Global Forex and Fixed Income Roundup

Economic

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

0701 GMT - Lower-than-expected U.S. CPI data on Wednesday would lead to more yield spread compression between U.S. and German government bonds, say Danske Bank Research's Kristoffer Kjaer Lomholt and Filip Andersson say in a note. The February CPI data is due at 1230 GMT. A Wall Street Journal poll of economists forecasts the headline month-on-month CPI growth at 0.3% from 0.5% previously and they expect the month-on-month core CPI growth to be 0.3% from 0.4% previously. The 10-year U.S. Treasury-German Bund yield spread is 135 basis points, having traded at 221 basis points at the beginning of the year, according to LSEG data.

0700 GMT - South Korea's benchmark Kospi rose 1.5% to close at 2574.82, extending early gains. Steel and chip stocks advanced. Though President Trump's 25% tariffs on all steel and aluminum imports took effect as planned, signs of easing U.S.-Canada trade tensions and a potential cease-fire in Ukraine supported sentiment. Some traders hunted for bargains after recent falls, with foreign and institutional investors being net buyers. Steelmaker Posco Holdings and memory-chip maker SK Hynix both rose 5.9% after two straight sessions of losses. USD/KRW settled 0.5% lower at 1,451.00 in Seoul onshore trading. South Korea's 10-year government bond yield was up 0.6 basis point at 2.766%.

0638 GMT - A rise in German spending will result in higher deficits but it also has the potential to bolster growth in the medium term after years of underinvestment, Nuveen's Laura Cooper says in a note. In the medium-term, a better outlook for Germany will bode well for asset exposure in Europe, the senior macro strategist says. "Importantly, with Germany having greater fiscal capacity to raise its level of debt, the growth impulse more than offsets concerns of fiscal sustainability," she says, Over the medium term, this should contribute to a better structural outlook for Germany, "bolstering the case for European exposures." Germany announced a large-scale long-term spending plan last week.

0635 GMT - The steepening of the German government bond yield curve is likely to extend as the long end bakes in greater issuance, says Nuveen's Laura Cooper in a note. The steepening, where the gap between short- and long-dated bond yields widens, will drive the 10-year Bund yield to 3.1% by year-end, according to Nuveen's forecast. The short end of the German curve remains more vulnerable to the risk of a material escalation on the U.S. tariff front, the senior macro strategist says. This could prompt the European Central Bank to cut interest rates below 2% in this cycle, "keeping the steepener in play," she says. The 10-year Bund yield ended at 2.894 on Tuesday, up 8 basis points, according to Tradeweb.

0628 GMT - China's fiscal plan could offset about 40% increase in U.S. tariffs, ANZ Research senior China strategist Zhaopeng Xing writes in a note. Every 10% U.S. tariff will cost 0.5 percentage points of China GDP over the next four years, the analyst says. The fiscal plan released during the National People's Congress this year was slightly below expectation, he adds. The CNY3.5 trillion actual increment in fiscal deficit is equivalent to about 2.2% of GDP, he says. China's deficit, which is the gap between expenditure and revenue of both general public and government funds budgets, will rise by 2.2 percentage points to 9.9% this year, highest in history, ANZ Research says.

Source：Dow Jones Newswires

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Global Forex and Fixed Income Roundup

Source：Dow Jones Newswires

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