The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0837 ET - The Bank of England Monetary Policy Committee's 9-0 unanimous vote in favor of holding the bank rate was "the most credible outcome possible" given the current extremely difficult backdrop, Peel Hunt's Kallum Pickering says in a note. This voting reflects an honest appraisal of the situation the BOE faces, with energy prices spiking due to the Middle East war, the chief economist says. "While rate-setters may still privately believe that the next rate move is more likely to be down than up, given the uncertainty over the Iran war timeline, advocating for such a move would have been unwise," he says. (emese.bartha@wsj.com)
0827 ET - Yields on U.K. 10-year gilt yields extend an earlier rise, hitting a 14-month high of 4.881% after the Bank of England voted to keep interest rates on hold in a unanimous vote. The continuing war in the Middle East is causing investors to price in the risk of prolonged energy supply shock and elevated inflation risk. Rate increases could be a possibility in the coming months if the war continues. "Given the Iran conflict, it is no surprise that the BOE decided to keep policy on hold today," Aberdeen's Luke Bartholomew says in a note. Ten-year gilt yields are up 12.5 basis points on the day to last trade at 4.876%, Tradeweb data show. (miriam.mukuru@wsj.com)
0826 ET - Sterling rises against the dollar and the euro after the Bank of England voted unanimously to leave interest rates on hold at 3.75%. Prior to the U.S.-Israeli attack on Iran, many investors had anticipated a rate cut at this meeting. However, the recent surge in energy prices means rate increases could be possible due to fears about rising inflation. The BOE said it will "continue to monitor closely the situation in the Middle East and its impact on global energy supply and energy prices." The central bank's monetary policy committee "stands ready to act as necessary." Sterling rises 0.3% to $1.3309, from $1.3287 beforehand. The euro falls 0.1% to 0.8627, from 0.8634 previously. (jessica.fleetham@wsj.com)
0801 ET - The dollar could continue rising as oil prices jump and the U.S. Federal Reserve suggested that interest-rate cuts weren't in the cards for now, Commerzbank's Thu Lan Nguyen says in a note. The Fed left rates on hold on Wednesday, as expected, while Chair Jerome Powell said rate reductions were much harder to justify unless the economy weakens. "The market is likely to feel vindicated in its assessment of the Fed's reaction function (i.e., fewer rate cuts due to higher energy prices)," Nguyen says. "This means that the dollar will continue to appreciate for the time being if energy prices rise further." The DXY dollar index trades steady at 100.104, not far from Friday's peak of 100.540. (jessica.fleetham@wsj.com)
0753 ET - Bitcoin falls to its lowest level in a week as tensions in the Middle East escalate, causing oil prices to rise. Attacks on energy infrastructure in the Gulf strengthen fears of supply disruptions and this weighs on risky assets. Meanwhile, investors continue to sell bitcoin after it hit a six-week high of $75,984 on Tuesday, LSEG data show. Charts show the crypto currency faces resistance at $76,000, while the recent drop below $71,000 means it could fall further towards $60,000, says Trade Nation's David Morrison. Bitcoin last trades down 1.7% at $70,030, having hit a low of $69,514. (jessica.fleetham@wsj.com)
0712 ET - The cost of default protection for euro high-yield credit rises sharply amid escalation in Middle East tensions and fears about prolonged energy-supply disruptions. Iranian attacks on Qatar's liquefied natural gas plant and other Gulf energy sites caused a surge in oil prices and raised concerns over supply. The iTraxx Europe Crossover index of euro high-yield credit default swaps rises 10 basis points to 309 bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)
0704 ET - The Riksbank will most likely keep its key policy rate unchanged through 2026, SEB stategists Amanda Sundstrom and Olle Holmgren write. The central bank has emphasised the high level of uncertainty and readiness to act if needed. It also presented two alternative scenarios and implications from the Middle East conflict. This illustrates that changes to the policy rate may be needed if the global situation changes, the strategists say. SEB had expected the Riksbank to remove from its rate path the small probability for a hike in the fourth-quarter this year. However, it remains in place. "This should not be a major market mover in this environment," the strategists say. (dominic.chopping@wsj.com)
0652 ET - Yields on U.K. government bonds could face increased volatility as markets analyze prospects for another Bank of England interest-rate cut, eToro's Lale Akoner says in a note. The latest U.K. jobs data shows the labor market is stabilizing, but the data is unlikely to change the BOE's stance in the near term, Akoner says. Rising energy costs due to the Middle East war raise inflation risk, however, and could limit the BOE's scope to cut interest rates in the coming months, she says. Ten-year gilt yields hit a 6.5-month high of 4.835% earlier and last trade at 4.824%, 7.3 basis points higher on the day, Tradeweb data show. (miriam.mukuru@wsj.com)
0647 ET - The Riksbank left its rate and rate path unchanged, and Handelsbanken senior economist Magnus Lindskog says it could have done little else amid extreme uncertainty surrounding the Middle East conflict. "For now, uncertainty is the only certainty - and waiting for clearer signals is the only viable strategy." Market reactions are muted, he adds. The euro trades steady on the day at 10.7824 Swedish kronor. (dominic.chopping@wsj.com)
0641 ET - Surging gas prices could see U.K. inflation hit 4.0% this year, Rob Wood at Pantheon Macroeconomics says in a note. U.K. natural gas spot prices rose roughly 30% from Wednesday's close. "We estimate that energy prices this morning would mean that inflation falls only a little further, to 2.8% in April, before rising back above 3% in May, to 3.9% in August and to 4.0% in November," Wood says. Pantheon is starting to include second-round effects in its inflation outlook because inflation above the psychologically-significant 4.0% level tends to drive up household inflation expectations. "The [Bank of England] will have to be careful if there is a real risk that headline inflation rises back above 4% and maybe towards 5%," Wood says. (don.forbes@wsj.com)
0619 ET - The Riksbank held rates and left its rate path unchanged but stands ready to act if necessary. The central bank is expected to keep its rate unchanged for some time, while developments in the Middle East call for vigilance. "The bank is taking a wait-and-see stance amid the increased uncertainty," Nordea chief analyst Torbjorn Isaksson writes. A rate cut is "off the table for now" and rate hikes are possible if energy prices take off. However, it's important to remember that Swedish inflationary pressure is currently low, Isaksson says. Energy prices therefore need to rise markedly before inflation becomes uncomfortably high. "We keep our forecast that the Riksbank will stay on hold at 1.75% throughout 2026," he says. (dominic.chopping@wsj.com)
0611 ET - Weak U.K. labor market data indicate that "the bar to a Bank of England rate hike is high," ING's James Smith says in a note. The U.K. unemployment rate remained unchanged at an elevate level of 5.2% in the three months to January. Average wage growth, excluding bonuses, slowed to 3.8% in the three months to January from 4.2% in October to December. "We still think the next move is more likely to be a rate cut, even if the timing is increasingly uncertain," Smith says. However, rising energy prices are causing money markets to price in a 60% chance of a BOE rate increase in June, LSEG data show. (miriam.mukuru@wsj.com)
(END) Dow Jones Newswires
March 19, 2026 08:37 ET (12:37 GMT)
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