The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1053 GMT - The U.S.'s plan to control Venezuela's oil industry after capturing President Maduro could have minimal impact on the bonds of major energy companies, CreditSights' Ben Morgan and Charles Johnston say in a note. Venezuela is a relatively minor exporter of crude, offering less than 1% of the global supply in 2025, the analysts say. "We anticipate a limited near-term impact from the [U.S.] invasion on global oil markets and for the largest integrated energy credits." Integrated energy companies are major corporates that produce and market oil, natural gas, and renewable energies. (miriam.mukuru@wsj.com)
1048 GMT - U.S. Treasury yields decline in European midday trade, as investors remain cautious but nor particularly concerned about the U.S.'s capture of Venezuelan President Nicolas Maduro over the weekend. Instead, the focus is more on upcoming data. "Markets could remain cautious ahead of a critical week for monetary policy expectations as new data releases could shape the outlook for both the dollar and interest rates," says Exness' Krisada Yoonaisil in a note. Attention turns to remarks from Federal Reserve members this week and any guidance on the balance between inflation and labor could inject volatility into forex and bond markets, the markets strategist says. The two-year Treasury yield falls 1.6 basis points to 3.460%, while the 10-year yield declines 2 basis points to 4.168%, according to Tradeweb. (emese.bartha@wsj.com)
1032 GMT - The Chinese yuan has scope to rise further after hitting its highest level against the dollar since May 2023 earlier, ING economist Lynn Song says in a note. The People's Bank of China has showed little pushback to the pace of the yuan's appreciation versus the dollar, he says. The narrowing of the U.S.-China yield spread could have further to go this year as interest-rate cuts by the Federal Reserve are likely to outpace PBOC rate cuts, he says. China's strong trade surplus also favors yuan strength. ING lowers its forecast for the dollar-yuan fluctuation band in 2026 downward to 6.85-7.25. The dollar falls 0.1% to 6.9898 yuan after reaching a low of 6.9774 earlier. (renae.dyer@wsj.com)
1029 GMT - Washington's ouster of Venezuelan President Nicolas Maduro may represent a coordinated move to secure ideological and economic hegemony in the western hemisphere, says Charles-Henry Monchau, CIO at Syz Group. Trump appears to be constructing a North-South alliance, a wall of allies stretching from Alaska to Argentina. "If successful, the U.S. won't just be a global superpower; it will have total ideological and economic hegemony over its own backyard for the first time in decades," Monchau says. The move could raise tensions with Brazil. Although it is a BRICS member, Brazil is now almost entirely surrounded by U.S.-allied nations, he says. "Against this shifting tide, will Brazil remain the final holdout for the East in the West?" (don.forbes@wsj.com)
1015 GMT - U.S. energy company Chevron could be the biggest beneficiary if the U.S. government takes control of the Venezuelan oil industry, CreditSights' Ben Morgan and Charles Johnston say in a note. The U.S. said it would have increased control over Venezuelan oil after it arrested the Venezuelan president over the weekend. "Chevron is the only U.S. energy company operating in Venezuela and the company has kept its license to operate throughout 2025," the analysts say. The company could gain from its operations in Venezuela but its management "has publicly favored investments in other regions," such as Guyana, CreditSights analysts say. (miriam.mukuru@wsj.com)
1003 GMT - U.S. military action is not unprecedented and its capture of Venezuelan President Nicolas Maduro is unlikely to reflect a fundamental shift in U.S. foreign policy, Franklin Templeton Institute's Stephen Dover says in a note. Still, the use of force will reinforce the view that many countries will need to boost spending on national security, the chief market strategist says. The weekend's actions alone can't unlock Venezuela's massive crude oil reserves as for that, "durable political stability is necessary," he says. Over the longer run, a more stable, productive, and prosperous Venezuela could offer significant supplies of oil, he says. "That would be significant for global growth, but it will take political stability and considerable investment to unlock that potential." (emese.bartha@wsj.com)
0958 GMT - Inflation is likely to moderate below target levels across South Korea and Taiwan in 2026, driven by weaker energy prices and a softer U.S. dollar, according to Goldman Sachs analysts in a research note. A sustained negative output gap, which happens when demand doesn't meet supply capacity, will further suppress inflation in Korea, GS says. In Taiwan, inflation is likely to remain muted despite a positive output gap, they note. Some tech companies are driving the recent surge in production through increased productivity, GS notes. (tracy.qu@wsj.com)
0957 GMT - The euro falls to a two-and-a-half-month low versus sterling and trades near a four-week low against the dollar following a U.S. military operation to capture Venezuela President Nicolas Maduro. The euro's greater sensitivity to trade disruptions weighs on the single currency versus sterling while its fall against the dollar reflects increased demand for safe havens, Monex Europe analysts say in a note. For the euro-dollar, the dollar should continue driving moves this week given a U.S.-heavy data calendar, they say. The U.S. ISM manufacturing report is at 1500 GMT and U.S. nonfarm payrolls data are due Friday. The euro falls 0.2% to a low of 0.8691 pounds and drops 0.4% against the dollar to $1.1677, near the low of $1.1670 reached overnight. (renae.dyer@wsj.com)
0953 GMT - The dollar rises on safe-haven demand after the U.S. ousted Venezuela President Nicolas Maduro over the weekend, but those gains could quickly fade as the event's impact is limited, eToro's Lale Akoner says. "The U.S. dollar will see a brief safe-haven bid on initial Venezuela headlines, but gains are expected to quickly fade as volatility comes down," the global market analyst says. "With Venezuela's global economic role small and the operation swiftly executed, there's little reason for sustained dollar strength." The outlook for U.S. interest rates and for global growth remain far more influential for the dollar, she says. The DXY dollar index rises 0.3% to 98.747 after hitting a near four-week high of 98.796 overnight. (jessica.fleetham@wsj.com)
0936 GMT - The cost of default protection for euro credit are steady at relatively low levels as markets stay calm after the U.S. arrested Venezuelan president over the weekend. "The market will mainly be processing the consequences of the attack on Venezuela," Rabobank's Bas van Geffen says in a note. The iTraxx Europe Main index of euro investment-grade credit default swaps is unchanged at 50 basis points, S&P Global Market Intelligence data show. The iTraxx Europe Crossover index of euro high-yield CDS declines 2bps to 242bps. (miriam.mukuru@wsj.com)
0930 GMT - Sterling falls against a stronger dollar but rises to a two-and-a-half-month high versus the euro after the U.S. ousted Venezuela President Nicolas Maduro. The dollar is lifted by safe-haven demand on geopolitical tensions in Venezuela as well as Iran, Monex Europe analysts say in a note. The euro's greater sensitivity to trade disruptions is favoring sterling outperformance against the single currency, although this could prove temporary, they say. "We enter 2026 seeing domestic political conditions in the U.K. still unfavorable for growth and the pound." In contrast, the euro could benefit from eurozone fiscal policy boosting growth, they say. Sterling falls 0.2% against the dollar to $1.3425. The euro falls to a low of 0.8695 pounds, LSEG data show. (renae.dyer@wsj.com)
0924 GMT - There is a risk that President Trump's removal of Venezuela's Nicolas Maduro could be cited as justification for a hypothetical future move by Mainland China against Taiwan's leadership, BMI says in a note.In the event of an attack, Beijing could point to Trump's action as a precedent to deflect international criticism, BMI says. China has sought to gain control of Taiwan for decades, and this remains a geopolitical priority, it says. Trump's military operation against Maduro highlights his high tolerance for risk-taking, while a more assertive U.S. foreign policy is likely to heighten geopolitical risk this year, BMI adds. That said, China is likely to avoid a full-scale conflict with Taiwan for the foreseeable future, given the risk of becoming embroiled in a prolonged war with heavy casualties, BMI writes. (kimberley.kao@wsj.com)
(END) Dow Jones Newswires
January 05, 2026 05:53 ET (10:53 GMT)
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