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

2046 ET - The U.S. dollar strengthens against most other G-10 and Asian currencies in the morning session. U.S. President Trump said he plans to impose 25% tariffs Monday on imports of steel and aluminum, which could spur demand for the greenback as a safe-haven asset. The USD Index has maintained its recovery, analysts at CIMB Treasury and Markets Research say in a report. The upcoming tariffs are likely to focus on the European Union given its relatively high trade surplus with the U.S., as well as the region's higher tariffs against U.S. exports, the analysts add. The USD Index is 0.3% higher at 108.36; USD/JPY gains 0.5% to 152.11. (ronnie.harui@wsj.com)

2037 ET - Continued uncertainty around Trump trade tariffs has investors on edge, but Kenanga IB analysts think the direct impact on Malaysia looks limited. The country contributes only about 2% to the U.S. trade deficit, Peter Kong and his team say in a note. Local manufacturers, exporters and tech firms could face some fallout near term, with the analysts estimating that a 5% drop in U.S.-related revenue among the stocks it covers would affect earnings by a maximum of 4%. Any ensuing weakness may present buying opportunities, they add. If tariffs align with regional import duties, Malaysia could be even less affected, easing pressure on exports and supporting market sentiment, they reckon.(yingxian.wong@wsj.com)

1932 ET - JGB futures edge higher in the morning Tokyo session, with the Japanese government bond market likely to be supported by safe-haven demand. President Trump said that he plans to impose 25% tariffs Monday on imports of steel and aluminum, Mitsubishi UFJ Morgan Stanley Securities' fixed income strategists note. This could induce a risk-off mood and might be a buying incentive, the strategists say in a commentary. The 10-year JGB futures are 0.05 yen higher at 140.10 yen. (ronnie.harui@wsj.com)

1915 ET - Japanese stocks are lower as uncertainty about higher borrowing costs continues. Also weighing on the market are concerns about trade friction between the U.S. and its trading partners. Trading-house stocks are leading the declines. Mitsubishi Corp. is down 2.1% and Itochu is 2.2% lower. USD/JPY is at 151.72, compared with 151.62 as of Friday's Tokyo stock market close. Investors are closely watching developments over U.S. tariffs and domestic corporate earnings. The Nikkei Stock Average is down 0.4% at 38647.60. (kosaku.narioka@wsj.com; @kosakunarioka)

1901 ET - There are some economists that continue to warn that a cut in interest rates by the Reserve Bank of Australia next week would amount to a bad policy error. Warren Hogan at Judo Bank is key among them, arguing that a consumer recovery is well underway, while business conditions have improved. PMI readings are also rising while input prices for firms are rising, he says. Meanwhile, credit growth is improving, while the Australian dollar is weak. The RBA should be cautious over the months ahead, he adds. (james.glynn@wsj.com; @JamesGlynnWSJ)

1847 ET - Next week's policy meeting at the Reserve Bank of Australia will be among the tensest in living memory. While the case to cut interest rates is strong due to falling core inflation, it's not yet overwhelming given the strength of hiring and evidence that consumer spending is in slow recovery. But the RBA board will be highly conscious of the political consequences of both cutting or not cutting, feeling it is damned to attract waves of criticism. With polls showing support for the ruling Labor Party is fragile at best as voters feel the sting of rising living costs, the RBA's verdict could be key to the election due before mid-May. (james.glynn@wsj.com; @JamesGlynnWSJ)

1843 ET - Japanese stocks may fall as concerns about higher borrowing costs persist. Nikkei futures are down 0.8% at 38520 on the SGX. USD/JPY is at 151.54, compared with 151.62 as of Friday's Tokyo stock market close. Expectations have grown lately for further Bank of Japan rate increases and the Fed to slow its rate cuts. Investors are focusing on any developments over U.S. tariffs as well as domestic corporate earnings. The Nikkei Stock Average fell 0.7% to 38787.02 on Friday. (kosaku.narioka@wsj.com)

1655 ET - The week ahead for money markets in both Australia and New Zealand will be dominated by global events, given an absence of top-shelf economic data for the week ahead. With the focus on the White House, there's scope for more worrying news around trade tensions producing a risk-off tone that will likely see AUD/USD test support around 0.6200. Kristina Clifton, currency strategist at CBA, says the pair could even test 0.6100 over the week. Beyond that, traders will be looking ahead to policy meetings at the Reserve Bank of Australia and the Reserve Bank of New Zealand next week, with both expected to announce interest-rate cuts.(james.glynn@wsj.com; @JamesGlynnWSJ)

1625 ET - It promises to be yet another lively start to the week, with market-moving headlines set to roll in throughout Monday and Tuesday, in a week where U.S. President Trump will be everywhere and all-consuming, says Chris Weston, head of research at Pepperstone. A TV interview to be screened before the Superbowl, a key announcement detailing reciprocal tariff outcomes and meetings with King Abdullah of Jordan, Modi, Zelensky, Putin and possibly Xi, are lined up over the week, he says. Trump will be a constant source of headline risk that could throw markets around, and impact sentiment at a time when many were trying to refocus attention on other market themes, Weston says. The announcement on reciprocal tariffs will perhaps garner the greatest level of attention, with Japan, India, Brazil, Vietnam, China and the EU nations now firmly in the firing line, he adds. (james.glynn@wsj.com; @JamesGlynnWSJ)

(END) Dow Jones Newswires

February 09, 2025 20:46 ET (01:46 GMT)

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