Morning Briefing

Latest edition · August 14, 2026

Morning Briefing G10 FX traction with bond differentials waning

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.

In this daily briefing, Société Générale notes that softer US inflation data (July CPI at 3.4% yoy, core at 2.5%) supported a temporary bull steepening of the US yield curve, but global bond rallies quickly faded. Major G10 currencies like the JPY, CHF, SEK, and NZD have failed to capitalize on tighter 2-year spreads against USTs, hampered by persistent Japanese capital outflows and prevailing carry demand. In emerging markets, the South African rand and Chinese yuan posted solid gains, while the Brazilian real lagged due to domestic election and fiscal uncertainty.

Key takeaways from the latest edition

• 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.

What this series covers

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

Edition archive

• Morning Briefing G10 FX traction with bond differentials waning

  August 14, 2026

• Morning Briefing UK growth resilient, Norges Bank set for hawkish hold

  August 13, 2026

• Morning Briefing US CPI corner turned

  August 12, 2026

• Morning Briefing Pressure off Fed after employment shrinks

  August 10, 2026

• Morning Briefing - Buyers strike

  July 22, 2026

• Morning Briefing - Yields gap on $90 oil

  July 20, 2026