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

2138 ET - Australia's 4Q24 GDP forecasts are at risk of being downgraded after private business investment for the quarter were lower than expectations. Capital expenditure saw a 0.2% on-quarter decline compared with an expected rise of 0.5%, according to a consensus from Bloomberg. The decline was driven by equipment and machinery investment, which fell 0.8% on quarter and was broad-based across both mining and non-mining investment. Forward-looking measures of investment intentions also eased. Andrew Boak, chief economist at Goldman Sachs, says his GDP growth forecasts for the quarter remains unchanged at 0.5% while seeing risks skewed to the downside. (james.glynn@wsj.com; @JamesGlynnWSJ)

2114 ET - Asian currencies consolidate against U.S. dollar in Asia's morning session. Markets can't rule out the likelihood of more U.S. tariffs next week, DBS Group Research's Philip Wee says, pointing to President Trump hinting at another potential delay to the 25% tariffs on Mexico and Canada. It isn't a matter of if the tariffs will arive, but rather when, says the senior FX strategist in commentary. In addition, uncertainties surrounding Trump's plan to restore peace in Ukraine remain high, Wee says. "Overall, the combination of trade and geopolitical uncertainties should eventually result in the USD becoming a haven again," Wee adds. The USD Index is 0.2% higher at 106.59; AUD/USD is little changed at 0.6304; USD/CNH is steady at 7.2681. (ronnie.harui@wsj.com)

2056 ET - The Australian dollar may extend a downtrend against the Japanese yen, partly based on technical analysis, Oanda's Kelvin Wong says in an email. The currency pair's daily moving average convergence indicator, which has been trending downward since October, broke below MACD's centerline in November, and signaled an impending bearish crossover below the centerline recently, the senior market analyst notes. These observations suggest AUD/JPY's downtrend since November may extend further, Wong says. Major support is pegged at 93.65, representing the lower boundary of long-term ascending channel from the March 2020 low, Wong adds. AUD/JPY is 0.2% higher at 94.18. (ronnie.harui@wsj.com)

1952 ET - The Nikkei Stock Average is up 0.4% at 38304.21, led by gains in trading houses and carmakers, despite some losses in retailers. Itochu is up 5.0% and Nissan Motor is 4.2% higher. Meanwhile, Seven & i Holdings is down 11% after the founding family failed to secure financing for a management buyout. USD/JPY is at 149.09 compared with 149.57 as of Wednesday's Tokyo stock market close. Investors are focusing on any developments in U.S. trade and foreign policies. (kosaku.narioka@wsj.com; @kosakunarioka)

1948 ET - The yen strengthens slightly against most G-10 and Asian currencies in the early Asian session ahead of key Japanese economic data due Friday. Tokyo CPI is a good leading indicator of nation-wide CPI, CBA's Kristina Clifton says in a research report. Sustained stronger inflation in Japan could encourage markets to more fully price in a 25bp rate increase by the Bank of Japan in July, says the member of CBA's Global Economic & Markets Research team. USD/JPY is 0.1% lower at 149.01; AUD/JPY edges down 0.1% to 93.94; EUR/JPY is 0.1% lower at 156.21. (ronnie.harui@wsj.com)

1932 ET - South Korea's benchmark Kospi falls 0.6% to 2626.78 in early trade, as financial, auto and semiconductor stocks retreat. Foreign and institutional investors are net sellers. KB Financial Group and Woori Financial Group fall 3.0% and 3.1%, respectively. Carmaker Hyundai Motor retreats 2.4%. Memory-chip maker SK Hynix, which offered bonus shares to its employees, is down 0.7% after giving up its opening gains fueled by client AI-chip giant Nvidia's overnight rally on Wall Street. USD/KRW is 0.1% higher at 1,434.65 in Seoul onshore trading. South Korea's 10-year government bond yield is down 4.5 bps at 2.752%.(kwanwoo.jun@wsj.com)

1925 ET - JGBs are mixed in the morning Tokyo session but may track overnight price gains in U.S. Treasurys. Both JGBs and Treasurys tend to move in tandem. More tariff threats from President Trump on Wednesday could also spur fears that the tariffs may hurt economic growth, which are usually supportive of the haven allure of government bonds. The Finance Ministry's auction of 2.6 trillion yen in two-year sovereign notes today may also garner demand from investors. The 2-year JGB yield is unchanged at 0.795%; the 10-year yield is up 0.5bp at 1.370%.(ronnie.harui@wsj.com)

1922 ET - Amid signs that business confidence is lifting, New Zealand's economy remains on a path to recovery as interest rates fall and commodity export prices outperform expectations, says Sharon Zollner, chief economist at ANZ. It seems clear from a wide range of indicators that the economy returned to positive growth in the last three months of last year, she adds. Whether that growth falters or strengthens is a point of debate and will depend on whether households view interest rates as high or low; whether global uncertainty will constrain investment and employment; whether firms take a "get on with it" attitude; whether skill shortages will be a meaningful constraint on expansion, she adds. (james.glynn@wsj.com; @JamesGlynnWSJ)

1846 ET - Japanese stocks may decline as uncertainty over U.S. tariffs and domestic borrowing costs continue. Nikkei futures are down 0.2% to 38120 on the SGX. USD/JPY is at 148.92, compared with 149.57 as of Wednesday's Tokyo stock market close. Investors are focusing on any developments in U.S. trade and foreign policies. The Nikkei Stock Average fell 0.2% to 38142.37 on Wednesday. (kosaku.narioka@wsj.com)

1839 ET - U.S. consumer inflation expectations increased sharply in February. Both the University of Michigan and Conference Board surveys show a significant lift in inflation expectations in the month. Inflation expectations are higher for the next year and the following five years. Consumers note that concerns around tariffs and a trade war have lifted expectations for inflation. Kristina Clifton, economist at CBA, says that if higher inflation expectations are sustained, the FOMC may be reluctant to lower interest rates much further. Still, the FOMC is also cognisant that higher prices reduce purchasing power and spending, she says. If lower spending reduces employment, rate cuts may still occur, Clifton adds. ( james.glynn@wsj.com ; @JamesGlynnWSJ)

1829 ET - AUD/USD has struggled since Donald Trump won the U.S. election in November given that the new administration represents a heightened risk of a trade war, says Kristina Clifton, economist at CBA. China's response to the trade war will be important for the outlook for AUD too, she adds. The annual session of China's National People's Congress is scheduled to open on Wednesday and there's strong expectation that it will announce an increase in government spending to help counteract the impact of higher tariffs on U.S. imports from China, she adds. An unexpectedly large increase in spending would strengthen AUD, NZD and CNH, Clifton says. (james.glynn@wsj.com; @JamesGlynnWSJ)

1631 ET - The two-year Treasury yield settles at 4.071%, its lowest level since Oct. 24, according to Tradeweb data tracking the 3 p.m. level. The benchmark has been trading below its 200-day average since last week, as concerns about sticky inflation gave way to fears the U.S. economy might be cooling faster than previously thought. The 10-year yield, in turn, settled at 4.248%, the lowest since Dec. 10, just four basis points above the 200-day average. Markets are pricing two or more Fed cuts this year and will watch activity and inflation indicators due tomorrow and Friday to fine tune the outlook. (paulo.trevisani@wsj.com; @ptrevisani)

(END) Dow Jones Newswires

February 26, 2025 21:38 ET (02:38 GMT)

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