The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0835 ET - The euro falls to a nine-day low against the dollar after the European Central Bank left interest rates unchanged, as expected, but refrained from any hints about further rate rises. The ECB said uncertainty remains high and the full inflationary impact of the energy price shock stemming from the U.S.-Iran conflict is yet to play out. It reiterated a "dependent and meeting-by-meeting approach" to its decisions. The euro falls to a low of $1.1380, LSEG data show. (renae.dyer@wsj.com)
0822 ET - Yields on U.K. 2-year government bonds climb as investors bet on the prospects of the Bank of England raising interest rates in the coming months due to surging oil prices. Investors are concerned about the risk of hostilities persisting, keeping energy prices up and forcing central banks to increase interest rates. Markets price in a total of 47 basis points of BOE rate rises in 2026 as the Middle East war intensifies, LSEG data show. Two-year gilt yields are up 3.5 basis points to last trade at 4.466%, having hit a two-month high of 4.474% earlier in the session, Tradeweb data show. Ten-year gilt yields also hit a two-month high of 5.088%. (miriam.mukuru@wsj.com)
0804 ET - The Bank of England could vote to keep interest rates unchanged at 3.75% next week, with seven members in favor while two members could prefer a rate increase, Nomura Global Markets Research analysts say in a note. Nomura analysts expect no rate rises from the BOE in the coming months. However, the BOE could be pushed to increase interest rates later this year to tackle second-order effects of inflation or to counter the risk of rising inflation, the analysts say. Markets fully price in one quarter-point BOE rate increase in November, and an 84% chance of a second rate increase by year end, LSEG data show. (miriam.mukuru@wsj.com)
0802 ET - The dollar rises to a three-week high as it reverts to its traditional safe-haven role, with correlations to equities and interest rates somewhat normalizing, TD Securities strategists say in a note. "A sustained dollar surge, however, looks unlikely as rate differentials are not expected to return to 2022 extremes when the Federal Reserve's rate hike cycle materially outpaced global peers." A solid U.S. economy is no longer enough for dollar outperformance as markets demand a much larger U.S. growth and equity premium, they say. TD expects modest dollar strength in the third quarter, citing room for long positioning to build, but expects it to fall towards year-end. The DXY dollar index rises to as high as 101.370. (renae.dyer@wsj.com)
0752 ET - European credit looks appealing due to elevated yields, healthy corporate conditions in the region and improving financial positions, BlackRock's James Turner and Jose Aguilar say in a note. Second-order inflation looks less likely and this reduces the prospects of the European Central Bank increasing interest rates into extremely restrictive levels, the executives say. "In this environment, higher rates continue to support attractive income opportunities, allowing investors to earn compelling yields." (miriam.mukuru@wsj.com)
0736 ET - The Turkish lira stays weaker against the dollar, showing little reaction after Turkey's central bank left interest rates unchanged at 37% as widely anticipated. The central bank said the underlying trend of inflation fell slightly in June but it expects a temporary increase in July following a renewed rise in energy prices due to the U.S.-Iran conflict. It said its tight monetary policy stance will be maintained until price stability is achieved and this should strengthen the disinflation process. The dollar rises 0.1% to 47.2321 lira, little changed from levels before the decision. It reached a record high of 47.2434 overnight, according to LSEG.(renae.dyer@wsj.com)
0715 ET - The Bank of England looks less likely to raise interest rates in the coming months, UBS Investment Bank economists say in a note. The U.K.'s sluggish economic growth and weak labor market reduce the need for the BOE to raise interest rates, the economists say. "The Bank can address the risk of second-round effects by keeping rates at the current restrictive level for longer, without hiking them further." However, the prospects of the BOE raising rates can't be ruled out, given rising oil prices and some BOE members' preference for a rate increase, they say. (miriam.mukuru@wsj.com)
0709 ET - U.K. inflation is expected to accelerate after slowing in June and could hit a peak of 3.3% in November, UBS Investment Bank economists say in a note. Utility bills are expected to rise in July and could push up annual headline inflation up to 2.9% from 2.6% in June, the economists say. "We expect food and goods inflation to pick up towards year-end as higher input costs--particularly for energy and fertilisers--are gradually passed through to consumers." The worsening Middle East conflict raises the risk of rising inflation, they say. (miriam.mukuru@wsj.com)
0558 ET - The Monetary Authority of Singapore will likely maintain a mildly hawkish bias without tightening its policy next week as it monitors broader price pressures, Goldman Sachs economists say in a note. The country's core inflation was largely stable at 1.6% on year in June, compared with May's 1.4% reading. The economists think July's core inflation print will be key to watch, with the recent 17% increase in electricity tariffs for households likely lifting the reading by about 0.5 percentage point this month. (amanda.lee@wsj.com)
0552 ET - The cost of insuring high-yield euro-denominated credit against default rises to a six-week high due to risk-off sentiment as the U.S.-Iran war intensifies. The U.S. on Wednesday said it fired strikes against Iranian targets, the 12th consecutive day of attacks. Iran continued attacks on ships on the Strait of Hormuz and Iran-backed Houthis claimed strikes on tankers in the Red Sea. The widening conflict has led investors to exercise caution. The iTraxx Europe Crossover index of euro high-yield credit default swaps rises 3 basis points to 260bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)
0505 ET - Business confidence in France inched up in July, though it remains subdued overall, Pantheon Macroeconomics' Claus Vistesen says in a note. The headline manufacturing sentiment index rose to 101 in July from 100 in June, marginally above its long-run average. Across sectors, the small manufacturing increase was joined by a rebound in services confidence, while sentiment in retail trade jumped--possibly due to the World Cup. "Overall, these are encouraging data, pointing to a clear improvement in business sentiment," Vistesen says. More generally, hard date for the second quarter point to a stronger GDP outturn in next week's first print than surveys imply. "We think the initial estimate will show that GDP rose by 0.3% in 2Q, rebounding from a 0.1% decline in 1Q." (edward.frankl@wsj.com)
0504 ET - The Japanese yen falls to a fresh 40-year low against the dollar and the Swiss franc hits an 11-month low versus the dollar as the ongoing U.S.-Iran conflict sends oil prices higher. The low-yielding yen and the franc are two of the worst performing G-10 currencies since the U.S.-Iran conflict started in late February and continue to underperform this month, MUFG Bank's Lee Hardman says in a note. "The negative energy price shock and building expectations for European Central Bank and Federal Reserve rate hikes has weighed on both currencies." The dollar rises to as high as 0.8156 francs and 163.44 yen. The euro also rises to a six-month high of 0.9316 Swiss francs, according to LSEG. (renae.dyer@wsj.com)
(END) Dow Jones Newswires
July 23, 2026 08:35 ET (12:35 GMT)
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