The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0902 ET - The evolution of the Middle East war is likely to have a big influence on the Bank of England's interest-rate decisions in the coming months, Moneyfarm's Richard Flax says in a note. The BOE on Thursday voted to keep rates on hold at 3.75% in a unanimous decision. Rising tensions in the Middle East are driving up energy costs, raising the risk of high global inflation. "If the current pressures persist, expectations for rate cuts will continue to be pushed back," Flax says. Markets price in a 55% chance of a BOE rate rise in April, LSEG data show. (miriam.mukuru@wsj.com)
0854 ET - Switzerland's central bank might consider allowing the Swiss franc to appreciate further in the near-term, as this would help to cool price pressures amid rising energy prices, Pantheon Macroeconomics economist Ankita Amajuri says. The Swiss National Bank held its key rate at 0% for a third consecutive quarterly meeting on Thursday, and reiterated its message earlier this month that it's willing to intervene in foreign-exchange markets to limit a rapid appreciation of the franc. "As such, we expect the Bank to leave rates unchanged throughout 2026," Amajuri says in a note. The next SNB move is most likely a rate hike in early 2027, when inflation comes closer to the middle of its 0%-2% target band, she says. (edward.frankl@wsj.com)
0852 ET - The Bank of England preferred to keep interest rates on hold on Thursday after investors rapidly shifted from pricing in a gradual easing of rates this year to a potential rate hike, says KPMG U.K. chief economist Yael Selfin. Key for the central bank will be the extent of second-round effects from the energy shock and how much that could risk reigniting inflationary pressures, she says in a note. "For that reason, the bank is likely to discount softer signals from the labor market and the wider economy, placing greater weight on underlying price indicators in the coming months." However, despite the BOE's tone, a rate cut remains possible later this year once the energy shock impact begins to ease and inflation falls as expected, Selfin says. (edward.frankl@wsj.com)
0850 ET - Confidence among small businesses in Canada has taken a hit, as worries about higher fuel costs and supply chains build. The Canadian Federation of Independent Business's monthly barometer shows a sharp 9.5 points drop in the March longterm business confidence index to 55.8 points, following gradual improvement over much of the past year. Short-term optimism also deteriorated significantly. The share of business worried about fuel costs jumps to 50% this month from 36% in February. As well, CFIB says 57% of small businesses report challenges with insufficient demand, up from 50%. Still, staffing plans are steady, with 17% of firms looking to hire and 12% planning to lay off staff, a third straight month of positive net staffing intentions. (robb.stewart@wsj.com)
0840 ET - Bank of England policymakers should be careful not to overcorrect for past mistakes by raising rates too fast, ICAEW's Suren Thiru says in a note. The BOE held rates in a unanimous vote in the aftermath of soaring energy prices prompted by the Middle East conflict. Though the BOE will want to avoid a repeat of 2022 when it raised rates too late, this time policy is more restrictive and inflation is lower, leaving rate-setters favorably positioned to cope with this crisis, he says. "While another interest-rate cut remains possible if the Iran war ends quickly, with skyrocketing oil-and-gas prices locking in an imminent inflation spike, the chances of further policy loosening this year is rapidly receding," Thiru says. (edward.frankl@wsj.com)
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)
(END) Dow Jones Newswires
March 19, 2026 09:02 ET (13:02 GMT)
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