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.

0526 GMT - For his second monetary policy committee meeting, Federal Reserve Chairman Kevin Warsh won't challenge the consensus, Natixis Investment Managers' Mabrouk Chetouane says in a note. Warsh "will not give in to the temptation to raise the Fed funds rate by 25 basis points, even though, at this stage, bringing inflation back to target by the end of the year is virtually out of reach," the head of global market strategy says. "Furthermore, the Fed chair will not want to risk jeopardizing the slow but steady improvement in the labor market--which has been evident for several weeks--by tightening monetary conditions." Analysts widely expect the Fed to stay on hold Wednesday but money markets price in a 38% probability of a hike, according to LSEG. (emese.bartha@wsj.com)

0519 GMT - The pressure on Federal Reserve policymakers to tighten policy has increased, as U.S. inflation is still significantly above target, and the economy and the labor market remain resilient, Columbia Threadneedle Investments' Anthony Willis says in a note. "However, policymakers may be willing to look through the recent spike in oil prices, until the inflationary implications become clearer." Nevertheless, the broader direction of travel is evident: the Fed is adopting a more hawkish stance under Warsh's leadership, the senior economist says. Markets are currently pricing in a 38% probability that the Fed will raise interest rates on Wednesday, and are fully pricing in a rate hike in September, according to LSEG. (emese.bartha@wsj.com)

0517 GMT - Market pricing of a Federal Reserve interest-rate increase on Wednesday is rising, according to LSEG data. Markets currently assigning a 38% probability that the Fed will decide to tighten monetary policy, up from around 31.5% on Monday. That said, analysts--in contrast to market pricing--expect the Fed to stay on hold this week. Money markets fully price in a Fed rate hike in September, according to LSEG. (emese.bartha@wsj.com)

0503 GMT - The Australian dollar fell around 0.3% in Asian trading following comments from the Reserve Bank of Australia's Governor Michele Bullock, says Kristina Clifton, currency strategist at CBA. Bullock left the door open for further interest rate hikes if needed, but she also noted the economy was slowing as expected and that it would take time for the full impact of earlier interest rate hikes to emerge, she says. On balance, the market assessed Bullock's comments imply the RBA is less likely to raise interest rates in the near term. Markets are currently pricing around a 19% chance of an August interest rate hike, compared to around a 32% chance before the speech, Clifton says. (james.glynn@wsj.com; X @JamesGlynnWSJ)

(END) Dow Jones Newswires

July 28, 2026 01:26 ET (05:26 GMT)