The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0559 GMT - The German Finance Agency's tap of 2.60% May 2041 and 3.40% May 2047 Bunds should go ahead smoothly, Danske Bank's Kristoffer Kjaer Lomholt says in a note. "This should be an uneventful tap auction as there is usually decent demand at the auction for the 15Y-20Y segment on the German curve as this has been a cheap segment on the curve when we look at ASW-spreads," the director in fixed income and FX research says. The German Finance Agency will auction a total of 2 billion euros in the two Bunds. (emese.bartha@wsj.com)
0553 GMT - U.K. inflation, which is expected to decelerate, should set the tone in bond markets this morning, while oil prices remain in the driving seat, Commerzbank's Hauke Siemssen says in a note. While a renewed rise in Brent oil price to $92 per barrel is driving the bearish market action as strikes between the U.S. and Iran continue and the Houthis are threatening shipping in the Red Sea, "this morning, declining U.K. inflation figures could set a more benign tone," the rates strategist says. U.K. headline and core CPI are expected to have edged lower in June, according to The Wall Street Journal's poll of analysts. (emese.bartha@wsj.com)
0544 GMT - J.P. Morgan takes a wait-and-see position before opting for outright duration in U.S. front-end Treasurys, its strategists say in a note. "With front-end yields remaining near local highs, the Federal Reserve in its blackout period, and labor market data still weeks away, we continue to prefer patience before advocating for outright duration positions at current levels," they write. The two-year U.S. Treasury yield is down 0.8 basis points to 4.252%, not far from a multimonth high of 4.298% hit on July 14, according to Tradeweb data. (emese.bartha@wsj.com)
0535 GMT - The renewed escalation in the Middle East fighting has pushed crude oil to five-week highs. That has seen the U.S. rates market almost fully retrace the dovish repricing that followed last week's softer inflation numbers, says Tony Sycamore, market strategist at IG Markets. Oil's unrelenting rise is increasing the chances of a hawkish Fed surprise next week, he adds. Markets are now pricing in around 50 basis points of Fed rate hikes by April 2027, including a roughly 25% chance of a 25 basis-point increase next week, he says. (james.glynn@wsj.com; @JamesGlynnWSJ)
0535 GMT - U.S. Treasury yields are trading little changed in Asian trade, as investors navigate between higher oil prices and hopes of an end to hostilities between the U.S. and Iran. Investors will also gauge demand at the Treasury's $13 billion auction of 20-year bonds. "Given a higher level of outright yields and less supportive valuations, we think [Wednesday's] auction can be digested smoothly," strategists at J.P. Morgan say in a note. The two-year Treasury yield declines 0.6 basis point to 4.254%, while the 10-year Treasury yield is up 0.2 basis point at 4.629%, according to Tradeweb. (emese.bartha@wsj.com)
0521 GMT - Front-end eurozone rates are expected to remain confined within a range of consistent market expectations of a terminal European Central Bank deposit rate between 2.50% and 2.75%, says Santander CIB's Antonio Garcia Pascual in a note. "As long as oil prices stay within the assumptions of the ECB's mild and baseline scenarios, we expect this range to hold," the global head of economics says. At current levels, Santander CIB again sees an opportunity to open tactical longs in front-end rates, he says. The ECB raised interest rates by 25 bps in June, bringing the deposit rate to 2.25%. It is expected to stay on hold when it announces a monetary policy decision on Thursday. (emese.bartha@wsj.com)
0517 GMT - Franklin Templeton's base case is for the European Central Bank to deliver one final rate hike in September with inflation expected to remain above the ECB's 2% target over the coming quarters, says David Zahn, head of European fixed income, in a note. Thereafter the ECB is expected to remain on hold to assess the impact of the tightening already delivered. However, the ECB remains highly data-dependent, Zahn says. "If renewed tensions in the Gulf were to push energy prices higher and keep inflation above target for longer, policymakers could be forced to consider additional rate hikes." Franklin Templeton expects the ECB to begin easing policy in 2027. The ECB raised interest rates by 25 basis points in June and is expected to stay on hold this week. (emese.bartha@wsj.com)
(END) Dow Jones Newswires
July 22, 2026 01:59 ET (05:59 GMT)
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