0557 GMT - U.S. Treasury yields fall in Asian trade following last Thursday's weaker-than-expected employment data that led the markets to scale back their expectations of Federal Reserve rate hikes. Brent oil trades marginally lower, just below $72 per barrel, after the Organization of the Petroleum Exporting Countries and its allies decided to increase oil output again as shipping traffic through the Strait of Hormuz gradually recovers. The two-year U.S. Treasury yield declines 0.4 basis points to 4.126%, while the 10-year yield falls 0.6 basis points to 4.472%, according to Tradeweb. (emese.bartha@wsj.com)

0540 GMT - Softer U.S. labor data and better inflation prints have reduced the urgency around further Federal Reserve tightening, but they haven't settled whether growth is slowing in a manageable way or whether policy expectations have moved too far, BNY's Geoff Yu says in a note. "The global narrative is becoming less uniform," the senior EMEA macro strategist says. In the U.S., the question is whether the Fed can stay patient without seeing inflation risks reemerge, he says. In Europe, meanwhile, the debate is moving away from emergency inflation management and back toward growth, fiscal credibility and defense financing, he says. (emese.bartha@wsj.com)

0537 GMT - Higher U.S. Treasury yields are forcing investors to reassess crowded bond exposure, BNY's Geoff Yu says in a note. However, the adjustment is not yet a broad exit from risk, the senior EMEA macro strategist says. "That distinction matters: equities, selective carry and currencies with stronger domestic anchors can still attract capital even as duration remains vulnerable," he says. The 10-year U.S. Treasury yield last trades at 4.472%, down 0.6 basis points, according to Tradeweb. (emese.bartha@wsj.com)

0523 GMT - Morgan Stanley enters short in French government bonds versus an equal-weighted basket of Italian and German peers, pointing to fiscal risks in France. "Fiscal concerns have resurfaced and should remain a source of pressure," they say. In our view, valuations do not yet fully capture political and fiscal risks, and the coming agenda could act as an additional catalyst. (emese.bartha@wsj.com)

0516 GMT - China's consumer price index likely rose modestly in June, according to BofA Securities in a research note. BofA estimates CPI inflation to rise to 1.3% year-over-year in June, from 1.2% in May. This was mainly due to higher vegetable prices offsetting lower pork and fruit prices, the bank says. While oil prices have fallen, their still-elevated year-over-year levels continue to support non-food inflation, BofA says. PPI inflation also likely increased to 4.4% year-over-year in June from 3.9% in May, the bank says. This was supported by firmer producer goods prices, it adds. (tracy.qu@wsj.com)

0508 GMT - Taiwan's June inflation likely remained above the 2% level, which is closely watched by the central bank, for a second consecutive month. Headline CPI likely rose 2.25% on year after a 2.2% gain in May, according to a Wall Street Journal poll of six economists, whose inflation estimates range between 2.1% and 2.4%. Although oil prices have eased, cost pass-through from upstream producers to downstream manufacturers and retailers is expected to persist, DBS economists say in a note. A low base from last year likely also pushed headline inflation higher, Barclays economists said. The inflation print in the next few months will be critical as Taiwan's central bank has tilted slightly hawkish. Both ANZ and DBS expect Taiwan's central bank to deliver a rate hike in September.(sherry.qin@wsj.com)

0503 GMT - The Bank of Japan's output gap estimates for the first quarter showed a stable positive trend, a mechanism that helps drive inflation higher, says SMBC Nikko Securities economist Yoshimasa Maruyama. The reading could be seen as justifying further interest rate hikes, he says. However, the size of the positive gap didn't expand, suggesting there is little immediate need to accelerate monetary tightening, he adds. "Any future need to speed up the pace or increase the scale of additional rate hikes would likely stem from a lagged but pronounced pass-through of inflationary pressures caused by the Middle East situation or rising inflation expectations." (megumi.fujikawa@wsj.com)

0450 GMT - China's export growth likely stay resilient in June, according to BofA Securities in a research note. Higher prices in the tech supply chain continues to lift export values for products like electronic integrated circuits, they say. BofA expects export growth to pick up slightly to 20% on year in dollar terms in June, from 19.4% in May. On the import side, similar tech-price dynamics should support headline strong growth, although lower commodity prices and energy prices following the reopening of the Strait of Hormuz, should provide a partial offset, BofA says. The bank expects the June trade surplus to come in at $128 billion. (tracy.qu@wsj.com)

0449 GMT - Bangko Sentral ng Pilipinas is expected to deliver another 25bp hike in 3Q, followed by a pause through end-2026, UOB analysts say in a note. BSP has tightened policy this year to curb rising inflation driven by higher oil prices and the peso's weakness. The Philippines' economic recovery is losing momentum, with growth slowing amid rising energy costs, weak investment and softer domestic consumption. Ongoing external shocks and governance challenges are likely to weigh on the country's economic outlook and keep growth subdued. With weak growth, BSP's policy adjustments would be gradual, UOB says. (amanda.lee@wsj.com)

0435 GMT - Many central banks in Asia are likely to further tighten their monetary policy in 2H, amid risks driven by El Nino and artificial intelligence, HSBC economists say in a note. In India, El Nino risks are expected to lift food inflation, hitting rural workers and urban informal workers. The Philippines and Thailand are also exposed to such risks, given their reliance on imported fertilizers. Meanwhile, the AI boom's wealth effects, especially in highly exposed economies including Taiwan and South Korea, are widening a K-shaped divide. HSBC expects New Zealand, India, Indonesia, Japan, South Korea, the Philippines, Singapore, Taiwan, and Vietnam to raise their policy rates in 2H.(amanda.lee@wsj.com)

0419 GMT - The yen is likely to weaken further despite its extreme undervaluation, Goldman Sachs analysts say as they cut forecasts for the currency. Intervention has limited depreciation somewhat but can only have a short-lived impact if macro fundamentals continue to push in the other direction, GS says. A backdrop of higher-for-longer U.S. yields, low recession risk, and worries about inflationary/fiscal pressure in Japan amid government stimulus plans and only gradual BOJ tightening argues for continued pressure on the yen. Barring a U.S. growth shock or BOJ pivot toward more aggressive hikes--neither of which appears likely over the coming year--the yen will stay weak. "Therefore, we are revising up our USD/JPY forecast path to 162, 163, 165 (vs. 160, 158, 155 previously)." The dollar was last at 161.79 yen. (fabiana.negrinochoa@wsj.com)

0410 GMT - Thailand's equities are likely to be supported by an improving economic outlook, UOB Kay Hian analysts say, as they keep an optimistic view of the market in July. The Bank of Thailand recently raised its 2026 GDP growth forecast for the country to 2.3% from 1.5%, they note. Inflation remains at an appropriate level and within the BOT's 1%-3% target range. Negative real interest rates are also expected to shift investment flows to the equities market from the government bond market. This offers an opportunity to generate returns higher than the inflation rate.(amanda.lee@wsj.com)