The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.

0726 GMT - The euro rises ahead of the European Central Bank's policy decision later in the day. The ECB is largely expected to keep rates on hold when it announces its decision at 1215 GMT but markets are pricing in an 84% chance of a 25 basis-point rate rise in September, LSEG data show. Investors will be keen to hear the ECB's response to the renewed rise in oil prices stemming from the escalation in the U.S.-Iran conflict. The ECB is likely to cement the prospect of a rate rise in September, although the euro is unlikely to benefit much since this is largely priced in, Commerzbank's Antje Praefcke says in a note. The euro rises 0.2% to $1.1427. (renae.dyer@wsj.com)

0718 GMT - Yields on 10-year U.K. government bonds, or gilts, rise to a two-month high as soaring oil prices raise inflation risk and increase the possibility of the Bank of England increasing interest rates in 2026. "The latest rise in energy prices led to fresh concerns about a more prolonged stagflationary shock, with investors pricing in more inflation as a result," Deutsche Bank Research strategists say in a note. Ten-year gilt yields climb 3.8 basis points to a high of 5.080%, Tradeweb data show. (miriam.mukuru@wsj.com)

0717 GMT - Eurozone government bond yields edge higher in opening trade as oil prices rise due to continued Middle East conflict while investors await a European Central Bank's policy decision later in the day. The ECB is expected to leave interest rates on hold, but markets will watch for any comments on the potential impact of recent oil-price rises and the prospects for further rate increases in the coming months. "Markets will be very attentive to clues for September, which features updated forecasts," analysts at KBC Bank say in a note. The 10-year Bund yield rises 0.9 basis points to 3.187%, according to LSEG data. The magnitude of the rise is broadly in line with that of U.S. Treasury yields. (emese.bartha@wsj.com)

0713 GMT - The Monetary Authority of Singapore is likely to deliver a "hawkish" pause of monetary-policy tightening on Monday, two economists at BofA Global Research say in commentary. Data released earlier showed Singapore's core inflation stood at 1.6% in June, between forecasts of BofA and consensus, and only slightly firmer than May's reading, the economists note. "Commentary in the CPI outlook was almost identical to last month, barring updates to latest global energy price trends given recent developments," the economists say. The MAS will probably tighten monetary policy by steepening the slope of the Singapore dollar nominal effective exchange rate's band by 50 bps to 1.5% in October, the economists add. (ronnie.harui@wsj.com)

0654 GMT - The dollar eases in the absence of fresh catalysts to propel the currency higher. In a quiet week of U.S. economic data, investors are looking ahead to the Federal Reserve's policy decision on July 29 for any hints on whether the central bank could raise interest rates this year. The Fed is widely expected to leave rates unchanged Wednesday but the market is fully pricing in a rate rise by September as oil prices rally on the recent escalation in the U.S.-Iran conflict. The DXY dollar index falls 0.1% to 101.009, having reached a one-week high of 101.210 Tuesday.(renae.dyer@wsj.com)

0602 GMT - Eurozone government bond markets may be relieved on Thursday as the European Central Bank is set to remain on hold and President Christine Lagarde not pre-committing to a September rate hike, Commerzbank's Rainer Guntermann says in a note. Money markets expect the ECB to keep interest rates on hold Thursday, according to LSEG. Lagarde, however, will probably open the door for a rate hike in September, the rates strategist says. "Year-to-date highs in 10-year Bund yields close to 3.2% should provide support, with tomorrow's PMIs likely reminding markets about the challenging growth backdrop," Guntermann says. He adds that the latest dynamics in energy prices add spice to the outlook for interest rates. (emese.bartha@wsj.com)

0555 GMT - There is increasing focus on the outright level for government bond yields, such as the 30-year U.S. Treasury yield, Danske Bank's Kristoffer Kjaer Lomholt says in a note. The 30-year Treasury yield is trading above 5% "and this is becoming more persistent," the director in fixed income and FX research says. The escalation of the war in the Middle East, where the Houthis hit two Saudi oil tankers in the Red Sea, and the subsequent rise in the oil price with Brent approaching $100 per barrel, is adding pressure on inflation ahead of next week's Federal Reserve FOMC meeting, he says. The 30-year Treasury yield trades 0.2 basis points higher at 5.149%, near a two-month high, according to Tradeweb. (emese.bartha@wsj.com)

0547 GMT - The recent escalation in the Arabic Gulf region and rising energy prices are developments that are unlikely to please central bankers, Helaba analysts say ahead of the European Central Bank's monetary policy decision later in the day. "Nevertheless, there are no clear indications of an imminent interest rate hike," the analysts say, waiting for any signals whether a rate increase at the following meeting in September will be signaled. Money markets currently price in a 21bps ECB rate hike in September, according to LSEG. The wording of the ECB statement-indicating that the Council does not commit to a specific interest rate path in advance-is unlikely to change significantly, according to Helaba analysts who expect the ECB to keep decision-making on a meeting-by-meeting basis. (emese.bartha@wsj.com)

0535 GMT - U.S. Treasury yields across maturities are trading at or near multimonth highs in Asian trade, only marginally higher on the day, as oil prices continue rising. The two-year Treasury yield rose to 4.309% before edging back to 4.307%, staying close to Wednesday's 4.311%, the highest level since February 2025, according to Tradeweb. The 10-year Treasury yield matched Wednesday's two-month high of 4.665% before retreating to 4.659%; and the 30-year yield is just off Wednesday's two-month high of 5.154%, last trading at 5.150%. (emese.bartha@wsj.com)

0515 GMT - Within euro fixed income markets, ​the two- to five-year segment currently offers the most compelling risk-reward profile​, Carmignac's Kevin Thozet says in a note. Markets are currently pricing in more than two rate hikes over the next 12 months, taking the ECB's policy rate to 2.75%, followed by an almost indefinite stay at that level, the member of the investment committee says. "This path looks too hawkish relative to the likely neutral rate." If the ECB's eventual policy rate is closer to 2%, current market pricing leaves room for a meaningful downward repricing of rate expectations, he says. Against this backdrop, the intermediate segment stands out as the sweet spot, combining attractive carry, supportive valuations and the greatest potential to benefit from a more dovish policy path, Thozet says. (emese.bartha@wsj.com)

0514 GMT - The main opportunity in European fixed income lies in the attractiveness of the very steep yield curve, Neuberger's Patrick Barbe says in a note. This offers high carry returns on long-dated bonds relative to the moderate domestic inflation risk in the eurozone,the European fixed income head says. The European Central Bank's preemptive policy doesn't alter the return outlook for eurozone bonds, "which is is driven by the eurozone's internal fundamentals-characterized by weak economic activity, particularly in terms ofinvestment spending," he says. "In reality, this restrictive policy exacerbates the weakness in investment." (emese.bartha@wsj.com)

(END) Dow Jones Newswires

July 23, 2026 03:26 ET (07:26 GMT)

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