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

1151 GMT - Euro-denominated investment-grade credit looks more attractive than their dollar-denominated counterparts due to better demand-supply balance, Morgan Stanley strategists say in a note. Euro IG supply is expected to be modest while U.S. IG supply is expected to rise notably, the strategists say. Euro IG credit spreads are expected to stay relatively steady making the assets more appealing than U.S. IG credit which is expected to experience spread widening, they say. (miriam.mukuru@wsj.com)

1140 GMT - The message from July's Ifo business-climate index is moderately supportive of German economic activity strengthening, echoing last week's PMI data, S&P Global Market Intelligence economist Timo Klein says in a note. The increase in the index to 86.6 in July from 85.7 in June was the third consecutive rise, driven by stronger expectations, though assessments of current conditions fell a little. Still, most survey responses were likely submitted before last week's sharp jump in oil prices, Klein says. "Our mid-July forecast puts German GDP growth at 0.6% for 2026 and 1.0% for 2027, up 0.2 percentage points from June." That reflects June's larger-than-expected oil-price fall, though continued volatility in the Middle East warrants caution, he says. (edward.frankl@wsj.com)

1130 GMT - The dollar could resume appreciating if the Federal Reserve surprises markets with an interest-rate rise on Wednesday, MUFG Bank's Lee Hardman says in a note. "We have been assuming that the Fed would leave rates on hold this week but one can't completely rule out the possibility of a rate hike," he says. A rate rise would send a powerful signal that Fed Chair Kevin Warsh is serious about improving the central bank's inflation fighting credibility at the start of his term, he says. The DXY dollar index falls 0.2% to 101.316. (renae.dyer@wsj.com)

1128 GMT - The significant increase in the Ifo German business-climate survey is only of limited significance since most companies answered the survey before the massive oil-price increase of the last two weeks, Commerzbank's Joerg Kraemer says in a note. The index rose to 86.6 in July, from 85.7 in June. Most companies usually respond to the Ifo survey by the middle of the month, he says. The road looks bumpy ahead, and high energy prices are set to weigh on the German economy in the second half of the year. However, the increase at least shows the potential for economic recovery if the U.S. and Iran reach an agreement and the Strait of Hormuz is permanently opened, he says. (edward.frankl@wsj.com)

1049 GMT - Credit spreads on U.S. dollar investment-grade bonds are expected to widen due to anticipated heavy debt issuance by large tech companies, Morgan Stanley credit strategists say in a note. Huge cloud service providers, also known as hyperscalers, are expected to increase debt issuance to fund AI-related projects, pushing up U.S. IG credit supply. Increased merger and acquisition activities and upcoming credit maturies are also likely to drive up U.S. corporate debt supply, the strategists say. "We think stronger supply headwinds will drive U.S. IG spreads modestly wider." (miriam.mukuru@wsj.com)

0940 GMT - Sterling could fall as the Bank of England looks set to leave interest rates unchanged Thursday while fiscal uncertainty persists, Monex Europe analysts say in a note. Monex expects another 7-2 vote in favor of keeping rates at 3.75% with Megan Greene and Huw Pill again preferring a rate rise. Risks are skewed towards a larger minority favoring a rate rise or BOE Governor Andrew Bailey hinting at tightening in the fall, the analysts say. "Failing that, with fiscal uncertainty under Prime Minister Andy Burnham still weighing on the pound, we retain a modest downside bias for sterling." Sterling rises 0.1% to $1.3332 against a weaker dollar but falls 0.2% against the euro at 0.8546 per euro. (renae.dyer@wsj.com)

0938 GMT - Markets should expect a low-growth, high-inflation global environment after the U.S. imposed new tariffs on key trading partners last week, CG Asset Management's Emma Moriarty says in a note. The U.S. on Friday announced new tariffs on 60 trading partners including the European Union and China. The tariffs take effect against a backdrop of a global energy shock and increased supply-chain disruptions, Moriarty says. (miriam.mukuru@wsj.com)

0938 GMT - U.S. Treasury yields fall and the dollar retreats as markets react to an easing in the Middle East tensions, as President Trump's pause of strikes on Iran cause oil prices to slide. "The apparent de-escalation dragged oil prices lower, tempering inflation concerns," says Tapaas' Jonathan Squires in a note. "A sustained decline in crude prices could further ease inflationary pressures and soften monetary policy expectations." On Wednesday, the Federal Reserve is expected to keep rates on hold, although markets anticipate a hike in September, according to LSEG. The 10-year Treasury yield falls 4.3 basis points to 4.636%, according to Tradeweb. The DXY dollar index falls 0.2% to 101.264. (emese.bartha@wsj.com)

0930 GMT - The Japanese yen faces further potential weakness unless the Bank of Japan provides "hawkish" signals about future interest-rate rises when it announces its next policy decision on Friday, MUFG Bank's Lee Hardman says in a note. The BOJ is expected to leave rates steady but market participants will be watching closely for any hints about future tightening following media reports that the central bank is open to a faster pace of rate rises. The yen could fall in the absence of such guidance, particularly if the Federal Reserve raises rates on Wednesday, he says. The dollar falls 0.2% to 163.53 yen, having reached a 40-year high of 163.98 last Thursday, LSEG data show. (renae.dyer@wsj.com)

0923 GMT - The cost of insuring euro-denominated credit against default declines as market sentiment improves after the U.S. and Iran pause hostilities. The pause has offered relief to markets and reduced the possibility of a near-term escalation in the conflict, Tickmill Group's Patrick Munnelly says in a note. The iTraxx Europe Crossover index of euro high-yield credit default swaps falls 8 basis points to 258bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)

0916 GMT - The Bank of England is expected to leave interest rates unchanged at 3.75% during Thursday's policy meeting and potentially in the coming months, MFS Investment's Peter Goves says in a note. The current level of interest rates is already restrictive, while the U.K. labor market remains weak and should mitigate second-round effects of high energy prices on inflation, if any emerge, Goves says. "Caution can and should prevail but a hold next week--and beyond--is looking increasingly plausible." Markets are fully pricing in a quarter-point BOE rate increase in November, and a 46% chance of a second rate rise by year-end, LSEG data show. (miriam.mukuru@wsj.com)

0902 GMT - A solid rise in the Ifo German business climate index points to continuing growth momentum in Germany, Philipp Scheuermeyer at KfW Research says in a note. Government reforms have driven sentiment higher, he says. "We expect a continuing growth momentum thanks to strong construction output and, presumably, even some growth in consumer spending." Still, with the peace deal between the U.S. and Iran on shaky ground, signals for the second quarter look less certain, Scheuermeyer says. Growth can continue with moderately higher energy prices. However, if energy exports from the Gulf region remain stalled for too long, the energy-price shock will ultimately take its toll, he says. Ifo's business-climate index unexpectedly rose to 86.6 in July from 85.7 in June. (don.forbes@wsj.com)

(END) Dow Jones Newswires

July 27, 2026 07:51 ET (11:51 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.