The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
0810 ET - Pressure is building on long-dated global bonds as markets come to terms with a more persistent and entrenched energy supply shock, Federated Hermes' Mitch Reznick says in a note. "What initially appeared to be a shift in inflation expectations is now feeding directly into realised inflation, reinforcing the view that central banks will need to keep policy tighter for longer to restore price stability," the head of fixed income says. Federated Hermes sees an unusually strong linkage between oil prices and global rates, reflecting how broad-based and borderless this shock has become, he says. "The result is a coordinated move higher in yields, with some jurisdictions--notably the U.K. and Japan--feeling the strain more acutely." (emese.bartha@wsj.com)
0737 ET - The euro could come under pressure if the European Central Bank raises interest rates less than markets anticipate, Rabobank's Jane Foley says in a note. Weak eurozone purchasing managers' data Thursday cast doubts on whether the ECB needs to raise rates as much as expected, she says. Market pricing implies at least two 25 basis-point rate rises by December, LSEG data show. There is a risk of just one rate rise this year, Foley says. The euro falls 0.2% to $1.1610. Rabobank expects the euro to reach $1.15 in coming weeks if there is no U.S.-Iran peace deal. Even with a deal, Rabobank thinks slower eurozone growth would prevent the euro from reaching $1.20 this year. (renae.dyer@wsj.com)
0736 ET - The latest U.K. purchasing managers' survey highlights the headwinds facing sterling, Monex Europe strategist Barry van der Laan says in a note. The composite purchasing managers' index fell to a 13-month low of 48.5 in May from 52.6 in April as the Iran war and U.K. political uncertainty weighed on confidence. "The composite collapse and explicit political uncertainty premium in the services data add to the sterling-negative factors and go way beyond an energy shock," van der Laan says. The bind of stagflation--weak growth combined with elevated inflation--facing the Bank of England has tightened sharply, he says. Sterling is steady at $1.3433. The euro falls 0.1% to 0.8640 pounds. (renae.dyer@wsj.com)
0728 ET - Confidence among Canada's small and midsized firms drops sharply in May to a one-year low, reflecting worries about higher energy costs. A confidence index produced by the Canadian Federation of Independent Business falls to 46.3, down from 58 in April. The federation cites elevated fuel costs, weaker demand and expectations that their input costs will rise as reasons for the drop in confidence. More important for the Bank of Canada, the surveyed firms expect to raise their prices by 3.1%--the second straight month of an average 3%-plus jump. The BOC sets rate policy to achieve 2% inflation, and headline CPI accelerated to 2.8% in April. Economists expect CPI to peak in May, at over 3%. (paul.vieira@wsj.com; @paulvieira)
0625 ET - Palm oil futures closed lower, with the Bursa Malaysia Derivatives contract for August delivery closing 126 ringgit lower at 4,457 ringgit a metric ton. Prices likely faced pressure by softer trading in rival vegetable oils overnight, as optimism around a potential U.S.-Iran deal eased Middle East risk premiums and likely capped gains in the broader oil complex, say Kenanga Futures analysts. Concerns over weaker export demand and continued profit-taking could have also pressured prices, they say. (megan.cheah@wsj.com)
0615 ET - The dollar is showing resistance to any headlines signalling the prospect of a de-escalation in the Iran war, ING's Francesco Pesole says in a note. "As President Trump claims negotiations are in their final stages, the FX market is trading a de-escalation with much more cautiousness than two weeks ago." Expectations that the Federal Reserve will raise interest rates also make it harder to bet against the dollar, he says. The dollar's contained reaction to Trump's comments leaves more scope for weakness if a deal is agreed. However, it also confirms thinner market patience and another period of stalled negotiations could take the DXY dollar index above 99.50 even without fresh military action, he says. The DXY trades up slightly at 99.151. (renae.dyer@wsj.com)
0606 ET - U.S. Treasury yields and the dollar rise slightly in European trade. "Sentiment remained cautious in the face of the limited progress in the Middle East," says DHF Capital S.A's Bas Kooijman in a note. In the Federal Reserve's latest meeting minutes, policymakers expressed growing concern that elevated oil prices could sustain inflationary pressures, he says. "As a result, Treasury yields could remain elevated, supporting the dollar." The two-year yield is up 2.2 basis points at 4.059%, while the 10-year yield rises 0.6 basis points to 4.575%, according to Tradeweb. The DXY dollar index edges up marginally to 99.136. (emese.bartha@wsj.com)
0549 ET - Shares of two Chinese shipping container firms fell after they issued statements in response to charges by the U.S. Justice Department. China International Marine Containers fell 10% in Shenzhen and Singamas Container Holdings lost 14%. The DOJ said Tuesday that it indicted four shipping container manufacturers, including CIMC and Singamas, alleging that they conspired to restrict the output and fix prices of shipping containers for at least four years. The firms added that business operations remain unaffected and will respond to the charges in due course. (jason.chau@wsj.com)
0534 ET - Asia's nontech exports remain at risk if geopolitical tensions escalate, Morgan Stanley says in a research note. In that scenario, oil prices could exceed $150 a barrel and remain elevated for several months, which would trigger a global recession, MS says. Pricing could also remain elevated for other materials critical to the supply chain, including petrochemicals, fertilizers, plastics and inputs for semiconductor manufacturing, MS says. "While this will create a dent in the near-term growth momentum, we think that the structural drivers to the capital expenditure and industrial cycle will mean that nontech exports will stage a quick and strong rebound from the trough," MS says. (tracy.qu@wsj.com)
0523 ET - Oil prices slip in volatile trade, with Brent crude falling 0.2% to $104.76 a barrel and WTI futures down 0.1% to $98.11 a barrel. Both benchmarks were up more than 1% earlier in the session. "The oil market remains overly sensitive to Iran-related headlines, with participants continuing to pin considerable hope on reports that talks between the U.S. and Iran are progressing," analysts at ING say. "We've been in this situation multiple times before, which ultimately led to disappointment." While a peace deal and reopening of Hormuz could initially trigger a surge in supply from tankers already loaded and awaiting departure, a full normalization would likely take months due to disrupted logistics, rerouted shipping flows and depleted inventories, market watchers say. (giulia.petroni@wsj.com)
0508 ET - Sterling edges lower against the dollar after data showed U.K. private sector business activity swung into a contraction in May. The composite purchasing managers' index fell to a 13-month low of 48.5 in May from 52.6 in April, according to S&P's flash estimate. A level below 50 signals a contraction while a level above that indicates growth. "The U.K. economy is facing a perfect storm, as rising political uncertainty adds to the growing impact from the war in the Middle East," S&P economist Chris Williamson says in the survey. Sterling falls to $1.3430 after the data, from $1.3444 beforehand. The euro is little changed at 0.8652 pounds as eurozone PMI data earlier were also weak. (renae.dyer@wsj.com)
0435 ET - Oil is likely to trade meaningfully lower later this year, as the current crisis should follow the historical pattern of a short-lived but intense price shock, Norbert Rücker of Julius Baer says. Traffic through the Hormuz Strait is picking up again, adds the head of economics and next-generation research. Over the past two weeks, several very large crude carriers, alongside smaller vessels and liquefied-natural-gas tankers, have exited the Gulf and are continuing their journey toward Asia, he notes. Although traffic remains at a fraction of preconflict levels, these flows marginally alleviate the supply shock, he adds. The world economy is also proving resilient, helped by the fact that the trade resumption has eased the logistics and refining markups, as well as fuel prices, except in the U.S. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
(END) Dow Jones Newswires
May 21, 2026 08:10 ET (12:10 GMT)
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