The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0234 GMT - News of stronger than expected Australian employment growth in June has seen interest rate markets increase bets that the Reserve Bank of Australia will raise interest rates in August. The market started the day pricing in a 25% chance of a hike at the August policy meeting, with an 80% chance of hikes over the remainder of 2026. Post the jobs data report, those probabilities have moved higher to 33% and 95% respectively. Tony Sycamore, market strategist at IG, says the RBA will be worried about a tightening job market at a time when inflation is already elevated. (james.glynn@wsj.com; X @JamesGlynnWSJ)
0225 GMT - Bank Indonesia's policy priority seems to be supporting the Indonesian rupiah's stability. While the central bank kept rates unchanged on Wednesday, it broadened incentives to attract foreign inflows and support the rupiah's stability, Goldman Sachs analysts say in a report. The U.S. bank still expects Bank Indonesia to raise its policy rate by 25 bps each in 3Q and 4Q, bringing the rate to 6.25% by end-2026. (ronnie.harui@wsj.com)
0221 GMT - HSBC retains its "mildly bearish" view on Japanese government bonds. "Much of the focus in Japan rates has centered on the prime minister and finance minister's statements, which suggest that the government is looking for ways to encourage pension funds and retail investors to buy more JGBs," says Justin Heng, an APAC rates strategist. However, measures such as revising the Government Pension Investment Fund's "strategic asset allocation likely require some time for coordination and approvals," Heng says. These changes would probably arrive in 2027 at the earliest, the strategist says. "Our base case remains for higher yields in the near-term," Heng adds. The 10-year JGB yield is 3 bps higher at 2.765%. (ronnie.harui@wsj.com)
0212 GMT - South Korea's July inflation expectations data due next week and consumer price data in early August will likely be key to whether the central bank delivers a back-to-back rate hike in August, ANZ's Krystal Tan says. "If these point to stronger pass-through and rising inflation expectations, the case for an August hike will strengthen," the economist writes in a note. August appears to remain a close call, though stronger-than-expected 2Q gross domestic product growth raises the odds of a back-to-back rate hike, Tan notes. Attention now turns to whether price pressures become more persistent and broad-based, she adds. (kwanwoo.jun@wsj.com)
0143 GMT - Energy supply risks are in focus as U.S.-Iran tensions intensify, MUFG Bank's Lloyd Chan says in a research report. The senior currency analyst cites latest developments such as President Trump's warning that the U.S. would target Iranian bridges and power infrastructure if Iran attacks vessels transiting the Strait of Hormuz. "Key market risk is whether the conflict shifts from a phase of renewed escalation to one that triggers a broader global energy shock," the analyst says. Disruptions to oil shipments from the Gulf, together with rising U.S. Treasury yields, will probably weigh on Asian currencies, Chan adds. The dollar is little changed at 61.721 Philippine pesos and is flat at 33.75 baht, LSEG data show. (ronnie.harui@wsj.com)
0135 GMT - Bank of Japan Gov. Kazuo Ueda is expected to reiterate his stance of seeking further interest-rate hikes at his press conference next week, but that is unlikely to reverse the yen's weak momentum, says Mizuho Securities economist Yusuke Matsuo. "Markets have already largely priced in BOJ rate hikes at a pace of once every six months, making it difficult to drive the yen significantly higher through such communication alone," he says. "Given market expectations for clear guidance on the timing and pace of the next rate hike, any stance interpreted as dovish risks fueling further yen weakness in an environment where the dollar remains broadly strong." The BOJ is widely expected to keep the policy rate at 1% next week as it gauges the impact of its previous hike. (megumi.fujikawa@wsj.com)
0124 GMT - South Korea's stronger-than-expected 2Q gross domestic product could bolster the case for a faster pace of Bank of Korea rate increases, though it may not be enough to justify a back-to-back hike in August, Barclays' Bum Ki Son says. Higher 2Q gross domestic income--alongside the above-consensus GDP growth--"ticks the first box" but still "leaves the glass only half full" for an August hike, the economist writes in a note. The more important question is how much corporate earnings will spill over into household income and consumption. Historically, the spillover to household income has been limited in South Korea, he adds. (kwanwoo.jun@wsj.com)
0119 GMT - Indonesia's central bank is likely to deliver another 25 bps rate hike in 3Q, bringing its benchmark rate to 6.00% by the year-end, RHB economist Wong Xian Yong says in a note. He views July's decision to keep rates unchanged as a tactical pause rather than the end of the tightening cycle. Future policy decisions are expected to be driven primarily by rupiah stability rather than domestic macroeconomic conditions alone, he reckons. A sustained rupiah above 18,000 versus the dollar, renewed foreign portfolio outflows and higher U.S. Treasury yields could prompt further tightening, while contained inflation and moderating growth could allow the central bank to remain on hold, he adds. (yingxian.wong@wsj.com)
0058 GMT - Bank Indonesia is still expected to raise interest rates by another 50 bps to 6.25% by the year-end, with the rupiah under pressure due to domestic policy concerns and renewed U.S.-Iran tensions, BMI says in a note. It expects persistent currency weakness despite recent intervention measures and policy tightening. Higher oil prices could widen Indonesia's import bill and fuel fiscal concerns, while lingering governance and policy uncertainty may continue to weigh on investor sentiment, it says. However, Indonesia's pro-growth stance is expected to limit the extent of further rate increases, BMI adds. (yingxian.wong@wsj.com)
0029 GMT - Japanese stocks are higher in early trade, driven by hopes for growing demand related to artificial intelligence, despite continued uncertainty over the Iran conflict. Chip stocks are leading the gains. Renesas Electronics is up 2.5% and Lasertec is 6.5% higher. As the AI build-out continues, Alphabet increased its estimate for this year's capital expenditures by $15 billion. The dollar is at 163.11 yen, compared with Y163.10 as of Wednesday's Tokyo stock market close. Investors are closely watching developments in the Middle East and crude oil prices after President Trump threatened to destroy Iranian infrastructure if Iran attacks vessels transiting the Strait of Hormuz. The Nikkei Stock Average is up 0.6% at 66519.40. (kosaku.narioka@wsj.com; @kosakunarioka)
0027 GMT - Economists expect Australia's unemployment rate to remain at 4.4% in June, with the economy adding 20,000 jobs over the month. Still, there are cracks starting to appear in what has been a fairly resilient job market, so any evidence of weakness will be the focus of traders. Increasingly, expectations for further interest rate increases by the Reserve Bank of Australia are fading as inflation pressures cool somewhat. Still, the Middle East war is looks set to continue impacting the economy through falling confidence and the potential for another wave of fuel price pressures. (james.glynn@wsj.com; X @JamesGlynnWSJ)
0021 GMT - The yen consolidates against other G-10 and Asian currencies, but may be supported by a media report that the BOJ is open to a faster pace of rate hikes, analysts say. "The report cited JPY weakness as an upside inflation risk," CBA's Joseph Capurso says in a research note. "Markets now place an 84% chance of a BOJ hike in October, up from 72% before the report," says the head of Foreign Exchange, International & Geoeconomics. The BOJ's post-meeting conference could be an important driver of yen strength next week if Gov. Ueda "flags the risk of an increase in the policy interest rate soon," Capurso adds. The dollar is little changed at 163.10 yen and the euro is flat at 186.12 yen, LSEG data show. (ronnie.harui@wsj.com)
(END) Dow Jones Newswires
July 22, 2026 22:34 ET (02:34 GMT)
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