Société Générale Morning Briefing: G10 FX Dynamics, Yield Curve Shifts & Capital Outflows (August 14, 2026)

Société Générale reports that G10 currencies are largely decoupling from narrowing 2-year UST yield differentials as carry trade momentum dominates. Meanwhile, moderating US inflation provided only brief duration relief as bond markets maintain a defensive stance amid supply and fiscal pressures.

Key Takeaways

• 1.G10 FX pairs remain largely unresponsive to narrowing 2-year sovereign yield differentials against US Treasuries, with carry remaining the predominant market theme.
• 2.Softer US July CPI and PPI prints offered brief respite for global bond duration, but the quick fade in Treasury gains highlights continued caution amid fiscal deficit and energy price concerns.
• 3.Japanese investors recorded massive portfolio outflows of ¥1.63tn in foreign bonds and ¥964bn in overseas equities last week despite speculation of faster BoJ rate hikes.

Table of Contents

• OVERNIGHT NEWS
• CALENDAR
• MARKET REVIEW
• The week in review
• TECHNICAL ANALYSIS

Report data

Chart of the day: No joy for JPY, CHF, SEK and NZD this month despite tighter 2y spread vs UST. Positive correlation for CAD and AUD.

Reports in this series

Morning Briefing is shown in chronological order through this edition, published on August 14, 2026.

Part of the Morning Briefing series — view all 8 editions

Looking for the latest edition? Morning Briefing Markets to look past NFP (Sep 4, 2026)

1. Jul 9Morning Briefing - Back where we started
2. Jul 20Morning Briefing - Yields gap on $90 oil
3. Jul 22Morning Briefing - Buyers strike
4. Aug 10Morning Briefing Pressure off Fed after employment shrinks
5. Aug 12Morning Briefing US CPI corner turned
6. Aug 13Morning Briefing UK growth resilient, Norges Bank set for hawkish hold

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