The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0938 GMT - China is expected to further ease its monetary policy settings, but only in a calibrated, targeted way, says BNP Paribas's Wei Li. The PBOC's "moderately loose" stance leaves room for measures including RRR cuts and interest-rate adjustments. However, Li cites three main constraints that limit aggressive easing: imported inflation from oil-price spikes; currency stability pressures as the dollar strengthens on safe-haven flows; and financial risk concerns amid property-sector vulnerabilities. A prolonged Middle East conflict is shifting priorities toward financial-market stability and energy security, with policymakers wary of oil-driven cost pressures, Li says. "China's relative insulation from direct energy shocks (compared to Japan and Korea) provides some policy autonomy, but external volatility necessitates careful calibration between domestic support and external stability," Li says. (jihye.lee@wsj.com)
0918 GMT - U.K. public finances are expected to come under strain due to effects of the Middle East war, Quilter's Lindsay James says in a note. The latest public finances data show borrowing in February was 14.3 billion pounds ($19.2 billion), higher than the consensus forecast by economists in a Wall Street Journal poll for borrowing of 9.3 billion pounds. High energy costs due to the U.S.-Iran conflict raise the risk of elevated inflation which add to inflation-linked government expenses, James says. "With U.K. growth already challenged, such a scenario of higher inflation and weaker growth playing out would be a really bad place to be given the level of inflation-linked costs." (miriam.mukuru@wsj.com)
0831 GMT - Yields on U.K. government bonds fall modestly as market calm returns after the U.S. urged Israel to halt attacks on Iran's energy fields. The news brought some relief that this week's attacks on energy infrastructure would not spiral into something worse, Deutsche Bank strategists say in a note. U.K. public borrowing data released on Friday showed borrowing at 14.3 billion pounds in February, higher than the 9.3 billion pounds consensus forecast by economists in a WSJ poll. Ten-year gilt yields decline 0.4 basis points to last trade at 4.837%, Tradeweb data show. (miriam.mukuru@wsj.com)
0822 GMT - Bitcoin rises slightly as European equities start the day in positive territory. However, it remains at weaker levels after dropping well below $70,000 on Thursday to its lowest in more than a week. The cryptocurrency's falls followed a cautious tone from the U.S. Federal Reserve in response to uncertainties surrounding the war in the Middle East and elevated energy prices, Saxo analysts say in a note. "The key takeaway for investors is that crypto is once again behaving like a macro-sensitive asset, reacting to interest rate expectations, dollar strength, and geopolitical developments rather than purely crypto-specific drivers," they say. Bitcoin rises 1.1% to $71,250, having fallen to $68,802 on Thursday, LSEG data show. (jessica.fleetham@wsj.com)
0814 GMT - Asian currencies are expected to face renewed pressure as regional central banks prioritize domestic inflation and FX stability over closely tracking the cycle of the Federal Reserve. BNP Paribas strategist Chandresh Jain flags the baht, the won and the Indian rupee as most exposed to higher energy prices, while the ringgit and the rupiah are relatively insulated. Regional authorities may tolerate broad U.S. dollar strength but are likely to act if FX weakness threatens to fuel imported inflation, Jain says. With energy prices and potentially food prices rising, second-round effects could test policymakers' resolve and drive more differentiated policy paths across Asia. (jihye.lee@wsj.com)
0757 GMT - The dollar rises slightly, reversing some of its falls the previous day. Thursday's falls came as oil prices dropped amid easing concerns over energy supply disruption stemming from the Middle East war. Oil prices stay lower on Friday but large uncertainties remain surrounding how long the conflict will last and how long energy prices will stay elevated. "The foreign exchange market will therefore have to brace for continued volatility in exchange rates as long as the conflict persists and brings new twists every day," Commerzbank's Volkmar Baur says in a note. The DXY dollar index rises 0.1% to 99.341, having fallen to an eight-day low of 98.975 on Thursday. (jessica.fleetham@wsj.com)
0748 GMT - Some Southeast Asian countries could face higher food inflation if the Middle East conflict persists, DBS economists write in a note. Food carries a significant weightage in these countries' consumer-price index basket, with Thailand, Vietnam and the Philippines being most vulnerable to increasing food prices. The Middle East is a dominant global exporter of nitrogen-based fertilizers, including urea, and accounts for 20% to 30% of the global share. "In terms of direct impact, we assess that Thailand--a key agriculture producer--is the most vulnerable regionally," DBS says. Singapore is also exposed to international food price shocks, despite diversifying across multiple sources.(amanda.lee@wsj.com)
0746 GMT - KKR isn't immune to the headwinds facing the private-credit market, writes Morningstar's Greggory Warren in a note. Issues around liquidity in private-credit funds are likely to hit fundraising efforts and lead to increased redemption requests in the medium term, he says. While the alternative asset manager's exposure to private credit is far less than that of its peers Blue Owl and Ares, the company has enough private-credit exposure to weigh on it for the next several years, he adds. Morningstar cuts its fair-value estimate on KKR to $115 from $140, citing likely lower fundraising and higher redemptions for KKR's credit and liquid strategies segment. However, its shares are still moderately undervalued even with the fair-value estimate change, the analyst adds. Shares last closed flat at $90.60.(megan.cheah@wsj.com)
0734 GMT - Bank Negara Malaysia is likely to hold its policy rate at 2.75% throughout 2026, Affin Hwang IB analysts write in a note. The country's inflation is expected to remain manageable due to continuing fuel-related government subsidies, policy adjustments and a strong ringgit. Major central banks, particularly the U.S. Federal Reserve, are maintaining a cautious policy stance and delaying rate cuts. "We believe that global financial conditions will remain tight but stable, limiting excessive demand-side inflation spillovers to Malaysia," the analysts say. (amanda.lee@wsj.com)
0720 GMT - Gold prices are on track for a weekly fall of more than 7%, pressured by a stronger dollar and dimming hopes for further interest-rate cuts in the near term. In early European trading, New York futures rise 1.7% to $4,682.20 a troy ounce, rebounding from the previous session. However, market watchers say investor demand has weakened and the precious metal has been under pressure from ETF outflows. "Upward momentum has faded," ING analysts say. "Some investors are selling gold to raise cash or rebalance portfolios." A higher interest-rate environment typically pressures non-yielding bullion, while a firmer dollar makes commodities more expensive for overseas buyers. (giulia.petroni@wsj.com)
0704 GMT - A week of central bank decisions is wrapping up with one clear conclusion: the Middle East conflict is intensifying, and no one knows what the right monetary policy response should be, says Ipek Ozkardeskaya at Swissquote. The message echoed by major central banks is that rising oil and energy prices will push inflation higher in the short to medium term, depending on how long the conflict lasts, while weighing on growth. The challenge is that raising rates in response to an external supply shock is only partially effective, she says in a note. It won't end the war, fix damaged infrastructure, or directly lower energy prices, the analyst writes. What rate hikes can do is curb growth and dampen demand, helping to contain, but not necessarily reverse, inflationary pressures. (fabiana.negrinochoa@wsj.com)
0653 GMT - Malaysia's exports face a mixed outlook amid the Middle East conflict, CGS International economist Mas Aida Che Mansor says in a note. Overall exports should continue to be supported by shipments of manufactured products, especially in electrical and electronics. The country could also face more demand for crude oil and liquefied natural gas exports, she says. Buyers will look for alternatives as Middle East supply has been disrupted due to the closure of the Strait of Hormuz. However, rising oil prices and supply-chain strains could push up logistics and input costs, weighing on the country's production. CGS International maintains its 2026 export growth forecast for Malaysia at 7.9%.(amanda.lee@wsj.com)
(END) Dow Jones Newswires
March 20, 2026 05:38 ET (09:38 GMT)
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