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

0737 GMT - The dollar is trading steadily as it takes a pause from its recent selloff led by concerns about a slowing U.S. economy. "I'd still be a dollar seller here with the U.S. exceptionalism narrative now dead in the water," Pepperstone strategist Michael Brown says in a note. The dollar is currently not acting like a safe haven given its "huge susceptibility" to tariff headlines that market participants are trying to hedge against, he says. Nevertheless, the extent of the dollar's recent falls means a "pause for breath" cannot be ruled out in the short term, he says. The DXY dollar index is steady at 103.622, having hit a 20-week low of 103.221 on Tuesday. (renae.dyer@wsj.com)

0720 GMT - Debate in Germany's Bundestag on Thursday will probably receive most of the market's attention, say Commerzbank Research's Hauke Siemssen and Erik Liem in a note. The German parliament will start discussions on the proposed debt brake reform regarding defense spending, the special infrastructure fund and relief for the states, the rates strategists say. "From an analytical point of view, incorporating the proposed fiscal changes into our fundamental sovereign scoring model leads to a noticeable weakening of Germany's fundamental stance," they say. This is mostly on the back of higher deficits, higher debt/GDP and higher interest expenditures, they say. (emese.bartha@wsj.com)

0711 GMT - The Federal Reserve's next interest-rate cut isn't likely to come before May or June as the U.S. economy is solid, says Paul Eitelman at Russell Investments. "We see the U.S. economy on a solid foundation as households, businesses, investors, and the Federal Reserve all confront extreme policy uncertainty," the chief investment strategist for North America says. Fed Chair Jerome Powell made it clear that the Committee [FOMC] will wait for more clarity before cutting interest rates again, Eitelman says. "That tees up May or June for the next move lower." The underlying macro fundamentals point to resilient growth and moderating inflation, which supports the baseline case for two or three rate cuts later this year, Eitelman says. (emese.bartha@wsj.com)

0653 GMT - The Nikkei Stock Average closed 0.1% lower at 36790.03 as declines in auto and electronics stocks offset gains in financial and railway shares. Nissan Motor dropped 3.9% and Murata Manufacturing shed 3.8%, while Rakuten Bank climbed 5.6% and East Japan Railway gained 3.0%. The broader Topix index rose 0.1% to 2698.36. Investors' focus remained on U.S. trade and foreign policies. USD/JPY was at 147.65, compared with 148.25 as of Wednesday 5 p.m. ET. The 10-year Japanese government bond yield rose 2 basis points to 1.540%. (kosaku.narioka@wsj.com; @kosakunarioka)

0652 GMT - South Korean shares edged lower after erasing early gains, with the benchmark Kospi down 0.05% at 2573.64. Losses in battery and chemical stocks outweighed gains in shipbuilding and defense shares. Foreign and retail investors were net sellers. Electric-vehicle battery makers Samsung SDI and LG Energy Solution retreated 4.2% and 2.3%, respectively. Chemical company LG Chem lost 3.4%. Meanwhile, ship-engine maker HD-Hyundai Marine Engine rose 4.9% after a new contract win. Armored-vehicle maker Hyuyndai Rotem climbed 10%, leading a rally in defense shares. USD/KRW settled 0.2% higher at 1,453.80 in Seoul onshore trading. South Korea's 10-year government bond yield was up 0.5 basis point at 2.768%. (kwanwoo.jun@wsj.com)

0650 GMT - ​Weakness in German Bunds has further to go, say analysts at RBC Capital Markets. They think the 10-year Bund yield can rise above 3% by the end of the year; it closed at 2.885% on Wednesday, according to Tradeweb. "Our new growth view is also supportive of our higher than consensus view on inflation, although we plan to focus more on the inflation view in future notes," they add. RBC Capital Markets has also become bearish on the U.S. economy, positioning for the 10-year U.S. Treasury-German Bund yield spread to tighten, they say. The 10-year U.S. Treasury-German Bund yield spread is 141.5 basis points, according to LSEG data. (emese.bartha@wsj.com)

0636 GMT - Nothing stands in the way of another interest-rate cut by the Federal Reserve in June, MainSky Asset Management's Eckhard Schulte says in a note. "This is all the more true given that the Fed already focuses more on growth than inflation dynamics when making interest rate decisions," the chairman of the board says. With an expected decline in GDP in the first quarter to approximately 1%, well below potential growth, the Fed sees confirmation that monetary policy is still restrictive, and no longer consistent with the slowdown in growth, Schulte says. "Further interest rate cuts will follow in the second half of the year." Money markets price the next Fed rate cut for June, according to LSEG data. (emese.bartha@wsj.com)

0555 GMT - The yen strengthens against G-10 and Asian currencies in the afternoon session on the prospect of narrowing interest-rate gaps between Japan and most other countries like the U.S. The Bank of Japan continues its monetary-tightening path, especially as inflation stays above target levels for longer than expected, XS.com's Rania Gule says in an email. Expectations of a BOJ rate hike have kept JGB yields elevated, boosting demand for the yen, senior market analyst says. Meanwhile, the Fed seems to be taking the opposite approach amid rising bets that the U.S. central bank will cut rates multiple times this year to counter a potential economic slowdown, the analyst adds. USD/JPY falls 0.3% to 147.75; AUD/JPY drops 0.6% to 93.13. (ronnie.harui@wsj.com)

0550 GMT - India's latest consumer inflation data make an easy case for monetary easing, Nomura analysts say. Consumer inflation moderated more than expected in February, undershooting the RBI's 4% midpoint target, Sonal Varma and Aurodeep Nandi say in a note. Expecting the benign readings to continue, current policy rates look restrictive against a backdrop of low inflation and below-trend economic growth, they add. Further easing by the central bank toward neutral and then accommodative territory is likely. The analysts continue to pencil in 75bp of further cuts to a terminal rate of 5.50% by end-2025, with the next reduction coming in April. (fabiana.negrinochoa@wsj.com)

(END) Dow Jones Newswires

March 13, 2025 03:37 ET (07:37 GMT)

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