The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0557 GMT - U.S. Treasury yields fall in Asian trade following last Thursday's weaker-than-expected employment data that led the markets to scale back their expectations of Federal Reserve rate hikes. Brent oil trades marginally lower, just below $72 per barrel, after the Organization of the Petroleum Exporting Countries and its allies decided to increase oil output again as shipping traffic through the Strait of Hormuz gradually recovers. The two-year U.S. Treasury yield declines 0.4 basis points to 4.126%, while the 10-year yield falls 0.6 basis points to 4.472%, according to Tradeweb. (emese.bartha@wsj.com)
0540 GMT - Softer U.S. labor data and better inflation prints have reduced the urgency around further Federal Reserve tightening, but they haven't settled whether growth is slowing in a manageable way or whether policy expectations have moved too far, BNY's Geoff Yu says in a note. "The global narrative is becoming less uniform," the senior EMEA macro strategist says. In the U.S., the question is whether the Fed can stay patient without seeing inflation risks reemerge, he says. In Europe, meanwhile, the debate is moving away from emergency inflation management and back toward growth, fiscal credibility and defense financing, he says. (emese.bartha@wsj.com)
0537 GMT - Higher U.S. Treasury yields are forcing investors to reassess crowded bond exposure, BNY's Geoff Yu says in a note. However, the adjustment is not yet a broad exit from risk, the senior EMEA macro strategist says. "That distinction matters: equities, selective carry and currencies with stronger domestic anchors can still attract capital even as duration remains vulnerable," he says. The 10-year U.S. Treasury yield last trades at 4.472%, down 0.6 basis points, according to Tradeweb. (emese.bartha@wsj.com)
0523 GMT - Morgan Stanley enters short in French government bonds versus an equal-weighted basket of Italian and German peers, pointing to fiscal risks in France. "Fiscal concerns have resurfaced and should remain a source of pressure," they say. In our view, valuations do not yet fully capture political and fiscal risks, and the coming agenda could act as an additional catalyst. (emese.bartha@wsj.com)
0516 GMT - China's consumer price index likely rose modestly in June, according to BofA Securities in a research note. BofA estimates CPI inflation to rise to 1.3% year-over-year in June, from 1.2% in May. This was mainly due to higher vegetable prices offsetting lower pork and fruit prices, the bank says. While oil prices have fallen, their still-elevated year-over-year levels continue to support non-food inflation, BofA says. PPI inflation also likely increased to 4.4% year-over-year in June from 3.9% in May, the bank says. This was supported by firmer producer goods prices, it adds. (tracy.qu@wsj.com)
0508 GMT - Taiwan's June inflation likely remained above the 2% level, which is closely watched by the central bank, for a second consecutive month. Headline CPI likely rose 2.25% on year after a 2.2% gain in May, according to a Wall Street Journal poll of six economists, whose inflation estimates range between 2.1% and 2.4%. Although oil prices have eased, cost pass-through from upstream producers to downstream manufacturers and retailers is expected to persist, DBS economists say in a note. A low base from last year likely also pushed headline inflation higher, Barclays economists said. The inflation print in the next few months will be critical as Taiwan's central bank has tilted slightly hawkish. Both ANZ and DBS expect Taiwan's central bank to deliver a rate hike in September.(sherry.qin@wsj.com)
0503 GMT - The Bank of Japan's output gap estimates for the first quarter showed a stable positive trend, a mechanism that helps drive inflation higher, says SMBC Nikko Securities economist Yoshimasa Maruyama. The reading could be seen as justifying further interest rate hikes, he says. However, the size of the positive gap didn't expand, suggesting there is little immediate need to accelerate monetary tightening, he adds. "Any future need to speed up the pace or increase the scale of additional rate hikes would likely stem from a lagged but pronounced pass-through of inflationary pressures caused by the Middle East situation or rising inflation expectations." (megumi.fujikawa@wsj.com)
(END) Dow Jones Newswires
July 06, 2026 01:57 ET (05:57 GMT)
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