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

0627 GMT - The summit between President Trump and Chinese leader Xi Jinping shows that limited surprises is good news, ING's Lynn Song says in a note. As widely expected, there weren't many major breakthroughs on key issues such as artificial intelligence and geopolitics. "Progress on tech competition and geopolitical developments is hard to come by," Song says. Still, that doesn't mean the summit was for nought, he adds. The summit reflects wider efforts to sustain regular dialogue, lower the risk of misunderstandings and avoid costly missteps. This comes at a time when economic growth is becoming more uneven and fragile across many countries, Song says. (amanda.lee@wsj.com)

0559 GMT - Broad index and retirement funds are now tied to the AI boom, with technology stocks accounting for about 40% of the S&P 500. Only three chip makers account for more than 25% of the MSCI EM index, says Ipek Ozkardeskaya, senior analyst at Swissquote. AI is the "cornerstone that must not crack," she adds. For now, U.S. equities will have the seasonal wind at their backs and the equity rally could extend into the year-end, she says. The worst-case scenario would be that something cracks in the AI story, triggering a notable pullback, she adds. (james.glynn@wsj.com; @JamesGlynnWSJ)

0538 GMT - Morgan Stanley has abandoned its forecast for a weaker U.S. dollar. "We thought the U.S. dollar's descent would continue into 2H26. We were wrong," the bank says in a note to clients. MS now forecasts U.S. dollar strength through year-end and into 2027 as interest rates rise. The bank forecasts the DXY to rise to 104.00 by mid-2027, from 101.2 now. Fed hawkishness and U.S. rate outperformance, coupled with increased negative political risk in Europe, suggest the U.S. dollar's outlook is rosier, not weaker, it adds. (james.glynn@wsj.com; @JamesGlynnWSJ)

0534 GMT - U.S. Treasury yields rise in Asian trade but stay below Thursday's multiyear highs as markets embrace the idea of higher-for-longer bond yields in anticipation of further interest-rate hikes. "Tighter policy expectations are driving yields higher--not risk premia," SEB's Gustav Helgesson says in a note. The global rise in bond yields is continuing at a rapid pace, particularly in the U.S., the macro strategist says. The 10-year Treasury yield is up 1.3 basis points at 5.174%, below Thursday's 5.225%, the highest since mid-2007, according to Tradeweb. (emese.bartha@wsj.com)

0520 GMT - The U.S.-Iran conflict, as well as energy price developments remain the main drivers and the key uncertainty for eurozone government bond yields and market pricing of the European Central Bank's rate path, say Societe Generale rates strategists in a note. "The speed of the recent ECB repricing has surprised many market participants, but the level of the terminal rate can be rationalized," they say. Money markets currently price in 100 basis points of interest rate hikes by the end of October 2027, according to LSEG. (emese.bartha@wsj.com)

0511 GMT - Longer-dated Japanese government bond yields aren't expected to climb further, Capital Economics' John Higgins says in a note. The chief economic adviser for financial markets sees the 10-year JGB yield ending this year and next at 3.0%. That is around current levels, after the latest JGB selloff sent the 10-year yield decisively above 3% for the first time in three decades. He notes that mid-2027 expectations for the BOJ policy rate, as implied by the OIS market, roughly align with CE's 2% forecast. Beyond that, "we don't expect the rate to continue to rise by as much as investors appear to expect," Higgins writes. CE views the neutral level at or around 2%, while OIS-implied rates in the distant future now exceed 4%. (farah.elias@wsj.com)

0504 GMT - The continued rise in longer-term Treasury yields is hardly surprising, Catalyst Funds' Larry Holzenthaler says. Inflation is well above the Federal Reserve's target and it appears they are going to continue to raise rates, the portfolio manager says. "Government debt and spending levels remain a concern globally, economic data in the U.S. continues to point to a relatively strong environment," he says. With the energy situation, "it's a long list," he says. "Add to that AI spend and it's hard to bet that rates are headed lower anywhere along the curve." Markets' pricing of three interest-rate hikes by the end of 2027 "seems fairly reasonable" and would certainly make holding traditional fixed income assets a painful exercise, he says.