The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0936 ET - Canadian inflationary measures are still looking relatively muted after four months of oil supply disruption, says Desjardins' Royce Mendes. The headline consumer price index fell 0.4% in June as lower global oil prices drove energy costs down, leaving annual inflation at 2.8%. Core inflation excluding food and energy picked up, rising 0.3% on-month in seasonally adjusted terms, though Mendes says that looks tied to the temporary effect of the World Cup. "Despite the recent spike in global oil prices, the Bank of Canada can rest easy that passthrough to other goods and services remains very limited," he economist says. (robb.stewart@wsj.com; @RobbMStewart)
0935 ET - The Japanese yen could weaken further as it appears the country's authorities have opted against interventions to prop up the currency during Monday's Marine Day holiday, ING's Chris Turner says in a note. The dollar could rise above 162.75-162.85 yen in coming sessions--on the assumption there are no interventions--as escalating U.S.-Iran tensions push energy prices higher, he says. The dollar trades flat at 162.40 yen, close to the 40-year high of 162.83 reached on July 1, according to LSEG. (renae.dyer@wsj.com)
0902 ET - Sterling's recent rally appears stretched given uncertainty over fiscal policy under new Prime Minister Andy Burnham, Ebury economist Enrique Diaz-Alvarez says in a note. Speculation that Burnham could choose Shabana Mahmood as treasury chief has been welcomed by markets as she's viewed as more fiscally responsible and business-friendly than other candidates, including Ed Miliband, he says. However, the lack of policy detail from Burnham so far "casts a pall of uncertainty over British assets." In his first speech as prime minister Monday, Burnham said he would announce cost-of-living measures on Tuesday. Sterling trades flat at $1.3457 while the euro falls 0.2% to 0.8488 pounds. (renae.dyer@wsj.com)
0901 ET - The World Cup had a material impact on Canadian inflation in June, according to Statistics Canada's CPI report. Total inflation slowed to 2.8% in June, and core prices decelerated as well. Offsetting month-over-month declines in gasoline and some food items was a 14.2% jump in travel-accommodation prices, concentrated in Vancouver and Toronto--the two cities that hosted World Cup games. Rental-car prices also climbed 31% in June from the prior month, reflecting the number of tourists to watch World Cup matches in those two Canadian cities. (Paul.Vieira@wsj.com)
0900 ET - Interest-rate differentials have moved against the dollar, Societe Generale's Kit Juckes says in a note. "The market now prices a 90% chance of an European Central Bank [rate] hike in September (with a further adjustment expected after this week's meeting) and a 70% chance of a Federal Reserve hike." The ECB is more sensitive to oil prices due to its primary mandate to maintain price stability. That provides some cushion to the euro from rising oil prices in response to the Middle East conflict. While this isn't sustainable, investors betting on a higher dollar will need to be patient, he says. The DXY dollar index rises 0.1% to 100.861.(renae.dyer@wsj.com)
0858 ET - Canadian inflation cooled more sharply than expected last month as drivers saw some respite at the pumps. The consumer price index fell 0.4% on-month, the largest decline since December 2024. In annual terms, inflation decelerated to 2.8% from May's 3.2% and against economist expectations for 3%. Gasoline fell sharply during June and increased at a slower rate on a year-over-year basis than in May. Excluding gasoline, inflation was steady at 2.2%, holding near the Bank of Canada's 2% target. The central bank's preferred median and trim measures averaged 1.85%, a level last that low in September 2020. Still, with global oil prices back up in July, economists remain on watch for signs inflation is taking hold more broadly. (robb.stewart@wsj.com; @RobbMStewart)
0851 ET - The Canadian dollar is holding steady relative to the US dollar despite President Trump's latest threat to impose a new set of tariffs on Canada due to smoke in US cities from Canadian forest fires. Karl Schamotta, chief market strategist at forex firm Corpay, says traders view the threat, which would add pollution-related levies on top of existing duties, "as more smoke than fire, and are not adding to the risk discount embedded in the currency," since the trade war between the two countries escalated last year. (Paul.Vieira@wsj.com; @paulvieira)
0837 ET - Sterling and U.K. government bond yields are little moved after Andy Burnham pledged to improve cost of living in his first speech as prime minister. He promised to end rough sleeping, help more young people into work and build more council homes. Burnham said he would set out some of his measures, including how to pay for them, on Tuesday. The euro falls 0.2% to 0.8487 pounds, little changed from levels before the speech. Ten-year gilt yields rise 2.3 basis points in response to the Middle East conflict, to last trade at 4.972%, Tradeweb data show. (renae.dyer@wsj.com)
0752 ET - Escalation of strikes in the Middle East has pushed energy markets away from the European Central Bank's mild scenario and toward the baseline, which strengthens the case for another quarter-point hike in September, says Antonio Garcia Pascual at Santander CIB. However, only a prolonged disruption with material damage to energy infrastructure would justify a broader hiking cycle, he says in a note. The ECB will focus on indirect inflationary effects through food and core and second-round effect via wages and inflation expectations. Further escalation in Hormuz would raise the risk of supply-chain disruption, he says. Eurozone inflation is likely to stay near 3% through the second half of the year, reaching 3.2% in December, he says. (edward.frankl@wsj.com)
0741 ET - The European Central Bank is set to keep interest rates unchanged this week, with focus turning more to the following meeting, Pimco portfolio manager Konstantin Veit says in a note. "With no new staff projections due until September, the governing council is likely to see value in waiting, particularly given significant changes in energy markets since June," he says. However, lower energy prices, softer-than-expected June inflation, wage growth consistent with the inflation target, and weak economic growth suggest risks are tilted toward fewer hikes than markets price in, he notes. If the ECB ends its hiking cycle with its key rate at or below 2.5%, it will likely seek to preserve policy space and won't reverse the hikes next year, he adds. (edward.frankl@wsj.com)
0731 ET - 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)
0714 ET - 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)
(END) Dow Jones Newswires
July 20, 2026 09:36 ET (13:36 GMT)
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