten its monetary policy in July, although it could be a close call, says Citi Research's Wei Zheng Kit in a note. Concerns have shifted to core inflation persistently staying above the implicit 1.5%-2% target, he says, with sustained food-services price increases a particular concern. The balance of risks likely suggests the current policy stance might be too accommodative, the economist says. The city-state's positive output gap--a metric that shows whether the economy is operating near its full capacity--has also likely widened since the last central-bank statement, he says.Still, the central bank could stand pat as the April tightening has likely provided the Monetary Authority of Singapore with some buffer, he says. (megan.cheah@wsj.com)
0020 GMT - Japanese stocks are lower in early trade as uncertainty over the Middle East conflict continues. Electronics and technology stocks are leading the declines. Kioxia Holdings is down 7.0% and SoftBank Group is 4.6% lower. The dollar is at 161.47 yen, down from Y162.25 as of Thursday's Tokyo stock market close, following disappointing U.S. jobs data. Investors are closely watching any progress in U.S.-Iran peace talks and crude oil prices. The Nikkei Stock Average is down 1.0% at 68065.34. (kosaku.narioka@wsj.com; @kosakunarioka)
0018 GMT - The yen weakens against most other G-10 and Asian currencies on a possible technical correction. The yen strengthened notably overnight as weaker-than-expected U.S. nonfarm payrolls report prompted traders to scale back Fed rate-hike expectations and unwind some long dollar positions, particularly against the yen. However, "with U.S. markets closed for the Independence day celebrations, currency liquidity will be thin, an ideal time [for intervention] to have a large impact on the market," CBA's Joseph Capurso says in a research report. "The MoF has surprised markets with interventions during public holidays," the head of Foreign Exchange, International & Geoeconomics notes. The dollar edges 0.2% higher to 161.48 yen, and the euro is 0.1% higher at 184.44 yen, FactSet data show. (ronnie.harui@wsj.com)
0015 GMT - The JGB yield curve steepens in early Tokyo trade amid some headwinds. The JGB curve has bear-steepened sharply this week on "concerns of a behind-the-curve BoJ and worries about [Japan's] fiscal outlook," two analysts at Barclays Securities Japan say in a research report. Hence, market participants are likely to continue waiting for details on fiscal spending, the analysts say, noting a possible Cabinet decision on the government's draft 'Basic Policy on Economic and Fiscal Management and Reform'. The five-year JGB yield is down 1 bp at 1.920%; the 10-year yield is up 2 bps at 2.800% after earlier touching 2.810%, its highest intraday level since October 1996, according to data provider Quick. (ronnie.harui@wsj.com)
2348 GMT - Japanese stocks may remain rangebound as uncertainty over the Middle East conflict continues. Nikkei futures are flat at 68675 on the SGX. The dollar is at 161.31 yen, down from Y162.25 as of Thursday's Tokyo stock market close, following disappointing U.S. jobs data. Investors are focusing on any progress in U.S.-Iran peace talks and crude oil prices. The Nikkei Stock Average fell 2.5% to 68733.15 on Thursday. (kosaku.narioka@wsj.com)
2305 GMT - Reports that Japan's Ministry of Finance is abandoning its custom of telegraphing intervention risks and may instead enter the FX market to surprise market participants, has traders on edge. The idea here is the prospect of surprise intervention may make speculators think twice before adding to bearish JPY positions, says CBA economist Joe Capurso. With U.S. markets closed for Independence Day celebrations, currency liquidity will be thin--an ideal time to have a large effect on the market, he adds. The MoF has surprised markets with interventions during public holidays before. (james.glynn@wsj.com; @JamesGlynnWSJ)
2256 GMT - JPY is the strongest G10 currency, with USD/JPY falling from above 162 to around 161.0, amid reports Japanese authorities may be shifting away from calibrated jawboning toward more surprise-based intervention tactics, says NAB in a note to clients. The issue for JPY remains that fundamentals still point to weakness--deeply negative real yields, slow BoJ normalization and continuing JGB purchases--but thin U.S. holiday liquidity raises the tactical risk of intervention, NAB adds. (james.glynn@wsj.com; @JamesGlynnWSJ)
2244 GMT - USD/JPY is lower, weighed down by suspected intervention to support the yen that kicked in around five hours ahead of news of cooler-than-expected U.S. employment data, says Tony Sycamore, market analyst at IG Markets. He expects another round of intervention over the next one or two trading sessions, which would likely secure Tuesday's 162.83 print as a short-term top with scope to hold for the next six to eight weeks. Whether it becomes a more meaningful medium-term high will ultimately depend on incoming U.S. data and, to some degree, developments in the Japanese government bond market, he adds. (james.glynn@wsj.com; @JamesGlynnWSJ)
1905 GMT - Treasury yields recover ground lost after disappointing labor data and end the week higher. The BLS puts June job creation at 57,000, about half as many as expected. The surprise reduces odds of Fed interest rate increases priced into fed fund futures, although at least one hike this year remains the highest probability, according to CME. Inflation expectations priced inswaps trade match the Fed's 2% target, according to LSEG. Bond markets close earlier and won't reopen until Monday. Next week will bring June services PMI and existing home sales. The 10-year yield rises 0.105 percentage point this week to 4.447%. The two-year increases 0.043 p.p. to 4.130%. (paulo.trevisani@wsj.com; @ptrevisani)
(END) Dow Jones Newswires
July 02, 2026 22:08 ET (02:08 GMT)
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