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.

0541 GMT - The Federal Reserve is widely expected to hold the Fed funds rate, but "the bigger story will be the Fed's messaging," Generali Investments' Paolo Zanghieri says in a note. The senior economist expects policymakers to maintain--or even strengthen-a hawkish tone as persistent inflation, rising oil prices and divisions within the FOMC keep the door open to further tightening later this year. "This aligns with Generali's broader outlook that sticky inflation will keep central banks cautious even as headline inflation eases," Zanghieri says. The economist adds that markets will focus less on the rate decision itself and more on any signals regarding the September meeting and the balance between inflation risks and economic growth. (emese.bartha@wsj.com)

0524 GMT - Investors should expect a "hawkish hold" at the Federal Reserve's meeting, where there is also a meaningful probability of a rate increase, TwentyFour Asset Management's Gordon Shannon says in a note. Markets currently price in a 31.5% probability of a hike Wednesday, according to LSEG. "While I predict the Fed will tighten policy by 25-50 basis points later this year, the softer June CPI inflation and weak payroll growth indicate the committee can wait for more data," the co-head of investment grade says. (emese.bartha@wsj.com)

0523 GMT - U.S. Treasury yields edge higher as oil rises after Iran launched a ballistic-missile attack on American forces in the Middle East in a sudden escalation after several days without strikes from either side. Meanwhile, markets expect the Federal Reserve to stay on hold, amid risks of a hike, which is priced in with a 31.5% probability by markets, according to LSEG data. "Our base case remains that the Fed stays on hold in July and through the end of 2026," Principal Asset Management's Seema Shah says in a note. Recent inflation data and contained inflation expectations give policymakers scope to wait for greater clarity before acting, the chief global strategist says. The 10-year Treasury yield is up 0.6 basis points at 4.609%, according to Tradeweb. (emese.bartha@wsj.com)

0511 GMT - The Federal Reserve's current signals are somewhat ambiguous, Mediolanum International Funds' Daniel Loughney says in a note. The market has interpreted Chairman Kevin Warsh's comments as hawkish at his first FOMC meeting and moved from pricing in rate cuts to rate hikes, the head of fixed income says. Currently, the market prices a 31.5% probability of a hike later Wednesday and expects the Fed to raise rates by slightly more than 50 bps over the next 12 months, according to LSEG data. "We believe that the market's interpretation of Fed intentions is wrong and rate increases are not merited," he says. Mediolanum viewed Warsh as neither hawkish nor dovish at the last meeting, Loughney adds. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

July 29, 2026 01:41 ET (05:41 GMT)