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.

2121 ET - The market is pricing a more credible Fed in response to Fed Chairman Warsh's speech last Friday, three members of BofA Global Research say in a research report. "The [U.S.] yield curve flattened on the back of a sharp sell-off at the front end," the members note, citing market pricing of a Fed rate hike in September which is now over 60%. However, given Warsh's comments that the Fed should focus on trends rather than "isolated data points" and that underlying inflation hasn't "meaningfully improved" in recent months, the onus is now on Warsh to deliver a rate hike in September, the members add. (ronnie.harui@wsj.com)

2021 ET - Asian currencies consolidate against the dollar in early trade, but may weaken on growing prospects of Fed rate hikes that typically increase the appeal of U.S. fixed-income assets. Although Fed Chairman Warsh's speech on Friday isn't a "pre-commitment to a Sep hike, it reinforced the Fed's inflation-fighting credibility and kept further tightening in play if inflation fails to ease meaningfully," two strategists at OCBC Group Research say in a research report. "A firmer USD can be a headwind for Asian FX," they add. The dollar is little changed at 159.98 yen and is steady at 1,377.10 won, while the Australian dollar is flat at US$0.7160, LSEG data show. (ronnie.harui@wsj.com)

2014 ET - Japanese stocks decline after Fed Chair Kevin Warsh's speech on Friday increased prospects for U.S. rate increases. Chip-related stocks are leading declines. Advantest falls 7.8%, SoftBank Group is 4.2% lower and Tokyo Electron is down 3.8%. The dollar is at 160.00 yen, up from Y159.48 as of Friday's Tokyo stock market close. Investors are closely watching developments in the Iran war and oil prices after U.S. forces attacked two Iranian rocket launchers in the Strait of Hormuz on Sunday. The Nikkei Stock Average is down 2.2% at 64930.03. (kosaku.narioka@wsj.com; @kosakunarioka)

2009 ET - JGBs edge lower in the early Tokyo session, tracking Friday's price declines in U.S. Treasurys. Both JGBs and Treasurys tend to move in tandem. Fed Chairman Warsh's speech on Friday sparked a shift in U.S. monetary-policy expectations, analysts say. The implied probability of the Fed raising rates by 25 bps at its September meeting climbed to around 59%, up from about 35% just one day earlier, XS.com's Antonio Di Giacomo says in an email. "The move shows that investors are once again seriously considering a scenario in which the Fed may have to tighten monetary conditions further if inflation fails to show more convincing signs of slowing," the senior market analyst adds. The 10-year JGB yield is up 0.5 bps at 2.930%. (ronnie.harui@wsj.com)

2003 ET - The Reserve Bank of New Zealand is on track to deliver a second consecutive interest rates hike in September, taking the official cash rate to 2.75% on Wednesday, says Ben Jarman, economist at JP Morgan. With the policy rate still accommodative, and the data having cleared essentially every hurdle to demonstrate a growth pick-up, a 25bp hike is close to fully-priced, he adds. While business surveys initially stumbled following the oil supply shock, activity measures have since rebounded, he adds. (james.glynn@wsj.com; X @JamesGlynnWSJ)

1944 ET - Japanese stocks may fall after Fed Chair Kevin Warsh's speech on Friday raised expectations for U.S. rate increases. Nikkei futures are down 1.6% at 65480 on the SGX. The dollar is at 160.12 yen, up from Y159.48 as of Friday's Tokyo stock market close. Investors are focusing on government bond yields and developments in the Middle East. The Nikkei Stock Average rose 0.4% to 66405.56 on Friday. (kosaku.narioka@wsj.com)

1851 ET - Australia's One Nation party is celebrating a new electoral victory after its state byelection win in the formerly safe Labor seat of Secret Harbour in Western Australia over the weekend. One Nation's Luke Herdegen claimed the win after voters delivered an 18.6% swing against the Australian Labor Party. While state politics does not always translate into federal voting patterns, the win will nevertheless upset the major parties, which are confronting a significant right wing third force in the country's politics. (james.glynn@wsj.com; X @JamesGlynnWSJ)

(END) Dow Jones Newswires

August 30, 2026 21:21 ET (01:21 GMT)