The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1029 GMT - The Swedish krona could appreciate significantly against the Norwegian krone on any agreement to open the Strait of Hormuz, Commerzbank's Michael Pfister says in a note. The Norwegian krone is more affected by falling oil prices as a major energy producer than the Swedish krona is affected by rising prices, given Sweden's relatively low dependence on energy imports. If the Strait opens sustainably, the Norwegian krone will be hit by falling oil prices and the pricing out of interest-rate rise expectations, he says. For the Swedish krona, falling oil prices should offset the correction in rate expectations, he says. The Norwegian krone rises 0.1% to 0.9970 Swedish krona after reaching a 25-day low of 0.9848 overnight, LSEG data show. (renae.dyer@wsj.com)
1027 GMT - The U.K. economy performed strongly in the first half of 2026, though it faces a slowdown before the end of the year, Davy Research economist Kevin Timoney says. GDP data due Thursday could show a marginal on-month decline in June, though there has yet to be much of a negative correction following a strong uplift in March, he says. That pickup was likely driven by frontloading ahead of expected price increases due to the war in the Middle East. That leads to consensus expectations consistent with annualized first-half GDP growth of nearly 1.7%. However, activity in the second half has been considerably weaker than the first in recent years, Timoney says. He expects overall growth in 2026 of 0.9%. (edward.frankl@wsj.com)
1026 GMT - Issuance of new large-volume corporate debt--known as 'jumbo' debt--has increased sharply in 2026, continuing the trend from 2025, Goldman Sachs credit strategists say in a note. 'Jumbo' debt is an issuance valued at $10 billion or more at the time of announcement, the strategists say. In addition, the average tenor of tech sector debt is roughly 3.5 years longer than the broader U.S. investment-grade market, they say. "Technology has generated 60% of jumbo deals so far this year, and more than 20% of all U.S. dollar investment-grade new issue activity." These trends are expected to continue in the next few years, the strategists say. (miriam.mukuru@wsj.com)
1019 GMT - Oil-price volatility is the main driver of U.K. government bonds, or gilts, currently, ING's Michiel Tukker and Benjamin Schroeder say in a note. Gilt yields remain too high, the highest among developed market peers, making them attractive, the strategists say. Given the U.K.'s weak economic growth relative to the U.S., markets could lower their expectations for interest-rate rises from the Bank of England, causing gilt yields to fall, they say. However, investors need to be wary because further rises in oil prices could complicate the interest-rate outlook. "Any move in oil prices can quickly turn any dovish position [in gilts] into a loss." Ten-year gilt yields climb 0.6 basis points to 4.927%, Tradeweb data show. (miriam.mukuru@wsj.com)
1019 GMT - Increases in German industrial production and services turnover in June point to an upward revision to second-quarter GDP, despite the energy shock and trade uncertainty, Pantheon Macroeconomics' Melanie Debono says in a note. "We look for a 0.1 percentage point upward revision, to 0.3% quarter-to-quarter, signaling a smaller slowdown from the 0.4% increase in GDP in 1Q," she says. Industrial output rose 0.2% in June, after increasing 0.7% in May, meaning German industry fared better than other major eurozone nations, Debono says. Services turnover, which jumped for a second straight month in May, also suggest an upward revision to 2Q. Looking ahead, business surveys are optimistic on Germany's economic outlook into 3Q, helped by the government's announced reforms, she says. (edward.frankl@wsj.com)
1016 GMT - China's imports may find some support in consumption-related sectors, according to BNP Paribas's William Bratton in a research note. "Non-production-related imports appear to be accelerating and this may suggest something of a pick-up in the country's more consumption-related imports," the head of cash equity research for APAC says. This pick-up in imports may be a function of the recent Chinese yuan strength, but it may also reflect improved underlying domestic demand, Bratton says. Investors will closely watch consumption-sector earnings and other economic data for clues on consumption strength. (tracy.qu@wsj.com)
1013 GMT - The cost of insuring euro-denominated credit against default remains unchanged given high uncertainty around the Middle East conflict. Over the weekend, Iran announced fresh demands, including compensation from the U.S. for war damage, before signing a deal. The announcement raised uncertainty around a potential resolution to the conflict. The iTraxx Europe Crossover index of euro high-yield credit default swaps is steady at 249 basis points, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)
0925 GMT - Investors await the first estimate of U.K.'s second quarter GDP data due to be released on Thursday. "The data matter because the U.K. activity backdrop has softened, with May and June PMIs both in contractionary territory, while fiscal concerns remain very much in the background," Mizuho's Evelyne Gomez-Liechti says in a note. A weaker-than-expected reading could reduce the prospects of Bank of England rate rises in the coming months and cause gilt yields to fall, Gomez-Liechti says. However, stronger-than-forecast data could keep rate hike expectations elevated. Markets price in a total of 24 basis points of BOE rate rises in 2026, LSEG data show. (miriam.mukuru@wsj.com)
0912 GMT - China's July trade data may be showing early signs of a recovery in domestic demand, BNP Paribas' William Bratton says in a note. Surging exports and rising imports suggest the country's production-oriented export engine remains robust, with foreign revenue growth likely to remain a key driver of production. However, accelerating non-production-related imports could point to a pickup in consumption-related imports. While this may partly reflect the yuan's recent strength, it could also signal improving underlying domestic demand. "If so, this is a positive for those looking for a reason to tilt more towards the consumption-related sectors," Bratton adds. BNP Paribas is taking a wait-and-see approach pending more conclusive evidence.(jason.chau@wsj.com)
0849 GMT - Acting Bank Indonesia Gov. Destry Damayanti's nomination as the sole candidate for governor could signal policy continuity, with the central bank likely to remain focused on rupiah stability and inflation control while supporting growth where space permits, CIMB analysts say in a note. Her nomination is viewed as market-friendly and could provide near-term support for the rupiah, they say. Parliamentary approval could be smooth, with lawmakers set to reconvene on Friday alongside the 2027 State Budget presentation, they note. The budget will be a key rupiah catalyst, which could provide greater clarity on the government's fiscal stance and financing strategy. However, external factors, including U.S. rate expectations, the dollar's trajectory and oil prices, are likely to remain the dominant drivers of the currency in 2H, they add. (yingxian.wong@wsj.com)
0844 GMT - The Middle East conflict will remain a key swing factor for PPI and energy components of CPI, says HSBC Global Research analysts in a note. China's July inflation data suggest earlier price increases are losing momentum, they add. Lower global oil prices in early July were the main driver, particularly given the domestic survey collection window and the lag with which global price changes fed through to domestic activity, they say. The detailed data breakdown continued to point to K-shaped domestic growth, underscoring the need to accelerate implementation of existing policy package to strengthen domestic demand, they add. The on-year increase in PPI will gradually ease over the rest of the year and the main support for PPI may shift from the petrochemical chain to the electronics chain, they say. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0843 GMT - Investors continue to look inclined to rebuild bets on a weaker Japanese yen after the recent joint U.S.-Japanese intervention to shore up the currency, ING's Francesco Pesole says in a note. Neither the risk of further interventions or growing confidence in a September Bank of Japan interest-rate rise appear sufficient to counter that trend, he says. The dollar could rise back to 160.00 yen even if the BOJ lifts rates and the Federal Reserve holds rates steady in September, he says. The dollar rises 0.5% to an 11-day high of 158.58 yen, LSEG data show.
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