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

0356 GMT - China's wage growth decelerated in 1Q and 2Q after a modest increase in 4Q last year, Goldman Sachs' data shows. China's wage growth has been trending down since 1Q 2023 when China exited its zero-Covid policy, GS economists say, and it has slowed to 4.2% and 3.9% in 1Q and 2Q, respectively, from 4.5% in 4Q. "Despite the 5.2% real GDP growth in 2Q, our wage tracker suggests that sluggish wage growth may impose headwinds to consumption growth in the second half of 2025," they say. GS anticipates incremental and targeted easing measures in 2H to alleviate labor market pressures. (sherry.qin@wsj.com)

0354 GMT - Singapore's CPI likely rose 0.9% on year in June, according to the median estimate of nine economists surveyed by The Wall Street Journal. That would be slightly higher than May's 0.8% increase. Headline inflation could have been driven by a rebound in car certificate-of-entitlement premiums, Barclays economists and analysts say in a note. Core CPI likely climbed 0.7% in June, compared with May's 0.6% gain, according to seven polled economists. Core inflation is expected to have remained below 1.0% in 1H amid low price pressures across a broad range of goods and services, DBS's economics team writes in a report. The CPI data are due Wednesday.(amanda.lee@wsj.com)

0346 GMT - Japan's political situation is likely to continue placing downward pressure on the yen, SMBC's Ryota Abe says in an email. "The current ruling party has undeniably lost ground, and expectations for expansive fiscal policies, as sought by the opposition, remain," the economist says, noting the Upper House election's outcome. Also, as a risk scenario, some candidates perceived as "post-Ishiba" within the ruling Liberal Democratic Party support expansive fiscal policies, which makes yen depreciation pressure likely, Abe adds. (ronnie.harui@wsj.com)

0304 GMT - The week ahead will be a testing one for the Reserve Bank of Australia, which is scheduled to publish minutes of its recent policy meeting on Tuesday amid upset that the central bank didn't deliver a further interest-rate cut. For many traders and economists, the sluggishness of the economy and the apparent taming of inflation meant the RBA was clear to cut. Still, it kept the official cash rate on hold, arguing it wanted to see coming 2Q CPI data. Markets will put the minutes under a microscope. RBA Gov. Bullock also speaks on Thursday, when she's sure to get more questions from market participants. (james.glynn@wsj.com; X @JamesGlynnWSJ)

0304 GMT - Indonesia's tariff deal with the U.S. may cushion exporters from severe shocks while unlocking opportunities for investment and driving deregulation, Maybank analysts Jeffrosenberg Chenlim and Jocelyn Santoso say in a note. The softer-than-expected 19% tariff, versus the 32% proposed earlier, should preserve manufacturing jobs and help steady consumer spending, they note. Duty-free access to U.S. goods, especially feed and capital goods, could benefit poultry, food, metal, and healthcare sectors, they say. Eased import rules and potential reforms may attract foreign investment, particularly in downstream industries. However, risks remain from FX volatility, pressure on local producers, and lost leverage in future trade talks, they add. (yingxian.wong@wsj.com)

0303 GMT - The Singapore dollar consolidates against its U.S. counterpart in the Asian session as traders await more tariff developments. Media reports say President Trump is readying plans for industry-specific tariffs to kick in together with his country-by-country duties in two weeks, MUFG Bank's Michael Wan says in a note. Details of Trump's planned 50% tariff on copper could be released before Aug. 1, tariffs on pharmaceuticals could be imposed by month-end, while import taxes on semiconductors could happen soon, the senior currency analyst adds. USD/SGD is little changed at 1.2846. (ronnie.harui@wsj.com)

0252 GMT - The Japanese ruling coalition's election defeat points to a looser fiscal policy over the coming months, Capital Economics' Marcel Thieliant says in commentary. "Major opposition parties all campaigned on a cut in the sales tax in some form, including only lowering the tax on food," the head of Asia-Pacific says. However, "lowering the sales tax would be a cumbersome way of combating strong inflation as it would force nearly all firms to change their prices, with all the associated costs," Thieliant says. It seems more likely that the government will stick to its "tried-and-tested" approach of offering cash handouts and energy subsidies, Thieliant adds. (ronnie.harui@wsj.com)

0240 GMT - The Monetary Authority of Singapore is likely to keep its policy unchanged this month after two consecutive rounds of easing in January and April, says CIMB. While disruptions to global trade weigh on Singapore's growth outlook, stronger-than-expected 2Q GDP and subdued core inflation provide sufficient room to pause, say economist Chew Khai Yen and head of research Michelle Chia in a note. Preserving policy space could be a priority ahead of the finalization of country and sectoral tariffs by the Trump administration. However, should external headwinds intensify and inflation remain low, CIMB expects MAS to flatten the Singapore dollar's nominal effective exchange rate policy band to 0% in October. (monica.gupta@wsj.com)

0223 GMT - Malaysia's economy is expected to face tougher conditions in 2H due to tariff risks and external uncertainties, while domestic activity is expected to stay resilient, CGS International economists Mas Aida Che Mansor and Nazmi Idrus say in a note. Wage hikes, pension reforms, tourism recovery, policy rate cuts and ongoing infrastructure projects are likely to support spending and investment, they say. However, subsidy cuts and sales tax expansion may negatively impact consumption, they add. CGS maintains its 2025 GDP growth forecast at 4.2%, down from 5.1% in 2024. (yingxian.wong@wsj.com)

0201 GMT - Chinese policymakers are unlikely to launch broad-based stimulus in the near term even with a Politburo meeting expected to be held by end-July to discuss economic policies for 2H, Goldman Sachs economists in a research note. The GS economists don't think policymakers see the need for significant stimulus as real GDP growth in 1H exceeded the "around 5%" growth target this year. Beijing is likely to reiterate its pledge to boost domestic demand and to stabilize exports, employment and the property market, GS says. (tracy.qu@wsj.com)

0139 GMT - The loss suffered by Japan's ruling coalition in the Upper House election suggests a likely expansionary bias in fiscal policy ahead, Goldman Sachs' economists say in a research report. "As the ruling coalition no longer has a majority in the Upper or Lower Houses, cooperation with opposition parties on a bill by bill basis is likely to become even more crucial for passing legislation," the economists say. Meanwhile, opposition parties have been proposing consumption tax cuts, increases in various social security measures, and childcare and education support, they note. The economic package which the Liberal Democratic Party plans to formulate in the coming Autumn will probably incorporate some of the demands from opposition parties, the economists add. (ronnie.harui@wsj.com)

0139 GMT - Political uncertainty in Japan after the ruling coalition's heavy loss in the Upper House election is likely to weigh on the yen, says Paul Mackel, Global Head of FX Research at HSBC. The USD/JPY could reach 152 on the back of the election result, he says in a note. However, an overshoot is still possible. For instance, the yen could further weaken if the Bank of Japan sees the need to adjust its purchases of JGBs to smooth potential bond market volatility. With the yen being an anchor currency in the Asian region, its sudden shifts could cause other currencies like the Korean won, Taiwan dollar and Singapore dollar to move too, he adds. USD/JPY is last at 148.46. (monica.gupta@wsj.com)

(END) Dow Jones Newswires

July 20, 2025 23:56 ET (03:56 GMT)

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