The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0708 GMT - U.K. public sector borrowing for June fell 33.1% compared to a year ago to 16 billion pounds, offering reassurance to investors, RBC Capital Markets strategists say in a note. Government revenue increased while expenditure fell slightly in June. U.K. public debt remains elevated, however, leaving limited room for raising spending. (miriam.mukuru@wsj.com)
0707 GMT - Malaysia's export momentum is expected to remain resilient in the near term, supported by strength across manufacturing and commodity-related sectors, as well as robust growth in intermediate and capital goods imports, CGS International economist Mas Aida Che Mansor says in a note. Continued artificial-intelligence-driven demand is likely to support exports of electronics and technology-related products into 2H, but reliance on the sector could become a risk once the global semiconductor cycle normalizes, she says. Energy-related exports are also expected to remain supportive, backed by elevated energy prices amid lingering geopolitical tensions and tight supply conditions, but growth could moderate if commodity prices stabilize further, she adds. (yingxian.wong@wsj.com)
0706 GMT - Sterling stays higher against the dollar and the euro, showing limited reaction to the latest U.K. jobs and public sector finances data. The unemployment rate held at 4.9% in the three months to May, whereas economists in a WSJ survey expected it to rise to 5.0%. Average earnings, excluding bonuses, rose 3.4% in line with the previous quarter's growth. Public sector borrowing was 16 billion pounds in June, down 7.6 billion pounds compared to a year ago. Sterling rises 0.1% to $1.3447 and the euro falls 0.1% to 0.8492 pounds, both little changed from levels before the data.(renae.dyer@wsj.com)
0705 GMT - The dollar falls slightly as hopes that the U.S. and Iran will agree a new ceasefire improve risk appetite and cause oil prices to ease. Mediators were working Monday to push the U.S. and Iran into a new ceasefire after Washington carried out a ninth straight night of attacks and Iran retaliated against U.S. Arab allies, The Wall Street Journal reports. However, the situation remains highly uncertain and the foreign exchange market has become less sensitive to geopolitical developments, instead focusing more on monetary policy. Markets have recently scaled back expectations for U.S. interest-rate rises following lower-than-expected inflation data last week.The DXY dollar index falls 0.1% to 100.902. (renae.dyer@wsj.com)
0655 GMT - U.K. public finances for June were a rare piece of good news for the new Prime Minister Andy Burnham and his Treasury chief John Healey. However, with the debt burden still rising there is limited scope for extra borrowing, Capital Economics' Ruth Gregory says in a note. The GBP16.0 billion public sector net borrowing total was lower than consensus and expectations by the OBR fiscal watchdog, and suggests public finances have been surprisingly resilient so far this year, she says. But GDP growth is set to slow in the third quarter, and further energy-price support could raise borrowing in the near term. "So we have not changed our view that borrowing will remain stuck at 4.2% of GDP this year, above the OBR's forecast of 3.6%," Gregory says. (edward.frankl@wsj.com)
0647 GMT - Eurozone government bond yields edge higher in opening trade as renewed military hostilities in the Middle East raise the prospect of oil supply disruptions again. Since Europe is a net energy importer, delivery bottlenecks could be inflationary, resulting in a risk of rising bond yields. Oil price volatility was also reflected in global bond yields Monday, and "we expect that the volatility will continue as the war continues," Danske Bank's Kristoffer Kjaer Lomholt says in a note. The 10-year German Bund yield is up 0.5 basis points at 3.150%, according to LSEG. (emese.bartha@wsj.com)
0644 GMT - Sterling rises following the surprise appointment of former U.K. defense secretary John Healey as treasury chief after Andy Burnham became prime minister Monday. "Healey had been voted as one of the more investor-friendly options for Chancellor in a recent Bloomberg survey, though there's little visibility on his fiscal views," Deutsche Bank analysts say in a note. Shabana Mahmood was widely expected to become treasury chief but will instead retain her role as home secretary. Burnham said in a speech Monday that he will unveil some of its policy measures and how he plans to pay for them Tuesday. Sterling rises 0.1% to $1.3448. The euro falls 0.1% to 0.8491 pounds. (renae.dyer@wsj.com)
0610 GMT - The spread between 10-year and two-year Treasury yields is expected to narrow further over the coming months, potentially leading to an inversion, Capital Economics' James Reilly says in a note. "We think that continued escalation in the Strait of Hormuz could lead to the curve inverting outright," the senior markets economist says. The flattening has been driven by real yields amid a surge in two-year real yields. "We expect the 2s10s curve to flatten in the coming months as investors' rate expectations rise further," he says. The yield spread between the 10-year and two-year maturities is currently 39 basis points, compared with 72 basis points at the beginning of the year, according to Tradeweb. (emese.bartha@wsj.com)
0553 GMT - Germany's launch of new October 2031-dated federal notes, or Bobl, on Tuesday deserves special attention after tepid demand seen at the last new 10-year Bund and new two-year Schatz auctions, Commerzbank's Hauke Siemssen says in a note. The roll is quoted close to 2.5 basis points, and the new Bobl thus seems "rather cheap," the rates strategist says. This argues for better demand at the upcoming 6 billion euros auction, he says. As for Bunds, despite this rather challenging market environment, the recent ranges in Bund yields have held for now, Siemssen adds. (emese.bartha@wsj.com)
0544 GMT - U.S. Treasury yields edge lower in line as oil prices decline slightly even as the Middle East conflict does not abate. Following the collapse of the U.S.-Iran Memorandum of Understanding for peace, "the conflict now largely revolves around control of the Strait of Hormuz," SEB's Maya Westerlund says in a note. However, the risk is a more prolonged stalemate, with continued uncertain energy flows, higher oil prices and recurring attacks, she says. The two-year Treasury yield falls 1.3 bps to 4.200%, while the 10-year yield declines 0.6 bps to 4.591%, according to Tradeweb. (emese.bartha@wsj.com)
0529 GMT - The bar for a further selloff in eurozone front-end government bonds is high, as market expectations of more than two further 25-basis-point rate hikes by the European Central Bank over the next 12 months are already priced in, Mediolanum International Funds' Niall Scanlon says in a note. "The front end has already repriced materially on the renewed inflation risk," the fixed-income portfolio manager says. The main risk to that view is a governing council that leans harder on gas-driven inflation than Mediolanum anticipates, Scanlon says. At this week's meeting, Mediolanum expects ECB President Christine Lagarde to reaffirm the commitment to the 2% target and flag upside inflation risks from energy, while stopping short of fully endorsing the additional tightening the market has priced. (emese.bartha@wsj.com)
0526 GMT - The recent volatility in inflation leading economic indicators (LEIs) is poised to push up stock-bond correlations, continuing a macro environment where bonds are less effective as equity diversifiers, Variant Perception says in a note. Variant's leading indicator for stock-bond correlations is ticking higher again, signaling positive expected correlations ahead, it says. "This has been driven by rising volatility of our inflation LEI," it says. More frequent inflation shocks tend to restrict central bank policy flexibility, resulting in slower policy responses to negative shocks and driving up stock-bond correlations, it adds. (emese.bartha@wsj.com)
(END) Dow Jones Newswires
July 21, 2026 03:08 ET (07:08 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments