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

0943 GMT - As investors reprice the risk of U.S. capital, the term premium--the additional yield investors demand to hold a long-dated bond rather than a short-dated one--has climbed to the highest in over a decade, says Pictet Asset Management in a note. The asset manager calculates that the premium could rise at least another 25 basis points from the current level. "Calculating it is a complex task as it encompasses several different factors ranging from market sentiment and monetary policy to political uncertainty," it says. The 10-year U.S. Treasury yield trades flat at 4.303%, according to Tradeweb data. (emese.bartha@wsj.com)

0941 GMT - Canada's retail sales data later could come in weaker than expected, potentially weakening the Canadian dollar, Monex Europe analysts say in a note. The February retail sales data coincided with an escalation in U.S.-Canada trade tensions and the end of the goods and services tax holiday so risks are skewed towards a weaker reading, they say. This could dent the Canadian dollar's recent strength, leaving it trading at levels "better reflective of our view on the headwinds facing the Canadian economy." The data are due at 1230 GMT and are expected to show a 0.4% fall in sales in February, according to a WSJ survey of economists. The U.S. dollar rises 0.2% to 1.3889 Canadian dollars. (renae.dyer@wsj.com)

0925 GMT - American chip makers stand to benefit if China follows through on reported considerations to exempt tariffs on certain chips, Citi analysts say. The development comes after an industry group released guidance on declaring the origin of semiconductor imports. According to local media reports, industry sources said eight semiconductor and related products would have a 13% value-added tax rather than a 125% tariff. "The exemption, if true, would remove the cost disadvantage on U.S. integrated device manufacturers," the analysts say. Citi backs its view that the tariff impact on American central processing unit and analog vendors would be limited, given a lack of local alternatives. However, China's localization of mature chip manufacturing will likely continue to accelerate given growing supply uncertainties, they add. (sherry.qin@wsj.com)

0919 GMT - The cost of insuring euro-denominated credit against default using credit default swaps declines as market sentiment improves following Thursday's stronger-than-expected results by U.S. tech giant Alphabet. "Alphabet's results helped maintain the positive tone in markets," IG's Chris Beauchamp says in a note. The iTraxx Europe Crossover index which tracks euro junk bond credit default swaps falls 4 basis points to 341bps, S&P Global Market Intelligence data show. The iTraxx Europe Main index which tracks euro investment grade CDS declines 1bp to 66bps. (miriam.mukuru@wsj.com)

0903 GMT - China is setting the stage for incremental support amid trade tensions, Citi economists write in a note. The Politburo held its first meeting since this month's escalation in tariff tensions. As Citi expected, policymakers reiterated a policy framework of "high-quality development," with no signs of any intentions to implement "bazooka-style" stimulus. The readout characterized the trade dispute as "international economic and trade combat," but there were no signals on negotiation tactics or plans to engage with the U.S. Instead, the meeting was very domestically oriented, Citi notes. Policymakers also pledged to step up more proactive macro policies and underscored both fiscal and monetary policy, the bank says. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

0851 GMT - Chinese monetary easing is still on the way and existing plans for fiscal spending should be accelerated, Capital Economics analysts write in a note. The April Politburo meeting notes reserve policies would be implemented as needed, signaling that authorities are ready to provide more support if U.S. tariffs end up being worse than expected, they say. The communique acknowledged that external shocks have intensified and that officials should have contingency plans in place for the worst-case scenario--potentially a hard decoupling with the U.S. That said, the readout indicates Beijing's confidence that progress has been made on boosting the Chinese economy, Capital Economics says. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

0847 GMT - The Swiss franc stays weaker after Swiss National Bank Chair Martin Schlegel said the central bank is willing to cut interest rates further and use currency interventions if necessary. Speaking at an ordinary General Meeting of Shareholders of the SNB, he said uncertainty surrounding U.S. tariffs is "very high" but an economic slowdown cannot be ruled out. "The SNB must always adapt to new situations and address their impact," he said. If rates and the franc aren't compatible with ensuring price stability over the medium term, "we adjust them accordingly." However, the SNB doesn't target a specific exchange rate, he said. The euro rises 0.1% to 0.9436 francs, little changed from 0.9440 before the speech. (renae.dyer@wsj.com)

0842 GMT - Singapore could lower its 1Q economic growth estimate following the manufacturing output miss in March, OCBC's Selena Ling writes in a note. Manufacturing output rose 5.8% on year, but it fell 3.6% on a seasonally adjusted monthly basis, shrinking for the second straight month, the chief economist notes. Singapore's advance 1Q GDP growth estimate of 3.8% had factored in 5% growth in the manufacturing sector, Ling says. March's industrial output miss implies a potential downward revision in the manufacturing growth to just 4%, which may result in 1Q GDP growth of around 3.6%, she adds. (amanda.lee@wsj.com)

0830 GMT - Most sovereigns are expected to withstand the initial effects of U.S. tariffs in line with their current levels of creditworthiness, S&P Global Ratings' Roberto Sifon-Arevalo says in a note. Secondary effects, however, such as lower economic activity, lower commodity prices and elevated funding costs--could take a toll on credit quality over the next few months, the managing director says. S&P Global Ratings expects high market volatility and uncertainty owing to trade tensions to threaten the outlook for global economic growth. However, the U.S. administration's announced tariffs, if implemented, will not affect all sovereigns equally, S&P Global Ratings says. (emese.bartha@wsj.com)

0803 GMT - The number of U.K. businesses in 'critical' financial distress rose 13.1% in the first quarter, according to Begbies Traynor's latest Red Flag Alert study. The areas of greatest concern are consumer-facing sectors, with bars and restaurants up 31.2%, travel and tourism rising 25.5%, and general retailers up 12.4%. More importantly, three of the U.K.'s bellwether sectors, real estate and property services, construction, and general retailers, represented over a third of companies in this situation, reflection uncertain economic conditions, the report says. "If the current pressures on businesses do not ease over the next 12 months, Red Flag Alert's data points to a large number of these critically distressed businesses progressing towards formal insolvency," Begbies Traynor says. (anthony.orunagoriainoff@dowjones.com)

0755 GMT - Yields on U.K. government bonds rise modestly following above-forecast retail sales data for March, which could dim prospects of the Bank of England speeding up interest-rate cuts. Monthly retail sales rose 0.4%, stronger than the consensus forecast of a 0.4% contraction by economists in a WSJ poll. "Despite ongoing economic pressures, consumer resilience appears to have held up, offering a timely lift for the sector as we head into the spring season," says Ebury's Phil Monkhouse. Trade tensions cloud the outlook, however, he says. The 10-year gilt yield rises 1 basis point to last trade at 4.509%, Tradeweb data show. (miriam.mukuru@wsj.com)

0735 GMT - The euro could extend its fall against the dollar if U.S. equities continue to edge higher on optimism over easing trade tensions, ING's Chris Turner says in a note. The dollar is continuing its positive correlation with the U.S. equity market. A further modest advance in U.S. equities could send the euro back to the $1.1250 area, he says. However, structural dollar sellers could re-emerge at this level if concerns resurface among investors that the dollar's status as a reserve currency has been permanently damaged, Turner adds. The euro falls 0.2% to $1.1362. (renae.dyer@wsj.com)

(END) Dow Jones Newswires

April 25, 2025 05:43 ET (09:43 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.