The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1131 GMT - The Norwegian krone has limited scope to extend its recent appreciation as the Norges Bank might not raise interest rates further, Rabobank's Jane Foley says in a note. The krone is finding support from the recent pick up in oil prices due to a re-escalation in the Middle East conflict as Norway is a major oil producer, she says. However, Norwegian price pressures were more moderate than expected in June. "On the back of doubts regarding further Norges Bank rate hikes, we expect euro-krone to stay close to the 11.00 level on a one-to-three-month view." The euro rises 0.1% to 11.0324 krone, having reached one-month low of 10.9920 earlier, according to LSEG. (renae.dyer@wsj.com)
1114 GMT - Bitcoin falls modestly amid rising U.S.-Iran tensions but remains within a relatively narrow range. "Sentiment continues to remain weak around cryptocurrencies, and having already endured so much this year it seems like much of the selling has exhausted itself for now," IG analyst Chris Beauchamp says in a note. Digital assets might struggle for attention in a week dominated by major U.S. earnings and more economic data while risk sentiment continues to be led by oil prices and the Middle East conflict, he says. Bitcoin falls 0.2% to $64,378, LSEG data show. (renae.dyer@wsj.com)
1112 GMT - Fixed income markets enter the second half of 2026 supported by resilient economic activity, healthy corporate and consumer balance sheets and favorable market technicals, Aegon Asset Management's Stephen Jones says in a note. Across most sectors, fundamentals remain stable despite headwinds stemming from geopolitics, trade policy, inflation and the pace of AI-driven investment, though the backdrop is more mixed for sovereign markets, the global CIO says. "Concerns around persistent inflation, elevated government borrowing needs and rising fiscal pressures are keeping many central banks cautious and limiting the potential for significant declines in yields," he says. Sovereign debt continues to offer attractive income, diversification benefits and selective opportunities, but elevated bond supply and fiscal deficits remain important headwinds, particularly at longer maturities, Jones says. (emese.bartha@wsj.com)
1110 GMT - Investors in U.K. government bonds, or gilts, are eager to find out the spending plans and policy announcements under the new government as Andy Burnham is due to become the U.K. prime minister on Monday. "Burnham's big speech later on [Monday] might offer a glimpse at what he wants to achieve," AJ Bell's Russ Mould says in a note. Ten-year gilt yields climb 2.8 basis points to last trade at 4.978%, Tradeweb data show. (miriam.mukuru@wsj.com)
1109 GMT - Yield premium reflecting market expectations of a European Central Bank rate hike later this year is expected to be embedded in the front end of the bond curve, MFS Investment Management's Peter Goves says in a note. "However, we doubt the July ECB will be overly hawkish such that it gears up the front end further," the head of developed-market sovereign debt research says in a note. "Net net, we still see value in the front-end on the assumption there is one more hike left," he says. MFS IM expects the ECB to keep rates on hold this week and the debate has likely shifted to September, he says. However, the ECB is unlikely to precommit to a September move, Goves says. (emese.bartha@wsj.com)
1102 GMT - Incoming U.K. Prime Minister Andy Burnham is expected to deliver a cautious autumn budget, but there could yet be surprises for investors, James Smith at ING says in a note. While Burnham has committed to following the country's fiscal rules, he has also outlined bold plans ranging from social-housing investment to nationalization, Smith says. "A boring budget doesn't win elections - nor does it square with Burnham's rhetoric about big change. So a much bolder budget clearly can't be ruled out." Potential surprises include larger public investment, unexpected changed to welfare reform and property tax, as well as broader tax changes, Smith says. Burnham could also seek to exempt areas like defense or investment from fiscal targets, allowing for higher borrowing, he adds. (don.forbes@wsj.com)
1040 GMT - U.K. political risk premium declines as Andy Burnham is due to become the new prime minister on Monday, Morgan Stanley strategists say in a note. Geopolitical concerns continue to weigh on U.K. government bonds, but political concerns are easing, the strategists say. Should the Middle East tensions recede, gilt yields are expected to decline, they say. Ten-year gilt yields rise 2.8 basis points to last trade at 4.978%, Tradeweb data show. (miriam.mukuru@wsj.com)
1029 GMT - The Indian rupee faces pressure from escalating geopolitical tensions that drove a rally in crude oil prices and risk-averse sentiment, says Dilip Parmar, senior research analyst at HDFC Securities in a note. However, market anticipation of an intervention by the central bank managed to cap the currency's downside, Parmar says. From a technical standpoint, the spot U.S. dollar-rupee pair faces resistance at 96.50 and support around 95.80, Parmar adds. The dollar is 0.2% higher at 96.4450 rupees.(kimberley.kao@wsj.com)
1002 GMT - European stocks will perform strongly despite escalating hostilities in the Middle East and the prospect of tighter European Central Bank policy, UBS strategists say. Higher energy prices could cause the ECB to raise interest rates by a quarter percentage point in September, but "still-fragile economic growth outlook should prevent that move from developing into a sustained hiking cycle." Improved manufacturing on the continent and rising corporate earnings will benefit European stocks, while an increase in German government spending should lift domestic demand, the strategists say. "We believe investors should look beyond the recent weakness in European stock." The Europe-wide Stoxx 600 rises 0.15%. (josephmichael.stonor@wsj.com)
0934 GMT - U.S. Treasury yields rise as military hostilities in the Middle East escalate further, while the dollar is relatively stable amid demand for safe-haven assets. The Middle East conflict has lifted oil prices and could push Treasury yields higher as they reinforce market expectations of a rate hike by the Federal Reserve, Hola Prime's Somesh Kapuria says in a note. "Elevated energy costs could reinforce the expectations that the Federal Reserve could raise interest rates," he says. Despite weaker-than-expected inflation figures published last week, the Fed is still expected to increase rates before year-end, he says. The 10-year U.S. Treasury yield rises 1.7 basis points to 4.556%, according to Tradeweb. The DXY dollar trades steady at 100.785. (emese.bartha@wsj.com)
0921 GMT - The euro should benefit if the European Central Bank strongly signals it is willing to raise interest rates further as the escalating Middle East conflict pushes up energy prices, Commerzbank's Thu Lan Nguyen says in a note. The ECB is expected to leave rates unchanged Thursday but raise rates again in September. Given the rise in energy prices, it is crucial how clearly the ECB underscores that it is prepared to raise rates beyond September, she says. "This is likely to be decisive in limiting the downside potential in euro versus the dollar in the event of a further escalation in the U.S.-Iran conflict." The euro trades steady at $1.1438. (renae.dyer@wsj.com)
0908 GMT - Sterling is unlikely to rise much further in response to higher U.K. real yields adjusted for inflation and reduced fiscal concerns, MUFG Bank's Lee Hardman says in a note. "After recent strong gains, we believe that a lot of good news is now priced into the pound which should curtail further upside." Higher energy prices due to the U.S.-Iran conflict have lifted U.K. bond yields. Markets have scaled back initial worries over political risks as incoming Prime Minister Andy Burnham has pledged to be fiscally responsible. Reports that Burnham will pick Home Secretary Shabana Mahmood as his treasury chief could ease fiscal concerns, he says. Sterling rises 0.1% to $1.3470. The euro falls 0.1% to 0.8494 pounds. (renae.dyer@wsj.com)
(END) Dow Jones Newswires
July 20, 2026 07:31 ET (11:31 GMT)
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