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

1019 ET - The Federal Reserve's decision Wednesday might not give the dollar a fresh catalyst to rise unless it unexpectedly raises interest rates, HSBC's Paul Mackel says in a note. Fed Chair Kevin Warsh has acknowledged inflation is above target and sounded a commitment to price stability. If Wednesday's meeting only matches these views, the dollar is unlikely to rise much given markets are already positioned for rate rises later this year, he says. "However, we are also cognisant of some toying with the idea of the Fed hiking surprisingly, just like it did suddenly in February 1994." This would boost the dollar if markets welcomed it as a prudent step, he says. The DXY dollar index falls 0.1% to 101.419. (renae.dyer@wsj.com)

1003 ET - Yields on U.K. 2-year government bonds, or gilts, drop to a 10-day low as investors reduce their expectations of the Bank of England increasing interest rates in 2026. Markets have scaled back rate-hike expectations after the U.S. and Iran paused attacks, raising hopes of a potential resolution to the Middle East conflict. The price of Brent crude falls 6.5% to $90.54 a barrel. Markets price in a total of 38 basis points of BOE rate rises this year, down from 47 basis points priced on Friday, LSEG data show. Two-year gilt yields fall 4.7bps to last trade at 4.3795%, having hit a low of 4.3464% earlier in the session, LSEG data show. (miriam.mukuru@wsj.com)

0941 ET - The Swedish krona could strengthen modestly towards year-end if the prospect of the Riksbank raising interest rates increases, Rabobank's Jane Foley says in a note. Tax cuts for workers, pensioners and corporates along with lower value-added tax on food is currently suppressing inflation but this impact will disappear next year and potentially add pressure on the Riksbank to increase rates, she says. "To promote the perceived risk of Riksbank policy tightening further and to fuel upside potential for the krona, both growth and inflation data for Sweden will likely have to print on the firmer side of market expectations in the coming months." The euro rises 0.1% to 11.0510 krona. (renae.dyer@wsj.com)

0938 ET - The solid 0.9% gain in nondefense capital-goods orders excluding aircraft is consistent with the baseline forecast for business equipment investment to continue supporting growth in the second half of the year, according to a note from Oxford Economics. "The AI infrastructure buildout is showing no signs of slowing, which is driving up new orders of computers and electronic products and spilling over into other sectors such as machinery--namely, power transmission equipment--and metals," Oxford says.(jessica.coacci@wsj.com)

0905 ET - Global mergers and acquisitions have been rising, tracking toward the highest volumes on record, Morgan Stanley credit strategists say in a note. M&A activity has been strong in the U.S. and similar transactions are picking up in Europe supported by "a softening stance on consolidation from the European Commission, high fragmentation and solid balance sheets," the strategists say. (miriam.mukuru@wsj.com)

0859 ET - Treasury yields drop from recent highs as Fed week starts with a pause in hostilities between the U.S. and Iran. Oil prices fall sharply while the WSJ Dollar Index slips less than 0.1%. June durable goods orders rise 0.3%, missing WSJ consensus of a 2.1% increase. The Fed is expected to remain on hold Wednesday, but uncertainty is higher than usual. Futures markets price 34% odds of a rate increase, according to CME. The 10-year yield is at 4.647%, down from Friday's 4.678% settle. The two-year drops to 4.320% from 4.328%. (paulo.trevisani@wsj.com; @ptrevisani)

0841 ET - Sterling falls to a three-week low against the euro as U.K. fiscal concerns weigh. New Prime Minister Andy Burnham's government has announced tax cuts to electricity bills and business rates for pubs, clubs and live music venues along with a cap on bus fares. "We are beginning to see a few jitters among investors as the tax cuts unveiled so far both appear unfunded and raise the risk of tax hikes and additional borrowing down the road," Ebury economist Enrique Diaz-Alvarez says in a note. The euro rises to as high as 0.8559 pounds. Sterling falls 0.1% to $1.3383. (renae.dyer@wsj.com)

0813 ET - Copper prices rise in afternoon trading as a pause in fighting between the U.S. and Iran pushes oil lower, easing concerns over inflation pressures and global economic growth. Three-month futures on the London Metal Exchange are up 1.2% to $13,769.50 a metric ton. Focus in recent weeks has been on potential new U.S. import tariffs and Chinese demand. "In China, the premium paid for imported copper over local supplies in China rose to $100 a ton, up from $20 a ton in late January, a sign of strong demand," ANZ analysts say. "The market is also bracing for the possibility that the Trump administration imposes levies on imports of copper, which continues to attract increasing volumes of metal into the U.S." Meanwhile, a deadly storm in Chile disrupted production at major copper mines, adding further supply concerns. (giulia.petroni@wsj.com)

0755 ET - Markets lower their expectations of the Bank of England increasing interest rates in the coming months as oil prices fall. The U.S. and Iran paused attacks over the weekend, after two weeks of exchanging fire, causing oil prices to fall. Brent crude is last down 7.8% at $89.2 a barrel. Lower energy prices ease inflation concerns and reduce the possibility of rapid central-bank rate rises in the coming months. Investors currently price a total of 36 basis points of BOE rate rises in 2026, 11 basis points lower than Friday's pricing, LSEG data show. (miriam.mukuru@wsj.com)

0753 ET - The Ifo Instite's business-climate index surprised positively in July, reaching its highest since February, Deutsche Bank economist Marc Schattenberg says. The headline index rose to 86.6, from 85.7 in June. Expectations rose significantly, suggesting the German government's reform package proposed this month likely bolstered many firms' hopes, he says. The downside is that the survey's gauge of current business conditions deteriorated, likely a result of the renewed rise in oil prices, which will remain a risk for the coming months, Schattenberg says. However, the Ifo data sends a positive signal regarding the German economy's start to the third quarter, he says. He pencils in economic growth of 0.5% for 2026 as a whole. (edward.frankl@wsj.com)

0751 ET - 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)

0740 ET - 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)

(END) Dow Jones Newswires

July 27, 2026 10:19 ET (14:19 GMT)

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