Global Forex and Fixed Income Roundup: Market Talk

The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.

0602 GMT - Eurozone government bond markets may be relieved on Thursday as the European Central Bank is set to remain on hold and President Christine Lagarde not pre-committing to a September rate hike, Commerzbank's Rainer Guntermann says in a note. Money markets expect the ECB to keep interest rates on hold Thursday, according to LSEG. Lagarde, however, will probably open the door for a rate hike in September, the rates strategist says. "Year-to-date highs in 10-year Bund yields close to 3.2% should provide support, with tomorrow's PMIs likely reminding markets about the challenging growth backdrop," Guntermann says. He adds that the latest dynamics in energy prices add spice to the outlook for interest rates. (emese.bartha@wsj.com)

0555 GMT - There is increasing focus on the outright level for government bond yields, such as the 30-year U.S. Treasury yield, Danske Bank's Kristoffer Kjaer Lomholt says in a note. The 30-year Treasury yield is trading above 5% "and this is becoming more persistent," the director in fixed income and FX research says. The escalation of the war in the Middle East, where the Houthis hit two Saudi oil tankers in the Red Sea, and the subsequent rise in the oil price with Brent approaching $100 per barrel, is adding pressure on inflation ahead of next week's Federal Reserve FOMC meeting, he says. The 30-year Treasury yield trades 0.2 basis points higher at 5.149%, near a two-month high, according to Tradeweb. (emese.bartha@wsj.com)

0547 GMT - The recent escalation in the Arabic Gulf region and rising energy prices are developments that are unlikely to please central bankers, Helaba analysts say ahead of the European Central Bank's monetary policy decision later in the day. "Nevertheless, there are no clear indications of an imminent interest rate hike," the analysts say, waiting for any signals whether a rate increase at the following meeting in September will be signaled. Money markets currently price in a 21bps ECB rate hike in September, according to LSEG. The wording of the ECB statement-indicating that the Council does not commit to a specific interest rate path in advance-is unlikely to change significantly, according to Helaba analysts who expect the ECB to keep decision-making on a meeting-by-meeting basis. (emese.bartha@wsj.com)

0535 GMT - U.S. Treasury yields across maturities are trading at or near multimonth highs in Asian trade, only marginally higher on the day, as oil prices continue rising. The two-year Treasury yield rose to 4.309% before edging back to 4.307%, staying close to Wednesday's 4.311%, the highest level since February 2025, according to Tradeweb. The 10-year Treasury yield matched Wednesday's two-month high of 4.665% before retreating to 4.659%; and the 30-year yield is just off Wednesday's two-month high of 5.154%, last trading at 5.150%. (emese.bartha@wsj.com)

0515 GMT - Within euro fixed income markets, ​the two- to five-year segment currently offers the most compelling risk-reward profile​, Carmignac's Kevin Thozet says in a note. Markets are currently pricing in more than two rate hikes over the next 12 months, taking the ECB's policy rate to 2.75%, followed by an almost indefinite stay at that level, the member of the investment committee says. "This path looks too hawkish relative to the likely neutral rate." If the ECB's eventual policy rate is closer to 2%, current market pricing leaves room for a meaningful downward repricing of rate expectations, he says. Against this backdrop, the intermediate segment stands out as the sweet spot, combining attractive carry, supportive valuations and the greatest potential to benefit from a more dovish policy path, Thozet says. (emese.bartha@wsj.com)

0514 GMT - The main opportunity in European fixed income lies in the attractiveness of the very steep yield curve, Neuberger's Patrick Barbe says in a note. This offers high carry returns on long-dated bonds relative to the moderate domestic inflation risk in the eurozone,the European fixed income head says. The European Central Bank's preemptive policy doesn't alter the return outlook for eurozone bonds, "which is is driven by the eurozone's internal fundamentals-characterized by weak economic activity, particularly in terms ofinvestment spending," he says. "In reality, this restrictive policy exacerbates the weakness in investment." (emese.bartha@wsj.com)

(END) Dow Jones Newswires

July 23, 2026 02:02 ET (06:02 GMT)

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