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

0538 GMT - U.S. Treasury yields trade stable in Asia, as investors come to terms with a renewed bout of tensions between the U.S. and Iran after President Trump's announcement earlier this week that the ceasefire between the two countries was over. "Yields pulled back as markets looked past the recent rounds of U.S.-Iran attacks and Brent crude declined below $77 per barrel," Danske Bank analyst August Hyldgaard says in a note. The two-year Treasury yield trades at 4.165%, while the 10-year Treasury yield is at 4.540%, according to Tradeweb. (emese.bartha@wsj.com)

0529 GMT - Investors have become increasingly concerned that the Federal Reserve's next policy decision will be a quarter percentage-point hike, coming as early as this month, but this is unlikely to happen, says Phil Orlando at Federated Hermes. "We disagree, expecting the Fed will look through the energy supply shock, which should be temporary, and keep rates unchanged," the chief market strategist writes in a note. Last week's disappointing U.S. labor-market data prompted markets to push out their expectations for an eventual rate hike to later this year. Money markets price in a 22% probability of a 25-basis-point rate increase in July, according to LSEG. (emese.bartha@wsj.com)

0524 GMT - The Australian dollar briefly hit US$0.6970 in Asia supported by better risk sentiment and a softer U.S. dollar, says Samara Hammoud, FX strategist at CBA. The U.S. dollar hasn't reacted materially to the escalation in the Middle East this week with the costs of returning to war remaining high and acting as an incentive for the U.S. and Iran to stick to the ceasefire, she adds. Looking ahead, less favorable interest rate differentials, softer commodity prices and higher U.S. equity returns relative to Australian equities will be more significant drivers of the Australian dollar, Hammoud adds. (james.glynn@wsj.com; X @JamesGlynnWSJ)

0521 GMT - Municipal bonds outperformed in the second quarter, Federated Hermes's R.J. Gallo says in a note. "Investors continue to respond to high taxable equivalent yields and favorable credit trends in the muni market, ploughing money into municipal mutual funds at a record pace," the CIO for global fixed income says. Demand was so strong that municipal market yields actually fell during the quarter while Treasury yields increased, he says. In general, investor demand for bonds as an asset class has improved relative to the past few years, with strong bond fund inflows and institutional rebalancing into fixed income following years of strong equity performance, Gallo says. (emese.bartha@wsj.com)

0513 GMT - The Federal Reserve's minutes underline that the Fed is at unease about inflation, SEB's Jussi Hiljanen says in a note. The minutes of the June meeting, published Wednesday, also underline that an immediate tightening would provide only limited support and thus the Fed's reluctance to hike into mounting growth uncertainties, the chief strategist says. "This likely keeps the bar relatively high for rate increases and leaves the door open for cuts once inflation improves and labour market softness becomes more evident," he says. Given the balance of risks, SEB thinks that discounting around 1.5 hikes is fair at this point. (emese.bartha@wsj.com)

0509 GMT - The rupture of the U.S.-Iran ceasefire and rising oil prices have helped push the 10-year U.S. Treasury yield back above 4.50%, but it is still likely to continue searching for direction, SEB's Jussi Hiljanen says in a note. "We continue to think that the 10-year yield will lack a clear trend in the coming months, fluctuating mostly in a 4.30-4.50% range," the chief rates strategist says. A sustained downtrend in long yields would require a durable conflict resolution and clearer support from Federal Reserve communication, he says. In Asian trade, the 10-year Treasury yield is up 0.2 basis points at 4.539%, according to Tradeweb. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

July 10, 2026 01:38 ET (05:38 GMT)

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