Global Forex and Fixed Income Roundup: Market Talk

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

0953 ET - A continued sharp rise in Treasury yields would potentially have negative dollar implications, Rabobank's Jane Foley says in a note. The Treasury market is suffering from concerns over the U.S. budget deficit, higher inflation and competition from corporate borrowing. Further pressure on Treasurys could test their safe-haven status, she says. The dollar's dominance in global payments means it should retain its own safe-haven status. However, a global shift away from the dollar could slowly erode its dominance in coming decades, she says. "This process would likely accelerate if the Treasury market's safe haven status becomes less anchored." The DXY dollar index trades flat at 99.607. Thirty-year Treasury yields hit a 19-year high of 5.337%, Tradeweb data show. (renae.dyer@wsj.com)

0951 ET - A total of 71% of investors don't expect AI-linked capital expenditure to be cut in 2026, the Bank of America global fund manager survey for August shows. This is an increase from July when 61% of investors said they don't expect a cut in AI spending. By contrast, 21% of investors expect a cut in AI expenditure. (miriam.mukuru@wsj.com)

0941 ET - If there is a Democratic sweep in the U.S. midterm elections, where the Democrats have a majority in both the House and the Senate, most investors expect bond yields would rise and stocks would fall, according to Bank of America's August global fund manager survey. A total of 37% of fund managers surveyed expressed this view. Another 17% expect bond yields would fall and stocks rise, while 16% expect both bond yields and stocks would fall, the survey says. The survey showed that a majority of 47% of investors surveyed anticipate a split Democratic House and Republican Senate, while expectations for a Democratic sweep fell to 23% from 27%. (emese.bartha@wsj.com)

0911 ET - Investors have reasons to worry about inflation, but it may not be the main driver of rising bond yields. In fact, inflation expectations as measured by breakeven rates are fairly close to the Fed's 2% target in the long run. "Investors can believe inflation will average roughly 2-2.5% over the long run while simultaneously becoming less certain about that forecast because of oil, tariffs, fiscal policy and other supply shocks," Capital.com's Daniela Hathorn says in an email. The bond selloff is driven by "a combination of persistent inflation risks, heavy government borrowing and growing competition for capital rather than simply a sharp rise in expected inflation itself," she says. (paulo.trevisani@wsj.com; @ptrevisani)

0901 ET - A global bond selloff gains momentum, sending Treasury yields higher, as markets worry about government debt and higher bond supply amid a hot race to finance data-center construction. "A government paying more than $1 trillion a year just to service debt, with a fresh wave of long-dated issuance still to come, is a government whose bond buyers get to set the terms," deVere's Nigel Green writes in a note. Tensions in the Middle East keep oil prices elevated, fueling inflation fears. The 30-year Treasury yield reaches 5.318%, the highest since 2007. The 10-year rises to 4.738% from yesterday's settle of 4.725%. The two-year increases to 4.196% from 4.182%. (paulo.trevisani@wsj.com; @ptrevisani)

0856 ET - The sharp increase in U.S. Treasury yields, with 30-year yields hitting their highest since 2007, comes despite recent weaker economic data reducing expectations for an imminent Federal Reserve interest-rate hike, capital.com's Daniela Hathorn says in a note. Long-dated yields are rising due to risks of persistent inflation as the Middle East conflict raises energy prices. Additionally, heavy government borrowing and growing competition for capital--including debt issuance associated with the AI investment boom--are lifting longer-term borrowing costs, the senior market analyst says. Continued disruption in the Red Sea represents yet more uncertainty, Hathorn says. Thirty-year Treasury yields hit a high of 5.337%, Tradeweb data show. Ten-year yields hit a 19-month high of 4.748%. (emese.bartha@wsj.com)

0848 ET - The rise in energy prices stemming from the Iran war poses a headwind to eurozone growth and the euro, MUFG Bank's Derek Halpenny says in a note. Europe faces a terms of trade hit from a further surge in energy prices, particularly natural gas prices, he says. Europe delayed winter gas purchases after the onset of the war and this appears to be backfiring, he says. Drought across Europe is also affecting food production and boosting energy demand. MUFG estimates that the euro is currently about 2.5%-3.0% overvalued versus the dollar. The euro could underperform if the above factors start to impact sentiment and economic activity, Halpenny says. The euro last trades steady at $1.1574. (renae.dyer@wsj.com)

0835 ET - Bitcoin trades modestly lower along with U.S. stock futures as the prospect of a deal to end the Iran war dims. President Trump said he wouldn't seek an extension of the 60-day truce between the U.S. and Iran, which expired Monday, and threatened to bomb Oman. Markets are showing a more cautious tone as investors contend with rising long-term bond yields, renewed geopolitical uncertainty and some fresh nervousness around AI-related stocks, Capital.com analyst Daniela Hathorn says in a note. Bitcoin falls 0.1% to $64,274, LSEG data show. (renae.dyer@wsj.com)

0816 ET - The 30-year U.S. Treasury yield is on track for its highest settle since June 2007, while French and German long-dated yields surge and Japan's 30-year yield is near an all-time high. Yardeni Research says it may be time to worry about Bond Vigilantes--a term coined by the firm's president, Ed Yardeni, back in the 1980s to describe bond market investors who sell government bonds usually in protest of policies they believe are inflationary. In addition to government debt, the vigilantes are also concerned about the increase in hyperscalers' borrowings, the firm says. But Yardeni isn't pushing the panic button just yet. "For now, we are sticking with our view that the US bond yield should continue to trade in a normal range of 4.00%-5.00%, without causing any adverse consequences for the economy and corporate earnings," the firm says. (patrick.sheridan@wsj.com)

0800 ET - The most recent U.K. jobs-market data will keep Bank of England policymakers happy holding interest rates, Pantheon Macroeconomics' Rob Wood says in a note. "The slightly weaker jobs picture than expected suggests the labor market is still easing, but only very gradually now," he says. Wage growth sits in a comfortably inflation-target-consistent range but will likely slow little further, and may accelerate a little in the coming months, Wood says. Private sector ex-bonus pay recorded its largest month-to-month gain since December, at 4.8%, he notes. All in all, the data provides small dovish jobs and pay surprises, but the big picture is the labor market is easing only very gradually, if at all, he adds. (edward.frankl@wsj.com)

0750 ET - AI-linked capital expenditure by big companies that manage data centers, or hyperscalers, is the most likely source of a global credit crisis, according to 38% of investors in the Bank of America global fund manager survey. The second most likely source of a credit event is private credit, ranked by 23% of respondents in the survey. (miriam.mukuru@wsj.com)

0735 ET - U.K. jobs data reduces the likelihood of a Bank of England interest-rate hike in September, given that labor-market conditions look set to help rather than hinder the fight against inflation by restraining pay growth, accountants lobby group ICAEW says. "The U.K. labor market remains stuck in a low-churn limbo, with employers reluctant to hire, fire or offer bigger pay rises as they grapple with rising costs, intensifying global headwinds and heightened policy uncertainty," ICAEW's chief economist Suren Thiru says. Falling vacancies suggest labor demand is shrinking, while speculation over the government budget in the fall could damp employers' appetite to hire, he adds. Unemployment held steady at 4.9%, while private-sector earnings fell to 2.8% in the three months through June, the data showed. (edward.frankl@wsj.com)

(END) Dow Jones Newswires

August 18, 2026 09:53 ET (13:53 GMT)