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

1011 ET - The Japanese yen faces choppy trading in coming weeks given the prospect of ongoing swings in risk sentiment following President Trump's decision to impose reciprocal tariffs, Rabobank forex strategist Jane Foley says in a note. The yen remains supported but has eased from recent highs in a sign that safe-haven demand has waned, she says. "Speculation that the economic shock of tariffs could slow the pace of Bank of Japan rate interest hikes this year should temper the pace of yen gains going forward." Markets are likely to remain "jumpy" with the dollar trading between 147-148 yen in coming weeks. The exchange rate falls 0.3% to 147.440, having reached a six-month low of 144.594 Friday, according to FactSet.(renae.dyer@wsj.com)

1004 ET - Some U.S. corporate bonds could be an attractive hedge against recession, Bank of America's Yuri Seliger writes. He says since Liberation Day, bonds rated A have fallen in price faster and BBB ones, which are just a notch above speculative status. That brings the spread ratio between them to "near the lowest levels on record." Seliger says the ratio tends to be higher in periods of market stress and recession fears. "We think rotating into the relatively cheap single-As should be an attractive recession hedge." The narrow spread "suggests single-As should outperform...in most scenarios," he says. (paulo.trevisani@wsj.com; @ptrevisani)

0915 ET - The recent decline in the prices of risky assets could extend further in the near term unless U.S. President Donald Trump warms up to tariff negotiations, Natixis strategists say in a note. The market downturn could lead to a U.S. recession if it continues. "The longer this plays out, the more recession odds drift higher." The price reset could, however, set the stage for a strong risk asset rally in the second half of 2025, Natixis says. Equities recover Tuesday after a string of steep losses following Trump's announcement of sweeping tariffs last week. (miriam.mukuru@wsj.com)

0911 ET - Treasury yields keep rising and the dollar falls as markets seem to take a break from the tariffs panic of the past few days. Stock futures are rising while oil prices recover a bit from very low levels. Trump leaves the door open for negotiations with various countries, partially offsetting rising trade tensions with China. The WSJ Dollar Index is down 0.5% as the greenback weakens 0.5% against the euro and 0.7% versus the yen. The 10-year yield is at 4.230%, the highest so far this month. The two-year is at 3.793%. (paulo.trevisani@wsj.com; @ptrevisani)

0852 ET - "Saying we can just make this in the USA," Wedbush analysts say, understates the complexity of the Asian supply chain and the way goods have been made for US consumers over the last 30 years. In a research note, the analysts describe the latest tariffs as "the biggest debacle ever seen in the markets," because it's purely self-inflicted by President Trump and the logic behind it is miscalculated, they say. "The economic pain that will be brought by these tariffs are hard to describe and can essentially take the US tech industry back a decade in the process while China steamrolls ahead," Wedbush says. (denny.jacob@wsj.com; @pennedbyden)

0851 ET - Italian bank UniCredit is expected to redeem its additional tier 1 $(AT1.AU)$ bond which has a call date on June 3, 2025, ING's Suvi Kosonen says in a note. The bond has underperformed in asset swap terms in the past week and closed above 15% on Monday, ING says. The bank is less likely to issue a new AT1 bond to refinance the upcoming maturity, considering it raised 1 billion euro ($1.09 billion) in AT1 bond supply in February, Kosonen says. "We would expect the bank to continue to cement its strong reputation." (miriam.mukuru@wsj.com)

0825 ET - The U.K.'s treasury chief says she met Bank of England Gov. Andrew Bailey earlier Tuesday, confirming markets are working effectively despite the recent turmoil prompted by U.S. tariffs. "This morning, I spoke to the governor of the Bank of England, who has confirmed that markets are functioning effectively and that our banking system is resilient," Rachel Reeves says to lawmakers. The impact of tariffs has been reflected in the reaction on global markets in recent days, which financial authorities have been monitoring closely, she adds. U.K. bank shares are up in Tuesday trading, after falling sharply since President Trump's tariff announcement. (edward.frankl@wsj.com)

0822 ET - Spain could offer direct cash support to exporters hit heavily by U.S. import tariffs, economy minister Carlos Cuerpo says. President Trump's package of tariffs on European goods will affect the bulk of Spain's more than 18 billion euros in yearly goods exports to the U.S., Cuerpo tells reporters as European leaders scramble to react to the plans Trump unveiled last week. "Around 80% of our exports will be affected by the tariffs already announced or put in place, so we have an initial idea of what the impact will be," Cuerpo says. The government in Madrid is still considering whether its support will include direct aid to affected sectors, Cuerpo adds. The Spanish government last week set out a 14.1 billion euro package to help tariff-hit companies, which will likely include steelmakers and producers of wine and olive oil. (joshua.kirby@wsj.com; @joshualeokirby)

0808 ET - LVMH could face deteriorating trends in the U.S., Barclays analysts write in a note. The analysts expect the French luxury conglomerate to report first-quarter sales of 21.2 billion euros, flat on year. The U.S. market, where demand accelerated in the final quarter of 2024, has probably worsened due to the weaker sentiment resulting from stock market declines and the prospect of a trade war, they say. LVMH seems to be among the least-impacted names by President Trump's tariffs in the luxury space, partly due to the fact that it has part of its manufacturing located in the U.S. However, the indirect impact of duties on U.S. consumer sentiment could depress luxury spending there, the analysts add. Shares are up 1.6% at 515.80 euros. (andrea.figueras@wsj.com)

0806 ET - Tilray Brands, whose cannabis and drinks business straddles Canada and the U.S., says it doesn't anticipate a hit to sales from import tariffs after it conducted an analysis of the potential implications on its business. In the U.S., Tilray says its American beverage brands are solely manufactured and distributed within the U.S. market. In Canada, Tilray's cannabis brands are produced domestically for Canadian consumers. in Europe, Tilray manufactures medical cannabis brands and products for distribution across Europe and Australia. Chairman and CEO Irwin Simon says there continues to be opportunities in the alcohol, cannabis, and wellness industries. Tilray also sees a future in digital currencies and plans to accept cryptocurrency as a payment method online and says it is exploring strategic initiatives related to cryptocurrency. (robb.stewart@wsj.com)

0803 ET - The U.K.'s treasury chief says nothing is off the table in negotiations with the U.S. over tariffs, and that she will "shortly" meet U.S. Treasury Secretary Scott Bessent. "A trade war is in nobody's interests, it is why we must remain pragmatic, cool-headed and pursue the best deal with the U.S. that is in our national interest," Rachel Reeves tells lawmakers. Although she welcomed that the U.K.'s 10% levy on imports was lower than many other nations, additional tariffs on cars, steel, and potentially life sciences pose a challenge as they are some of the country's biggest exports, Reeves says. (edward.frankl@wsj.com)

0742 ET - Germany's latest public-sector salary agreement signals that German negotiated wage growth--which at 6.5% on year in January is above the eurozone average--is set to slow, UBS economists say. The deal translates into average annual wage growth of 2.8% over the next two years, UBS estimates, less than half the 6% wage growth of the 2023 settlement, affecting around 6.5% of German employees directly. Overall, the economists expect German negotiated wage growth to decelerate from its current 32-year high to below 3% in 2025. A potential 17% increase in the minimum wage to 15 euros an hour, which is being discussed in coalition talks, could also affect wage growth ahead, they add. (edward.frankl@wsj.com)

(END) Dow Jones Newswires

April 08, 2025 10:11 ET (14:11 GMT)

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