The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
0957 GMT - U.S. Treasury yields decline from recent highs as markets stabilize, though the unresolved Middle East situation continues to leave investors cautious. "Concerns over the duration of the tensions and the absence of meaningful progress toward a diplomatic resolution continued to sustain caution, while prolonged supply disruptions and elevated oil prices fuel inflation expectations," says FXEM's Abdelaziz Albogdady in a note. Recent labor market figures pointed to continued strength in hiring activity, while the Federal Reserve is increasingly expected to raise rates next year, he says. The 10-year U.S. Treasury yield falls 2.6 basis points at 4.642%, according to Tradeweb. (emese.bartha@wsj.com)
0945 GMT - U.K. data suggests inflation would have dropped close to the Bank of England's 2% target without the Iran war, Berenberg's Andrew Wishart says. Headline inflation fell to 2.8% in April, from 3.3% in March. The surge in oil prices since February has added 0.7 percentage points to inflation, wholly explaining why it remains adrift of the target, Wishart says in a note. The drop in services inflation--to 3.2% from 4.5%--will help overcome the perception that the U.K. has a particularly intractable inflation problem, he notes. While headline inflation will continue to rise as higher import prices feed through, if services prices--which the BOE can influence most--continue to behave, the central bank need not raise interest rates, Wishart says. (edward.frankl@wsj.com)
0926 GMT - Default protection costs for Middle East nations' sovereign debt remains fairly high due to concerns about the ongoing U.S.-Iran conflict. Investor are nervous about the impact of the prolonged war on Gulf countries. Bahrain's 5-year credit default swaps trade at 253bps after climbing 5bps to that level on Tuesday, S&P Global Market Intelligence data show. Qatar's 5-year CDS rose to a four-week high of 38bps on Tuesday and remains at that level. (miriam.mukuru@wsj.com)
0923 GMT - The recent selloff in global government bonds offers ideal conditions for the dollar to strengthen, ING's Francesco Pesole says as the dollar reaches a six-week high against a basket of currencies. "Unlike in 2025, this selloff is being driven by inflation concerns rather than fiscal fears, making it unambiguously dollar positive," he says in a note. ING's measure of the dollar's safe-haven appeal is the strongest since late 2022 and the second-highest reading in its dataset dating back to 2005. The dollar could therefore rise further unless genuinely constructive news emerges from the Iran war, he says. The DXY dollar index rises to as high as 99.471. ING expects it to break above 99.500. (renae.dyer@wsj.com)
0922 GMT - The dollar rises to a six-week high against a basket of currencies as markets increasingly bet on the Federal Reserve raising interest rates, MUFG Bank's Derek Halpenny says in a note. "There is scope for yields to move further higher," he says. While the Fed will ultimately raise rates less than many other G-10 central banks, market pricing for rate rises remains relatively low considering the risk of a further jump in oil prices, he says. The Fed's meeting minutes at 1800 GMT could reveal a shift towards a more restrictive stance, he says. Markets price a 70% chance of a 25 basis-point rate rise by year-end, LSEG data show. The DXY dollar index rises to a high of 99.471. (renae.dyer@wsj.com)
0917 GMT - Oil prices extend losses, falling more than 2% in midmorning European trade as the Trump administration continues to pressure Tehran to agree to U.S. demands to end the conflict. Brent crude is down 2.1% to $108.93 a barrel, while WTI futures fall 2% to $102.05 a barrel. Meanwhile, the U.K. government watered down sanctions on Russia, allowing imports of diesel and jet fuel refined abroad from Russian oil to enter the country as the near-closure of the Strait of Hormuz continues to squeeze supply. Earlier this week, the U.S. extended a sanctions waiver allowing countries to purchase Russian oil currently stranded at sea. (giulia.petroni@wsj.com)
0910 GMT - The decline in U.K. inflation in April tells us little about the persistence of the surge in inflation to come, Capital Economics' Ruth Gregory says in a note. Rising oil prices lifted fuel prices, but this was offset by a fall in the utility price cap. Inflation should hover around 3% until July, when the utility price cap rises about 13% on month, Gregory says. If energy prices ease, interest rates should remain at 3.75%, she says. "But the longer energy prices stay high, the more likely second-round effects will be." One or two rate hikes in the coming months are possible if energy prices stay high or rise further, she says. April annual CPI inflation was 2.8%, versus 3.3% in March. (edward.frankl@wsj.com)
0839 GMT - U.K. inflation data for April came in weaker than expected, but it is expected to rise back above 3% due to the effects of high energy prices from the Middle East war, Tickmill Group's Patrick Munnelly says in a note. Annual headline inflation eased to 2.8% in April, from 3.3% in March, below the consensus forecast of 3.0% by economists in a WSJ poll. Monthly headline inflation was unchanged at 0.7% in April, weaker than the consensus forecast of 1%. "Direct and indirect fuel effects from the Iran shock should push CPI back above 3% year-on-year," Munnelly says. (miriam.mukuru@wsj.com)
0828 GMT - Energean cut its dividend of 10 cents per share but is likely to return to 30 cents per share from the second quarter, Berenberg analysts write. The cut should save just under $40 million, they add. The oil-and-gas company, which has operations in the Eastern Mediterranean, cut the dividend due to impact of the shutdown in Israel, where the conflict stopped production at the Karish gas field for 41 days, they say. Shares fall 1.5% to 873 pence. (adam.whittaker@wsj.com)
0826 GMT - The euro falls to a near six-week low against the dollar and faces further declines as markets seem to have raised the bar for trading on positive Middle East headlines, ING's Francesco Pesole says in a note. While the risk of an abrupt euro selloff is more contained due to more balanced positioning, the macro environment has "clearly turned less supportive" for the currency. Market expectations for Federal Reserve interest-rate rises have reversed the tightening in U.S.-eurozone rate differentials that provided a buffer for the euro during the energy crisis, he says. The euro falls 0.2% to a low of $1.1583. "The next support to watch is 1.1570," Pesole says. (renae.dyer@wsj.com)
0821 GMT - U.K. inflation could stay between 3.5% and 4% in the second half of 2026, peaking at just below 4%, ING's James Smith says in a note. Data show annual headline inflation decelerated to 2.8% in April from 3.3% in March, while annual core inflation slowed to 2.5% from 3.1% in March. The figures "should provide some reassurance that the impending energy shock is unlikely to spark a wave of 'second round effects', or at least not nearly as pronounced as four years ago," he says. (miriam.mukuru@wsj.com)
0819 GMT - Ryanair's robust balance sheet and strict cost discipline give it a powerful advantage over peers, Deutsche Bank analysts say in a note. The budget airline will likely exit the current turbulent period in a much stronger competitive position than rivals despite higher-for-longer jet-fuel prices meaning a more subdued outlook for net profit per passenger, the bank says. The stock price has fallen 20% since the Middle East conflict started and is now trading at a discount compared to its usual historical average. The shares look cheap at this price, DB says, keeping a buy rating on the stock. The German bank cuts the target price to 27 euros from 31.50 euros, saying that the share offers potential growth of around 20%. Shares are up 1.4% at 22.67 euros. (anthony.orunagoriainoff@dowjones.com)
(END) Dow Jones Newswires
May 20, 2026 05:57 ET (09:57 GMT)
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