Global Forex and Fixed Income Roundup: Market Talk

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

0547 GMT - A unanimous decision by the Federal Reserve to raise rates, and the suggestion of an additional hike later this year, will help remove some uncertainty for the market, Catalyst Funds' Larry Holzenthaler says, adding that it is a positive. "It's fair to assume that if the Fed had not acted today [Wednesday], it would have caused meaningful strain across markets," the senior portfolio manager says. This rate hike--and suggestion of more to come--should keep the demand for low-duration credit fairly high, in particular senior corporate loans, which have a floating rate coupon structure, and the same can be said for higher-yielding, shorter-duration bonds as well, he says. (emese.bartha@wsj.com)

0541 GMT - The Federal Reserve's decision to raise rates doesn't necessarily mark the start of a sustained upward momentum in the dollar, DBS's Philip Wee writes. "This is not the U.S.-led hiking cycle in 2022," says the foreign-exchange strategist. The Fed is catching up with major central banks in responding to inflation risks and preventing energy price shocks from generating second- and third-order effects across the economy, he notes. The Treasury market also remains a key drag on confidence, with yields staying firm on 10-year and 30-year Treasurys, suggesting that the struggle over long-term borrowing costs is unresolved, Wee adds. DBS sees the DXY dollar index remaining in the 96-102 range established since mid-2025. The DXY is flat at 100.278. (farah.elias@wsj.com)

0538 GMT - U.S. Treasury yields are little changed in Asian trade, absorbing the Federal Reserve's 25-basis-point interest-rate hike Wednesday and the prospect of more tightening to come. "Despite the hike, there is potential for some relief from investors now that the Fed has caught up with the market in terms of rate projections," says Stephen Coltman, head of macro at 21shares, in a note. "The FOMC is officially forecasting one more rate hike this year, in line with current market pricing," he says. This suggests the risks for investors going forward around the Fed have now become more two-sided, he says. The two-year Treasury yield falls 0.7 basis point to 4.719%, while the 10-yer yield is flat at 5.003%, according to Tradeweb. (emese.bartha@wsj.com)

0528 GMT - Further interest-rate hikes should clearly be on the Federal Reserve's agenda, Aviva Investors' Ed Hutchings says in a note. With core inflation printing above target for the last five years and short and long-term inflation expectations at uncomfortable levels, the Fed still has a sizeable task at hand, and this is all before the effects of El Nino are known, the head of rates says. "With all this considered, alongside an employment market holding in well and no respite in the Middle East situation, the outlook for the inflation side of the Fed's mandate must remain a significant and primary source of concern," he says. Addressing this must be the priority, he says. (emese.bartha@wsj.com)

0526 GMT - The culprit of the yen's recent depreciation is Japan's relatively weak expansion of strategic investments to promote industrial policies, Credit Agricole says in a note. U.S. data centers and chip-making projects, for instance, have been attracting a great deal of foreign capital and investors. Japan has lagged behind the U.S. and Europe in strategic investments, which is reflected in the Japanese government's smaller fiscal deficit, the French bank says. Thanks to rising tax revenue, the Japanese government has large fiscal room to expand strategic investments, the bank says. The government's intent of expanding investments is likely to become clearer in the process of formulating the next fiscal year's budget, the bank says. (kosaku.narioka@wsj.com; @kosakunarioka)

0522 GMT - U.S. Treasury Secretary Scott Bessent can buy some time with an increased longer-dated bond buyback, but for the bond market's fiscal concerns to ease, actual action has to be taken in Washington, Bernstein Private Wealth Management's Matthew Palazzolo says in a note. Bernstein Private Wealth Management has limited expectations in this regard. "The bond market, though, is much larger and stronger than the Treasury," the senior investment strategist says. Relatedly, it's worth noting that the recent bond moves are not a U.S.-only phenomenon, he says. "So, to anchor the Treasury yield move in large part to our deficit issues is myopic, in our view," Palazzolo says. (emese.bartha@wsj.com)

0516 GMT - The move of the 10-year Treasury yield back to 5% is real, but the cause is narrower than the headlines suggest, Bernstein Private Wealth Management's Matthew Palazzolo says in a note. "In our view, the big driver of the move in Treasurys recently has been the anticipated policy path or, alternatively, the real yield, which have each risen by around 50 basis points this year," the senior investment strategist says. "It tells us that the move is not due to higher inflation expectations since those expectations haven't changed much," he says. He adds that it is also not illuminating concerns about a material inflation shock or other macro/geopolitical shock, as those are accounted for by the term premium, which has also moved sideways of late. (emese.bartha@wsj.com)

0507 GMT - The bigger question after the Federal Reserve's 25bp rate increase Wednesday is whether the move will be "one and done" or mark the beginning of another tightening cycle, TruStage chief economist Steve Rick says. "Higher oil prices stemming from continued conflict in the Middle East could keep inflation elevated, but monetary policy works with long and variable lags, and additional increases would put more pressure on consumers and businesses already facing elevated borrowing costs," he says. The Fed should give the increase time to take effect before determining how much additional restraint is necessary, Rick says. (emese.bartha@wsj.com)

0503 GMT - "AI presents an interesting challenge for the Federal Reserve because it could be inflationary in the near term and disinflationary over the longer run," TruStage chief economist Steve Rick says in a note. The enormous investment in data centers, chips, power and skilled labor is creating significant demand today, which could add to price pressures in parts of the economy, he says. "But if those investments translate into stronger productivity growth, AI could ultimately allow the economy to grow faster without generating the same degree of inflation," Rick says. (emese.bartha@wsj.com)

0502 GMT - It was important to see a united Federal Reserve, which draws a line under any potential market concerns around Fed credibility, Impax Asset Management's Ross Pamphilon says in a note, after the Fed unanimously voted to raise interest rates on Wednesday. "One more hike penciled in for later this year will be well received by the market," the fixed income CIO says. Given that the U.S. Treasury market was already reflecting tighter monetary conditions, this was arguably a credibility hike with the Fed passing the test with flying colors, he says. On Wednesday, the Fed voted unanimously for a 25-basis-point rate increase. (emese.bartha@wsj.com)

0500 GMT - Singapore's central bank could raise the slope of its monetary policy band "very slightly" in October, says Barclays's Brian Tan in a note. This implies a 25 basis-point adjustment to an estimated 1.50%, the economist says. He views such a move as justified due to likely relatively robust gross domestic product growth into 2027, citing "the sheer magnitude of the artificial-intelligence boom." He raises his 2026 economic growth projection to 5.5% from 4.5% to factor in Singapore's still-firm August nonoil domestic export figures. The Monetary Authority of Singapore uses the exchange rate as a policy tool for maintaining price stability, given the city-state's small and open economy. (megan.cheah@wsj.com)

(END) Dow Jones Newswires

September 17, 2026 01:47 ET (05:47 GMT)