The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1040 ET - The dollar could advance further over the short term as high energy prices make U.S. interest-rate cuts look increasingly unlikely while rate-hike prospects grow, MUFG analysts say in a note. Federal Reserve minutes Wednesday "will likely reveal a growing opposition to rate cuts." Additionally, with Kevin Warsh due to take over the role as Fed Chair, his first public comments will be crucial, they say. U.S. money markets currently price a 71% chance of a rate hike in January 2027, LSEG data show. Any hint that Warsh is concerned about inflation risks could increase rate-hike expectations and lift the dollar, the analysts say. The DXY dollar index falls 0.2% to 99.083, having risen to a near six-week high of 99.409 overnight. (jessica.fleetham@wsj.com)
0937 ET - Yields on U.K. government bonds, or gilts, fall after the International Monetary Fund indicated that the Bank of England does not have to raise interest rates as they are sufficiently restrictive. "Under the current energy price outlook, holding rates for the remainder of the year should be sufficient to bring inflation back to target by end-2027," the IMF said on its website. However, given the highly uncertain political and geopolitical environment, BOE rate decisions should remain data dependent, IMF said. Two-year gilt yields fall 6 basis points to last trade at 4.485%, having hit a one-week high of 4.573% in morning trade, Tradeweb data show. Ten-year gilt yields fall 6 basis points to 5.100%. (miriam.mukuru@wsj.com)
0921 ET - Oil futures turn lower after spiking overnight on lack of progress toward the reopening of the Strait of Hormuz. President Trump's warning to Iran to move fast on a deal, and fresh drone attacks on the U.A.E. and Saudi Arabia "underscore that the situation on the ground remains as volatile as ever," Nikos Tzabouras of Tradu says in a note. But "the bull run is not without its limits," he adds, noting Trump's preference for a deal that has kept the cease-fire alive, "leaving the door to a diplomatic resolution open." WTI for June delivery is down 1.9% at $103.40 ahead of tomorrow's expiration, with the most-active July contract off 1.4% at $99.65. Brent is off 1.3% at $107.80 a barrel.(anthony.harrup@wsj.com)
0910 ET - Headwinds from Iran are meeting tailwinds from the AI boom, which is "not good weather for bonds," says Generali Investments' Vincent Chaigneau in a note. The recent selloff in bonds isn't just about oil, but inflation is multi-pronged, he says. "We see the AI boom as a positive supply shock that eventually may help contain inflation, but for now it creates a demand shock that is adding to it, not least via memory chip prices," the head of research says. This is compounding the effects of the Iran war, which is a negative supply shock causing energy, food and industrial inflation, he says. In the near term, government bond yields could fluctuate with oil prices, and any sign of Strait of Hormuz reopening would help, he says. (emese.bartha@wsj.com)
0831 ET - U.S. natural gas futures start the week higher with the front-month testing $3 for the first time since the end of March. Technical factors and rising weekend cooling demand forecasts are lifting trader expectations, while LNG feedgas demand remains subdued, Eli Rubin of EBW Analytics says in a note. Speculator short positions are at an 18-month high, making risks of a short squeeze high although "far from a foregone conclusion," he says. Nymex natural gas is up 3.4% at $3.061/mmBtu.(anthony.harrup@wsj.com)
0652 ET - Centrica could have around 500 million pounds it could use to boost shareholder returns, Berenberg analysts write. The company's financial framework should enable it to return just over 1.4 billion pounds to shareholders by 2028, they write. Currently, the analysts expect a cumulative base dividend of just under 900 million pounds. The British energy and services company should return to earnings growth after being hit by falling gas prices, they say. Its improved performance comes as it increases its exposure to regulated or contracted cash flows, they add. The analysts increase the stock's target price to 230 pence, from 190 pence. They reiterate their buy rating. Shares rise 2.3% to 193.60 pence.(adam.whittaker@wsj.com)
0641 ET - Sterling could fall against the dollar if jitters about the Middle East conflict intensify, Monex analysts say in a note. "Ongoing Middle East tensions continue to create a binary risk environment where sterling behaves as a [more-volatile] currency." This is in addition to U.K. political turbulence, which could also weigh on sterling, they say. Sterling rises 0.3% to $1.3359, having hit a near six-week low of $1.3300 overnight. The euro falls 0.15% to 0.8709 pounds. (miriam.mukuru@wsj.com)
0632 ET - U.S. Treasury yields above 4.5% are reaching levels that are high enough to buy, Julius Baer's Dario Messi says in a note. "We view these levels as attractive for gradually extending duration," the head of fixed income says. Julius Baer's base case is that oil prices will ease. Even if higher oil prices persist, however, growth concerns will emerge, limiting the need for interest-rate rises, he says. "This leaves room for yields to reverse from currently elevated levels." The 10-year U.S. Treasury yield last trades at 4.596%, having earlier hit its highest since January 2025 at 4.631%, according to Tradeweb. (emese.bartha@wsj.com)
0623 ET - U.S. Treasury yields retreat from earlier multi-month peaks for now, while the dollar also edges off highs. Persistent Middle East tensions remain a key driver, however, reinforcing demand for the dollar through safe-haven flows and a stronger interest-rate outlook, says Exness' Dat Tong in a note. Prospects of the Strait of Hormuz remaining closed for an extended period, keeping energy prices high, are fuelling inflation worries, the senior financial markets strategist says. The dollar index falls 0.1% to 99.197, having hit a near six-week high of 99.409 overnight. The 10-year Treasury yield last trades up 0.8 basis points at 4.603%, down from 4.631% hit earlier in the day, the highest since January 2025, according to Tradeweb. (emese.bartha@wsj.com)
0619 ET - Palm oil futures closed higher, with the Bursa Malaysia Derivatives contract for August delivery ending 96 ringgit higher at 4,533 ringgit a metric ton. Prices likely tracked overnight gains in rival vegetable oils, say Kenanga Futures analysts in a note. Continued delays to the Strait of Hormuz's reopening due to the Middle East conflict could also support prices, say Kenanga Futures analysts in a note. They peg the support and resistance levels for the August futures contract at 4,400 ringgit and 4,520 ringgit, respectively. (megan.cheah@wsj.com)
0549 ET - Rises in global bond yields remain largely the result of high oil prices, Julius Baer's Dario Messi says in a note. Yields are rising across all maturities as concerns grow about persistent energy-driven inflation, the head of fixed income says. Firmer-than-expected U.S. inflation data last week added to recent pressure on bonds, pushing 10-year Treasury yields back above 4.5%, he says. The 10-year Treasury yield last trades steady at 4.597%, Tradeweb data show. (emese.bartha@wsj.com)
0539 ET - The tightening supply pipeline of China's property sector should help extend the recovery, HSBC Global Research analysts write in a note. Shenzhen's fast-declining inventories are already improving sell-through for premium projects, they add. Sold area has consistently exceeded new starts, rapidly drawing down stock that is under construction but not yet approved for sales, they say. Remaining inventory is increasingly skewed towards completed units and projects yet to commence construction, they add. HSBC Global Research still expects this year to be an inflection point, with prices stabilization and better sales in key cities, they say.(jiahui.huang@wsj.com; @ivy_jiahuihuang)
(END) Dow Jones Newswires
May 18, 2026 10:41 ET (14:41 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments