The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1148 ET - Friday trading has been challenging since the Iran war began, but today's late action in stocks could be even more volatile than usual. It's a quadruple witching day, when stock-index futures, stock index options, single stock options, and single stock futures all expire. The DJIA has climbed on each of the last seven quadruple witching days, according to Dow Jones Market Data. In 2024 and 2025, the S&P 500 and Nasdaq Composite rose on four of those days and fell on the other four. Quadruple witching can also lead to elevated trading volumes as investors close out positions. DJIA is off 0.6%, the S&P falls 0.9%and Nasdaq is down 1.2%. (patrick.sheridan@wsj.com)
1125 ET - Investors are selling off U.K. government bonds, or gilts, sharply and this highlights the vulnerability of the economy, Aberdeen's Matthew Amis says in a note. Markets are concerned that high energy costs from the Middle East war will push up U.K. inflation and cause the Bank of England to raise interest rates. Money markets now price in the possibility of three BOE rate rises in 2026, a major shift from two rate cuts priced in prior to the Middle East war, LSEG data show. Possible deescalation in the Middle East war could restore investor confidence and lead to demand for gilts, Amis says. Ten-year gilt yields jump to a near 18-year high of 5.022%, LSEG data show. (miriam.mukuru@wsj.com)
1119 ET - Michelle Bowman, the Fed's vice chair for supervision, said her proposed modernization of bank regulation aims to push activity back into banks. After the Dodd-Frank law, she says "we've seen a lot of business that's traditional banking activity exit into the non bank space, and this is one way for us to recalibrate that," on Fox Business. America's biggest banks would be allowed to hold billions of dollars less in capital on their books under proposals unveiled Thursday, easing rules put in place after the 2008 financial crisis that were meant to help shield against meltdowns. (jessica.coacci@wsj.com; @jessica_coacci)
1046 ET - U.K. government bonds perform worse than their U.S., eurozone and Japanese counterparts as inflation concerns drive a selloff in sovereign bonds. The Middle East war, markets' sharp repricing of Bank of England interest-rate expectations, and worsening U.K. public finances are factors behind gilts' underperformance, XTB's Kathleen Brooks says in a note. Ten-year gilt yields jump 17 basis points to a near 18-year high of 5.020%, LSEG data show. Markets fully price three BOE interest-rate rises in 2026, in sharp contrast to two rate cuts priced prior to the Middle East war, LSEG data show. Ten-year Bund yields climb 5.7bps to 3.016%, while 10-year Treasurys rise 8.5bps to 4.372%, Tradeweb data show. (miriam.mukuru@wsj.com)
1027 ET - A solid start to the year for retail sales in Canada may be evidence that last year's interest rate cuts, combined with the slight reduction in unemployment since mid-2025, is supporting an upturn in consumer sentiment and spending, CIBC Capital Markets' Andrew Grantham says. Retail trade was up in January and an advance estimate points to further strength in February, which Grantham says may result in the strongest gain in retail sales volumes since at least 4Q 2024. Looking forward, the economist says the recent jump in gasoline prices will flatter the headline nominal retail sales figures in the coming months, but the squeeze to disposable incomes is likely to restrict purchases of other products and subdue overall sales.(robb.stewart@wsj.com; @RobbMStewart)
1021 ET - Decent Canadian retail sales figures for January and a positive early read for February highlight consumer resilience in the face of mounting headwinds for the Canadian economy, says Bank of Montreal's Shelly Kaushik. Still, with higher energy costs expected to take up a larger share of household budgets in the coming months, the economist says she will be watching to see how other spending components hold up. Retail sales volumes rose 1% on-month in January, the largest increase since August, and alongside an increase in hours worked are some of the few bright spots for the economy to start the year, Kaushik says. (robb.stewart@wsj.com; @RobbMStewart)
1021 ET - A 1.1% on-month rise in Canadian retail sales in January was weaker than expected but, along with an advance estimate for another gain in February, paints a more positive picture for household spending than late last year, Capital Economics' Bradley Saunders says. It suggests spending will be a tailwind for GDP growth this quarter, the economist says. Still, with gasoline prices headed for C$2 a liter, the hit to households' purchasing power could crush real consumption in the second quarter, he adds. (robb.stewart@wsj.com; @RobbMStewart)
1018 ET - A more proactive policy by the European Central Bank in the face of inflation risks should limit the euro's falls against the dollar, HSBC's Nick Andrews says in a note. Thursday's message from the ECB that it could raise interest rates if energy prices stay high caused money markets to price an increased probability of rate hikes. Markets fully price 25 basis-point rate increases in June and July, and a 67% chance of a hike in April, LSEG data show. "A more proactive policy as priced by markets should help buffer euro-dollar from deeper falls," Andrews says. However, the eurozone is more vulnerable than the U.S. to prolonged higher energy prices, he says. The euro falls 0.4% to $1.1538. (jessica.fleetham@wsj.com)
1018 ET - Canadian retail sales for the first two months of the year were surprisingly strong given adverse weather conditions in parts of the country, with trade up 1.1% on-month in January and an advance estimate pointing to a 0.9% rise in February. Desjardins' Oskar Stone says that given the job losses in the opening months of 2026, it appears Canadians are diverting more money away from savings and toward spending. There is a limit to how long such a dynamic can continue, the economist says, adding consumers are now feeling the squeeze of higher gasoline costs. (robb.stewart@wsj.com; @RobbMStewart)
0959 ET - Fed governor Christopher Waller voted to hold rates steady at the Fed's Wednesday meeting, but says it doesn't mean he'll keep that stance. "If things go reasonably well and the labor market continues to be weak, I would start advocating again for cutting the policy rate later this year," he says in a CNBC interview. However, with much of the Middle East conflict's impact still unknown, Waller notes that if oil prices remain very high, it will eventually bleed through into core inflation. (jessica.coacci@wsj.com; jessica_coacci)
0950 ET - The risk premium on euro-denominated corporate bonds climbs as investors take precaution amid the Middle East war. "The increase has been comparatively modest so far," LBBW credit analysts say in a note. However, an escalation in the conflict raises the risks for global economies and could lead to significant credit spread widening, the analysts say. Spreads on euro-denominated investment-grade bonds hit their highest in nearly nine months at 101.66 basis points on Thursday, according to the Iboxx euro corporates index.(miriam.mukuru@wsj.com)
0921 ET - A selloff in the Treasury market continues, sending yields higher, as traders remain concerned about the inflation impact of the war in Iran and implications for the Fed's policy response. With the risk of more escalation ahead, "we suspect investors will be very wary of carrying a Treasury long into the weekend," Ian Lyngen of BMO writes. The medium-term path for the market is less clear, but Lyngen says he is "near-term nervous that the selloff hasn't fully run its course and that developments in the Middle East could justify another leg higher in global yields." The benchmark 10-year yield has reached 4.307%, versus 4.281% Thursday. The 2-year yield is at 3.873%, up from 3.830%. (matt.grossman@wsj.com; @mattgrossman)
(END) Dow Jones Newswires
March 20, 2026 11:48 ET (15:48 GMT)
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