The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
0856 ET - Sterling should remain resilient to the re-escalation in the Middle East conflict if markets remain optimistic that tensions won't last, UBS Global Wealth Management analysts say in a note. Front-end rate differentials have moved in sterling's favor since early last week, they say. However, prolonged escalation is a risk. "In this scenario, [U.K. government bonds] could continue to sell off to the point where, in combination with the negative growth shock, the fiscal trajectory really does become problematic." For now, gilt yields haven't risen to an extent that could erode fiscal headroom, they say. The euro falls 0.2% to a one-year low of 0.8513 pounds. UBS expects it reach 0.8500 at the end of third quarter and the year. (renae.dyer@wsj.com)
0849 ET - An artificial intelligence bubble is seen as the biggest tail risk event by 45% of investors in the Bank of America global fund manager survey for July. A tail risk event is one that has a low probability of happening, but could have a big impact if it occurred. A second wave of inflation is ranked as the second biggest tail risk event according to 26% of fund managers. Another 14% of investors in the survey cite a "disorderly rise in bond yields" as the biggest tail risk event. The survey was conducted between July 2 and July 9. (miriam.mukuru@wsj.com)
0650 ET - Palm oil edged lower amid ample supply. While geopolitical tensions in the Middle East has again escalated, palm oil supply is ample, weighing on the vegetable oil's prices, Nanhua Futures says in a note. However, in the mid- and long-term, supply is expected to be tight due to a likely strong El Nino event, they say. Malaysia's palm oil exports during the July 1-15 period are estimated to have risen 4.0% on month to 646,438 metric tons, cargo surveyor AmSpec Agri Malaysia said Wednesday. The Bursa Malaysia Derivatives contract for September delivery ended 4 ringgit lower at 4,569 ringgit a ton. (sherry.qin@wsj.com)
0630 ET - Despite eurozone industrial production proving resilient since the Iran conflict began, the sector remains structurally imbalanced, Jack Allen-Reynolds at Capital Economics says in a note. Industry in the 21-nation currency area has been in decline since before the pandemic, he says, noting a significant divergence between sectors. "Its performance is "K-shaped": output in high-tech and defense industries is rising whereas it is falling in most other sectors," Allen-Reynolds says. Most traditional manufacturing sectors remain in structural decline, weighed down by high energy costs and competition from China, he says. "And we doubt that any changes to EU trade policy in the near term will make a substantial difference," Allen-Reynolds says. (don.forbes@wsj.com)
0627 ET - U.S. Treasury yields rise as the collapse of the ceasefire between the U.S. and Iran pushes oil prices higher. Yields reverse direction after Tuesday's decline prompted by lower-than-expected inflation in June. "Importantly, the details of the [CPI] report were encouraging beyond the energy-driven decline in headline inflation," says Pimco economist Tiffany Wilding in a note. "Evidence of AI-related cost pass-through remained mixed," she says. The 10-year U.S. Treasury yield rises 2 basis points to 4.604%, according to Tradeweb. The U.S. dollar stays stable, with the DXY index at 100.974. (emese.bartha@wsj.com)
0617 ET - Eurozone industry continues to show its resilience to the U.S.-Iran conflict, likely providing a modest boost to GDP in the second quarter of the year, Oxford Economics' Iain Simmons says in a note. Production overall declined 0.2% on month in May, but excluding a large 5.2% negative Irish contraction, output overall rose 0.3%, he says. However, part of the strength appears concentrated in precautionary stockbuilding--such as in chemicals, refineries and plastics--and in the Dutch semiconductor machinery industry, rather than reflecting broad-based improvements, Simmons says. "Continued disruption to the fragile ceasefire could also test this resilience," he adds. (edward.frankl@wsj.com)
0614 ET - A net 4% of investors polled in Bank of America's global fund manager survey for July expect lower global inflation. This is a big flip from June when net 45% expected higher inflation, it says. Inflation expectations were lowered as the fund manager survey's year-end oil price forecast slumped 17% to $71 per barrel from $86 per barrel in June on a weighted-average basis. Just 2% of investors expect oil to trade above $90 per barrel. The outlook on rates fell alongside the inflation outlook, with a net 1% expecting higher short-term rates, down from 34%, BofA says. The survey was conducted between July 2 and July 9. Oil prices have risen since then due to renewed Middle East tensions, with Brent crude last at $85.67. (emese.bartha@wsj.com)
0554 ET - Eurozone industrial production was weaker than expected in May, with Ireland the key culprit, Pantheon Macroeconomics' Claus Vistesen says in a note. Output fell unexpectedly by 0.2% on month, after a 0.3% increase in April. Production in Ireland fell 5.2%, while it grew 0.8% in Germany and 1.2% in Spain. However, the small overall decline in May does not change the outlook for a modest increase in production in the second quarter, Vistesn says. Survey data has remained resilient, with the manufacturing output PMI edging up to 51.7 in June from 51.3 in May. "We think the official data will show that output rose slightly at the end of 2Q, lifting production over the quarter as a whole by just under 1%," he says. (edward.frankl@wsj.com)
0520 ET - The Canadian dollar could fall if the Bank of Canada dampens expectations for an interest-rate rise this year in a decision at 1345 GMT, MUFG Bank's Derek Halpenny says in a note. The BOC could signal that it will keep rates on hold, pushing back against market pricing for a rate increase by year-end, he says. BOC Governor Tiff Macklem could acknowledge the risk of higher inflation due to the Iran war conflict but will also likely signal scope to wait given current relatively subdued underlying inflation, he says. Trade uncertainty and increased equity market volatility on AI concerns could also undermine the Canadian dollar, Halpenny adds. The U.S. dollar trades flat at 1.4054 Canadian dollars. (renae.dyer@wsj.com)
0507 ET - The cost of insuring Bahrain's sovereign debt against default rises to its highest level since April as the Middle East conflict deepens. The U.S. continued attacks on Iran on Wednesday while Iran said it struck U.S. assets in Bahrain and Kuwait. Investors are taking precaution due to uncertainty surrounding the conflict. Bahrain's five-year credit default swaps rise 1 basis point to 280bps, a 3-month high, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)
0505 ET - The dollar has scope to fall further after its modest negative reaction to Tuesday's lower-than-expected U.S. inflation data, MUFG Bank's Derek Halpenny says in a note. "Despite the muted FX reaction, the scale of weakness in the CPI report certainly helps weaken on key pillar of support for the dollar--the prospect of a near-term [interest-rate] hike," he says. However, the re-escalation in the Middle East conflict and surge in oil prices makes it difficult to trade with conviction, he says. The DXY dollar index trades flat at 100.922 after earlier declines.(renae.dyer@wsj.com)
0458 ET - The U.S. tech sector could benefit if oil prices stabilize and investors reduce expectations of interest-rate rises by the U.S. Federal Reserve, Tickmill Group's Patrick Munnelly says in a note. Rising oil prices have caused markets to price in a high possibility of Fed interest-rate rises in the coming months, and lowered demand for risk assets. Nonetheless, if energy prices climb further, inflation concerns could rise and reduce risk appetite, he says. (miriam.mukuru@wsj.com)
(END) Dow Jones Newswires
July 15, 2026 08:56 ET (12:56 GMT)
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