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.

0613 GMT - Long-end government bond yields face challenges to move significantly lower given budget deficit issues, says Jefferies' Mohit Kumar in a note. "Even if oil prices move lower, we do not think that long end rates could rally significantly," the global economist says. The deficit picture, particularly in Europe, is concerning, especially considering the upcoming budget discussions in the fourth quarter and elections in various countries next year, he says. "With central banks not delivering on forwards (our view) and deficits still a concern, macro fundamentals would argue for a steeper curve," Kumar says. (emese.bartha@wsj.com)

0601 GMT - Germany and Italy line up for government bond sales on Tuesday, with the former conducting an auction and the latter launching a new green bond via syndication. The German Finance Agency will auction 5 billion euros in October 2031-dated federal notes, known as Bobl, while Italy will syndicate a new October 2038-dated green BTP. Rates strategists at Commerzbank estimate the issue size of the new BTP at 6 billion euros. (emese.bartha@wsj.com)

0556 GMT - Malaysia's Budget 2027 could be mildly positive for equities, balancing fiscal consolidation with targeted support for households, businesses and investment, CIMB Securities analyst Ivy Ng Lee Fang says in a note. The fiscal deficit could narrow to 3.4% of GDP in 2027 from 3.5% in 2026, while development spending is expected at 83 billion ringgit, she reckons. The budget could have a more sector and stock-specific impact rather than trigger a broad market re-rating, she says. Higher cash aid, tax relief for middle-income households and possible sales-tax relief could support consumption and margins. Consumer and construction stocks may benefit, while higher minimum wages, carbon and electric-vehicle levies could create sector-specific headwinds, she adds. (yingxian.wong@wsj.com)

0550 GMT - Global bond markets are likely to focus on the prospect of diplomatic progress between the U.S. and Iran at the UN meeting in New York with President Trump's speech on the agenda. Trump has signaled readiness to meet Iranian President Masoud Pezeshkian. The recent fall in oil prices helped bond yields decline. Brent is higher on Tuesday and was last up 1.4% at $101.75 per barrel. On Monday, the 10-year U.S. Treasury yield closed at 4.949%, while the 10-year German Bund yield ended at 3.455%, according to LSEG. (emese.bartha@wsj.com)

0535 GMT - The 10-year French OAT-German Bund yield spread widened to more than 100 basis points last week, making French bonds increasingly attractive, TD Securities' Pooja Kumra says in a note. "OAT spreads remain the talk of the town, with the 10-year OAT-Bund spread moving above 100bps," says the senior European and U.K. rates strategist. "French assets face a double whammy from oil volatility and budget uncertainty," she says. Despite the selloff, OAT valuations are becoming increasingly attractive, with limited near-term rating downgrade risk and limited exposure of non-European holders in OATs, she says. (emese.bartha@wsj.com)

0525 GMT - The U.S. Treasury's auction of two-year notes on Tuesday might face headwinds, making concessions necessary for a solid takedown, J.P. Morgan strategists say in a note. "Overall, while we are sensitive to the high level of outright yields, we ultimately think the macro backdrop will weigh on the supply process, and the auction will likely require more of a concession in order to be digested smoothly," they say. The Treasury will auction $69 billion of two-year notes. (emese.bartha@wsj.com)

0523 GMT - A torrent of communications from the Reserve Bank of Australia over the last month is now ending as it heads into a blackout period ahead of next week's policy meeting. There should be little doubt that the RBA will raise interest rates and keep the door open for another rate hike in November. RBA officials always appeared tentative about keeping interest rates on hold in August, and since then the message from the war in the Middle East and two key meetings of central bankers in the U.S. has reaffirmed that hawkish bias. The bank is downplaying risks to house prices and jobs and looks ready to hike. (james.glynn@wsj.com; @JamesGlynnWSJ)

0521 GMT - France's credit ratings are unlikely to change before next year's elections, TD Securities' Pooja Kumra says in a note. The next key reviews are due on Oct. 23 by Moody's Ratings and Nov. 27 by S&P Global Ratings. Moody's has an Aa3 rating with negative outlook, while S&P has A+ with a stable outlook. Fitch Ratings kept its rating on France unchanged in August, while Morningstar DBRS only changed its outlook to negative from stable, confirming the AA rating. (emese.bartha@wsj.com)

0512 GMT - The 10-year French OAT-German Bund yield spread is expected to consolidate around 100 basis points as the market adjusts to this new reality, HSBC's Chris Attfield says in a note. "There is little point in trying to draw 'lines in the sand' beyond which spreads will not rise, but 120 bps may be the next psychological level in any further spread weakness," the European rates strategist says. Eurozone yield spreads have been systematically widening in response to the surge in yields, but France's move is far larger than HSBC would expect given its debt/GDP, he says. The 10-year OAT-Bund yield spread widened to 105.5 bps on Friday; it closed at 100.7 bps on Monday, according to LSEG. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

September 22, 2026 02:13 ET (06:13 GMT)