The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1019 GMT - 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)
1011 GMT - 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)
1005 GMT - Soaring oil prices accelerate a selloff in U.S. Treasurys, particularly short-dated Treasurys. Brent crude last trades at $118.68, having hit an intraday high of $119.13, as attacks on energy infrastructure in the Gulf strengthens fears of supply disruptions. Meanwhile, the Federal Reserve held rates on Wednesday and suggested a near-term cut was unlikely. "Escalating tensions in the Middle East remain a key market force, with continued disruptions to regional energy infrastructure pushing oil prices higher and amplifying inflation concerns," says Naga's Frank Walbaum in a note. The two-year Treasury yield rises to 3.830%, the highest since August, before easing to 3.816%--still up 7.5 basis points on the day--, according to Tradeweb data. The 10-year yield rises 3.2bps at 4.287%. (emese.bartha@wsj.com)
0957 GMT - Yields on U.K. government bonds rise faster than their eurozone and U.S. equivalents. Rising oil prices have sparked renewed concerns about inflation, which could prevent the Bank of England from cutting interest rates. "The British economy is highly sensitive to energy prices," Swissquote's Ipek Ozkardeskaya says in a note. The BOE is expected to keep rates unchanged in a decision at 1200 GMT. Meanwhile, U.K. money markets price in a 60% probability of the BOE raising interest rates in June, LSEG data show. "The higher energy prices climb, the further away the dream of a BOE cut drifts," Ozkardeskaya says. U.K. 10-year gilt yields rise 6.5 basis points to 4.816%, Tradeweb data show. (miriam.mukuru@wsj.com)
0935 GMT - Demand for Swiss watches remains on track for a gradual recovery for now, but war in the Persian Gulf could pose a threat, analysts at Bernstein say in a note. The sector has been struggling with weak demand as well as trade conflicts with the implementation of tariffs in the key U.S. market. "The other key risk to watch out for is the development in the Middle East, which was a rare spot of growth in 2025 for the sector," the brokerage says. The consequences in the short term might be limited if the conflict can be quickly resolved, the analysts say. However, indirect impacts including reduced travel, higher oil prices, inflation, and weaker consumer confidence from a drawn-out conflict could threaten early signs of recovery. (andrea.figueras@wsj.com)
0931 GMT - Taiwan's central bank is likely to leave interest rates on hold at 2% for the foreseeable future, says Jason Tuvey, economist at Capital Economics in a note. Taiwan faces paying much higher prices on the global market to meet its energy requirements, but planned price caps will slow the pass-through to local energy prices and inflation, he says. Although the central bank raised its 2026 inflation forecast to 1.80% from 1.63%, the economist reckons that it's unlikely for inflation to emerge as a policy concern. "The uncertainty created by the conflict may contribute to some steam coming out of the economy but, for now at least, we expect growth to hold up well over the rest of this year and into 2027," he adds.(sherry.qin@wsj.com)
0916 GMT - The Swedish krona is little moved, staying firmer on the day versus the euro, after the Riksbank held its policy rate at 1.75%, as expected. The rate is expected to remain at this level for "some time to come," although the war in the Middle East makes this forecast very uncertain, the central bank said. The Riksbank's main scenario assumes that the war has moderate effects on inflation and the economic recovery. However, if the war leads to more persistent inflation, the central bank would have to raise the policy rate. Alternatively, it could have to cut it if demand is hit significantly while inflationary pressures weaken, it said. The euro is last down 0.2% at 10.7737 kronor. (jessica.fleetham@wsj.com)
0853 GMT - The Swiss franc is little moved, remaining slightly higher on the day versus the euro, after the Swiss National Bank left interest rates on hold at 0%. Notably, it said its willingness to intervene in the foreign exchange market has increased given the conflict in the Middle East. "The SNB thereby counters a rapid and excessive appreciation of the Swiss franc, which would jeopardise price stability in Switzerland," it said. The inflation forecast for the coming quarters is higher than in December due to rising energy prices but slightly lower in the medium term due to the stronger franc, the SNB said. The euro is last down 0.1% at 0.9076 francs. It hit a multiyear low of 0.8979 francs on March 9. (jessica.fleetham@wsj.com)
0855 GMT - Japan's core consumer prices are expected to hover in the low 1% range through the end of the year, tempered by government inflation-relief measures, says SMBC Nikko Securities economist Junichi Makino. That will likely afford the BOJ some breathing room to examine the impact of the Middle East conflict thoroughly. "There appears to be little need for an immediate rate hike," Makino says. In 2026, the BOJ is expected to deliver a single rate hike--potentially in April or July--before moving into wait-and-see mode, he adds. (megumi.fujikawa@wsj.com)
0831 GMT - Tackling volatile energy prices in Europe is a top priority, Belgian Prime Minister Bart De Wever tells reporters in Brussels ahead of a European Union leaders' summit. "Energy prices is a top priority," he says. "It was already before the war in the Middle East, the absolute top priority of my agenda, and I think European agenda, and this has become all the more present, urgent, after the events that we have been witnessing in the Middle East," he says. "Prices were too high, and this war has, of course, created another spike in the prices, and if that becomes structural, we're in deep trouble." (edith.hancock@wsj.com)
0824 GMT - Yields on U.K. 10-year government bonds climb to a 6.5-month high amid inflation concerns as Brent crude oil futures rose 6.4% to $114.30 a barrel. The Bank of England is expected to leave interest rates on hold at 3.75% in a decision at 1200 GMT. However, investors are pricing in the risk of the U.K. central bank raising rates in the coming months due to fears that high energy costs will push up inflation. Ten-year gilt yields jumped to 4.835%, the highest level since September 2025, and last trade at 4.809%, up 6 basis points on the day, Tradeweb data show. (miriam.mukuru@wsj.com)
0823 GMT - The Bank of Japan's inflation risk signaling appears much stronger than the Federal Reserve's statement, says Naomi Fink of Amova Asset Management in commentary. While both included an explicit reference to geopolitical risks, the Japanese central bank specifically flagged upward pressure on the consumer-price index due to the rise in crude oil prices, she notes. The BOJ also highlighted rising inflation expectations in addition to CPI likely being at a generally consistent level with the price-stability target. She reckons the BOJ's policy stance has tightened due to inputs rather than a shift in its guidance. Fink says the BOJ statement supports her view that without a policy adjustment, the central bank risks falling behind the curve, but stops short of signaling a heightened pace of increases as yet. (megan.cheah@wsj.com)
(END) Dow Jones Newswires
March 19, 2026 06:19 ET (10:19 GMT)
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