The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0612 GMT - U.S. Treasury yields rise across maturities in European trade, reflecting an escalation of the Middle East conflict and a subsequent rise in oil prices. "President Trump's defense of expanded U.S. strikes on Iran has strengthened fears that the confrontation could last longer or move beyond its original objectives," Zaye Capital Markets CIO Naeem Aslam says in a note. Trump's remarks matter for oil because any escalation near production facilities, export terminals or key shipping routes could remove barrels from the global market before producers can replace them, Aslam says. The 10-year U.S. Treasury yield is up 2.9 basis points at 4.569%, according to LSEG. (emese.bartha@wsj.com)
0611 GMT - OpenAI and Anthropic have reached extraordinary valuations and are both reportedly considering public listings. Valuations rest on the assumption that AI spending will continue expanding, says Ipek Ozkardeskaya, market strategist at Swissquote. The problem is that Chinese AI models are said to cost up to 100 times less, which could force U.S. providers to reduce prices, she says. Lower prices would compress revenue expectations, making the current eye-watering valuations increasingly difficult to justify. The mismatch is already striking, she adds. OpenAI is generating roughly US$25 billion in annualised revenue against an US$852 billion valuation, she says.(james.glynn@wsj.com; @JamesGlynnWSJ)
0608 GMT - Energy prices and headline risks are likely to remain the key drivers for Bunds, curves and spreads ahead of the European Central Bank's monetary policy decision, Commerzbank's Rainer Guntermann says in a note. German 10-year Bund yields could test last week's highs at 3.16%, but these levels may also provide some support, the rates strategist says. Brent oil last trades at $90.57, up 2.80%. On Friday, the 10-year Bund yield closed at 3.123%, according to LSEG. (emese.bartha@wsj.com)
0601 GMT - Rising oil prices leave another interest-rate hike by the European Central Bank in the offing for September, which is also fully priced in, Commerzbank's Rainer Guntermann says in a note. ECB President Christine Lagarde is likely to strike a firm tone with regard to inflation risks, the rates strategist says ahead of the ECB's monetary policy decision Thursday. Lagarde, however, is unlikely to precommit to a September hike, as the situation remains in flux amid rising headwinds to growth, Guntermann says. (emese.bartha@wsj.com)
0551 GMT - The war between the U.S. and Iran continues to put pressure on oil prices as well as global rates, bond yields and monetary policy expectations, Danske Bank's Kristoffer Kjaer Lomholt says in a note. As a result, the 10-year German Bund yield is back above 3%, while 30-year U.S. Treasury yield is above 5%, says the director for fixed income and FX research. Brent crude oil has risen above $90 per barrel. Danske continues to expect one more interest-rate hike from the European Central Bank in 2026 after a 25bp increase in June. It considers the outright levels for yields and rates as looking attractive, expecting the 3% level for 10-year Bunds to hold. (emese.bartha@wsj.com)
0549 GMT - The Indian rupee and several other Asian currencies weaken against the dollar amid rising oil prices. Major net oil importers such as India are widely perceived to be extremely vulnerable to higher oil prices, which typically stoke inflationary pressures. "Risks are to the upside [for India's inflation] given renewed hostilities between the U.S. and Iran," Capital Economics' Shilan Shah says in recent commentary. "Developments in the Middle East have put the Indian rupee under renewed downward pressure," the deputy chief emerging markets economist adds. The dollar is 0.2% higher at 96.4650 rupees after earlier touching 96.4725 rupees, its highest intraday level since May 21, LSEG data show. (ronnie.harui@wsj.com)
0537 GMT - For the time being, foreign investors from the private sector have apparently returned to the role they have played for many years as stable net buyers of U.S. Treasurys, LBBW's Elmar Voelker says in a note. "In our view, the latter was temporarily in doubt during the second half of 2025--that is, in the aftermath of U.S. President Trump's so-called 'Liberation Day'," the senior fixed-income analyst says. LBBW gets the impression that the increased global uncertainty in the financial markets in the wake of the war in Iran has reanimated the role of U.S. Treasurys as a safe haven, for now at least. "This finding is consistent with the sharp appreciation of the U.S. dollar relative to other major currencies since the end of February 2026." (emese.bartha@wsj.com)
0518 GMT - Morgan Stanley closes its long five-year Italy versus Germany bond trade, seeing currently limited room for spread tightening, its strategists say in a note. The trade was initiated in June on the back of renewed optimism around the Middle East. "With geopolitical uncertainty having resurfaced and remained elevated for more than a week, we now see limited scope for further Italy tightening," they say. "[Italian government bonds] BTPs continued to trade largely as a function of Brent." Morgan Stanley also closes its short France versus an equal-weighted basket of Italy and Germany. The 10-year Italian BTP-German Bund yield spread closed just shy of 83 bps on Friday, according to LSEG. (emese.bartha@wsj.com)
0512 GMT - The inflation impact on bond yields is more important than fiscal considerations, says Chris Iggo, CIO for AXA IM Core and chair of the AXA IM Investment Institute at BNP Paribas Asset Management, in a note. "Governments can at least try to control borrowing, but central banks have found it hard to control inflation and monetary policy has been compromised since the global financial crisis," he says. This is not to minimize deficit and debt considerations; profligate fiscal policies always run the risk of upsetting the bond vigilantes, he says. Elevated levels of government bond supply will be more easily absorbed if investors buying the bonds are confident of maintaining the real value of their investments, Iggo says. (emese.bartha@wsj.com)
(END) Dow Jones Newswires
July 20, 2026 02:12 ET (06:12 GMT)
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