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

0737 GMT - Last week's historic selloff in German Bunds, which resulted from Germany's large-scale fiscal-loosening plans, "may not prelude a bear trend," Citi Research's strategists say in a note. While the market may want to test the 3% level for the 10-year Bund, the focus may soon shift to more immediate drivers, which lean bullish, including continuing European Central Bank rate cuts, they say. Thus, tentatively, Citi strategists' base case for the 10-year Bund yield is between 2.25% and 2.75% for the quarters ahead. The 10-year Bund yield rises 2.5 basis points to last trade at 2.856%, according to Tradeweb. (emese.bartha@wsj.com)

0737 GMT - The dollar trades steady but remains at weaker levels after losses last week amid uncertainty over U.S. President Trump's policies. The big issue for markets is the fact that Trump's policies change as "often as the direction of the wind does," Pepperstone strategist Michael Brown says in a note. Trump's whipsawing on tariffs makes it impossible for market participants to price risk or accurately discount a future policy path, he says. There is no surprise that "nobody wants to touch dollar denominated assets right now" with the DXY dollar index suffering its worst week in two-and-a-half years last week, he says. The DXY trades flat at 103.853 after hitting a four-month low of 103.458 Friday.(renae.dyer@wsj.com)

0722 GMT - The steepening of the German government bond curve opens up the prospect of increased demand for eurozone debt from Japanese investors, says MUFG's Derek Halpenny in a note. "The steepening of the yield curve means for Japanese investors there is a better return on hedged fixed income purchases in the euro-zone," the head of research for global markets in EMEA says. The interest-rate cut from the European Central Bank and the Bank of Japan's rate hike in January mean the cost of hedging for Japanese investors is cheapening, Halpenny says. The two- to 10-year German yield spread--which is currently 59 basis points, according to Tradeweb--widened to close to 60 basis points last week, the highest since July 2022, he says. (emese.bartha@wsj.com)

0706 GMT - The Nikkei Stock Average ended 0.4% higher at 37028.27 as gains in auto and tech shares helped offset losses in heavy-industry and pharmaceutical stocks. Subaru gained 2.5% and SoftBank Group added 1.4%, while Mitsubishi Heavy Industries dropped 5.8% and Chugai Pharmaceutical lost 3.7%. The broader Topix index fell 0.3% to 2700.76. The 10-year Japanese government bond yield rose 5.5 basis points to 1.575%, the highest level since October 2008. Investors are focusing on U.S. trade and foreign policies. USD/JPY was at 147.69, compared with 148.03 late Friday in New York. (kosaku.narioka@wsj.com; @kosakunarioka)

0654 GMT - With more issuance than redemptions and coupon payments, net issuance of U.S. Treasurys will be positive in the next five week's, Morgan Stanley Research's Matthew Hornbach calculates. Over the next five weeks, Morgan Stanley expects $460 billion of supply against $178.7 billion of redemptions and $24.2 billion of coupon payments, the strategist says in a note. This week, the U.S. Treasury will issue $58 billion in three-year notes on Tuesday, $39 billion in 10-year notes on Wednesday and $22 billion in 30-year bonds on Thursday. The 10-year Treasury yield last trades at 4.297%, down 3 basis points, according to Tradeweb. (emese.bartha@wsj.com)

0517 GMT - Japan's real wages will likely keep falling in the near term, as the speed of price increases outpace that of wage growth, SMBC Nikko Securities economists say. Government data released Monday showed that inflation-adjusted wages fell 1.8% in January from a year earlier, the first decline in three months. "In February and March 2025, revived subsidies for electricity and gas will likely slow price increases, helping the fall in real wages shrink. But that's not enough to push them positive," the economists say. They expect real wages to turn positive in the latter half of this year when food inflation is expected to ease and this year's wage hikes go into effect.(megumi.fujikawa@wsj.com)

(END) Dow Jones Newswires

March 10, 2025 03:38 ET (07:38 GMT)

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