The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1130 GMT - The dollar could stay confined to a tight range in the near term due to uncertainty over the Middle East conflict, ING's Chris Turner says in a note. The dollar briefly fell Monday on reduced demand for safe havens and lower oil prices due to America's energy independence after President Trump said the U.S. would postpone military strikes against Iranian energy infrastructure for five days. Traders will be eager to hear, particularly from Iran, whether there's any realistic chance of ceasefire negotiations, Turner says. "Until then, any further rally in risk assets and selloff in the dollar will prove limited." The DXY dollar index rises 0.3% to 99.280. ING expects it to trade in a range of 99.00-100.00 for now. (renae.dyer@wsj.com)
1128 GMT - The cost of default protection for euro credit stays steady at elevated levels as investors exercise caution given the uncertainty around the Middle East war. Markets stay volatile as new developments unfold in the U.S.-Iran conflict, IG analysts say in a note. The iTraxx Europe Crossover index of euro high-yield credit default swaps is steady at 343 basis points, close to the 11-month high of 365 bps reached on Monday, S&P Global Market Intelligence data show. The iTraxx Europe Main index of euro investment-grade CDS is unchanged at 69bps. (miriam.mukuru@wsj.com)
1127 GMT - The U.K. Debt Management Office's auction of 2.25 billion pounds ($3.02 billion) in October 2035 gilts on Tuesday attracted good demand, with bids of up to 3.5 times the amount on offer. The yield tail--or the difference between the average yield paid at an auction and the highest yield paid for the bond--was only 0.2 basis points, in a further indication of strong demand. However, the recent jump in gilt yields--due to rising energy costs and prospects of higher interest rates--meant the gilts were sold at a much higher yield than the same bond's previous auction on Feb. 3. The average yield at this auction was 4.911%, higher than the previous auction's average yield of 4.585%. (miriam.mukuru@wsj.com)
1115 GMT - Despite a sharp decline in overall eurozone business activity, manufacturers proved a bright spot, ING's Bert Colijn says in a note. Provisional March PMIs showed higher energy prices due to the Middle East conflict causing significant increases in input costs and supply-chain disruptions. Output in the industrial sector remained broadly stable, showing resilience to rising costs. However, manufacturers' expectations for the coming months soured. "The eurozone's vulnerabilities are once again laid bare. For energy-intensive industry, this means that a recovery will be harder to achieve," Colijn says. Much will depend on the timeline of conflict in Iran. "A fairly fast end would boost hopes of a more modest impact on consumer prices and would increase chances of a rebound for industry," he says. (don.forbes@wsj.com)
1033 GMT - Business activity in the eurozone looks set to stagnate rather than contract, Jack Allen-Reynolds at Capital Economics says in a note. PMI surveys showed higher energy prices hit demand and drove up input costs in March. The composite index fell to 50.5 in the month from 51.9 in February. The drop was mostly driven by the services sector, while output in the manufacturing sector was little changed, Allen-Reynolds says. Still, worse could be to come. "Potential supply-chain disruption had prompted some companies to bring purchases forward... That boost won't last forever," he says. Meanwhile, output expectations hit a 10-month low. "We suspect that the economy will stagnate rather than contract, but there are clearly risks in both directions." (don.forbes@wsj.com)
1013 GMT - U.S. Treasury yields continue to rise as uncertainty around the development in the Middle East dominate the market. "Conflicting signals over the prospect of a diplomatic resolution kept markets on edge," Sky Links Capital Group's Daniel Takieddine says in a note. Risk sentiment remains fragile, with the market swinging between hopes and concerns about the geopolitical situation, he says. Prolonged tensions and disruptions in the Middle East could continue to fuel inflation expectations and force central banks to adopt a more cautious approach, he says. The two-year Treasury yield is up 5.6 basis points at 3.885%. The 10-year yield rises 3.2 basis points to 4.366%, according to Tradeweb. (emese.bartha@wsj.com)
1000 GMT - U.K. house builder Bellway is being affected by sector headwinds, including the conflict in the Middle East, Interactive Investor analyst Victoria Scholar says in a note. The war in Iran and the ensuing economic uncertainty will likely affect consumer confidence and add pressure in terms of build-cost inflation as the energy shock looks set to push up construction costs such as labor and materials, Scholar says. Furthermore, the Bank of England's monetary policy paralysis has affected shares as they have fallen over 25% since the start of the year on the back of inflation fears, the prospect of higher-for-longer interest rates, and worsening mortgage affordability, Scholar says. Shares are down 8.8% at 19.49 pounds. (anthony.orunagoriainoff@dowjones.com)
0956 GMT - Sterling remains weaker against the dollar and the euro after a measure of U.K. manufacturing and services activity fell more than expected in March. Gilt yields also remain lower. The provisional composite purchasing managers' index fell to 51.0 in March from 53.7 in February. Economists in a WSJ survey had forecast 52.5. The survey showed cost pressures accelerated rapidly as energy prices rose due to the Middle East conflict. Business confidence also dropped. Sterling falls to an intraday low of $1.3376, versus $1.3385 before the data. The euro rises to an intraday high of 0.8658 pounds, from 0.8651 beforehand. Ten-year gilt yields are last down 1.6 basis points at 4.918%, Tradeweb data show. (renae.dyer@wsj.com)
0924 GMT - The euro stays under pressure versus the dollar after the release of a weaker-than-expected flash eurozone purchasing manager's index survey for March. The eurozone composite PMI fell to 50.5 in March from 51.9 in February. Economists in a WSJ survey expected a reading of 51.0. The survey also showed the rate of input price inflation rose sharply as energy prices jumped due to the Middle East conflict. The data "underscore how the European Central Bank is no longer in a 'good place' with respect to growth and inflation and will have to tread a cautious policy path, S&P economist Chris Williamson says in the survey. The euro falls 0.2% to $1.1587, little changed from levels before the data. (renae.dyer@wsj.com)
0907 GMT - The October 2035 gilt trades cheap and is likely to attract demand during the auction at 1000 GMT, RBC Capital Markets strategists say in a note. "The optimism and stability in the market should be supportive for demand at Tuesday's auction," they say. The October 2035 gilt yield has increased from 4.234% prior to the Middle East war and last trades at 4.904%, Tradeweb data show. (miriam.mukuru@wsj.com)
0853 GMT - The euro could stay weaker against the dollar this week as a swift end to the Middle East conflict looks unlikely, keeping energy prices elevated, Commerzbank's Volkmar Baur says in a note. President Trump announced Monday that the U.S. would postpone attacks against Iranian energy infrastructure for five days following constructive talks but Iran denied such discussions took place. The postponement shifts the focus to Saturday, Baur says. The risk premium in the oil market that was priced out Monday is therefore likely to slowly build again over the course of the week unless there's positive news on talks, or if it becomes clear that ships can pass through the Strait of Hormuz, he says. The euro falls 0.2% to $1.1592. (renae.dyer@wsj.com)
0832 GMT - Sterling has limited scope to rise against the euro as the bar is exceptionally high for the Bank of England to raise interest rates as the market expects, ING's Chris Turner says in a note. Sterling remains surprisingly well-supported versus the euro even after the market scaled back expectations for BOE rate rises on Monday, he says. The adjustment in rates came after President Trump said he would postpone military strikes against Iranian energy infrastructure for five days. However, one-month risk reversals for euro versus sterling show the skew towards call options, or bets on it rising, remains elevated, LSEG data show. The euro trades flat at 0.8646 pounds and ING expects falls to be capped at 0.8600. (renae.dyer@wsj.com)
(END) Dow Jones Newswires
March 24, 2026 07:30 ET (11:30 GMT)
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