The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1059 GMT - The cost of insuring against potential price swings in the euro versus the dollar, or implied volatility, is surprisingly low given the intensifying Middle East conflict, Commerzbank's Thu Lan Nguyen says in a note. Options-market pricing shows three-month implied volatility for the exchange rate is 7.8%, LSEG data show. This compares to last year's high of 11.1% when U.S. tariffs were imposed, the 2022 high of 12.9% when Russia invaded Ukraine, and the 2020 pandemic high of 12.1%. That's possibly because the market expects the European Central Bank to respond more quickly to an inflation shock this time and the Federal Reserve to be more cautious given a weak labor market and political pressure to cut rates, Nguyen says. (renae.dyer@wsj.com)
1046 GMT - European luxury companies could be hurt by the Middle East war, but to varying degrees, RBC Capital Markets analyst Piral Dadhania writes. The sector will face fallout from the conflict including a decline in purchasing power, travel disruptions, and supply chain issues, the analyst says. Recent stock price declines reflect fears that the war will continue to weigh on demand and earnings in the second and third quarters, the analyst says. Despite these challenges, Dadhania sees Hermes, Moncler and EssilorLuxottica as attractive opportunities due either to limited Middle East exposure or high margins. Swatch, Richemont and Kering face higher risks to earnings. (andrea.figueras@wsj.com)
1043 GMT - The dollar is likely to strengthen further if the energy price shock stemming from the Middle East conflict intensifies, MUFG Bank's Lee Hardman says in a note. Economies in Asia and Europe will be hit harder compared to the U.S. as the risk of weak growth combined with high inflation, or stagflation, builds, he says. The conflict should continue to dominate currency moves rather than yield spreads, which have moved against the dollar, he says. The market is pricing 17 basis points of Federal Reserve rate rises by year-end, compared to 80bps for the European Central Bank and 90bp for the Bank of England, LSEG data show. However, the DXY dollar index is up 0.5% at 100.109. (renae.dyer@wsj.com)
1021 GMT - Money markets sharply raise expectations of the Bank of England increasing interest rates in the coming months due to inflation concerns. Investors fully price three quarter-point BOE rate increases by September, with a high risk of a fourth by the end of the year, LSEG data show. This contrasts hugely with two rate cuts priced in prior to the Middle East war. "The outlook for UK interest rates has radically changed," AJ Bell's Russ Mould says in a note. "That has significant consequences for consumer and business spending, for the U.K. economy, and for public finances as the government's cost of servicing debt would go up," Ten-year gilt yields surge to 5.105%, their highest 2008, LSEG data show. (miriam.mukuru@wsj.com)
0845 GMT - The euro is at risk of falling further despite speculation that the European Central Bank could raise interest rates in April, ING's Francesco Pesole says in a note. With oil prices elevated on the Middle East conflict, risk sentiment unstable and markets already pricing in three ECB rate rises by year-end, the risks for the euro look "skewed to the downside," he says. If the euro falls back to $1.1450, it would confirm the single currency is not finding much support from tighter U.S.-eurozone rate differentials, he says. Higher energy prices could prove detrimental to the eurozone economy as an energy importer. The euro falls 0.3% to $1.1529. (renae.dyer@wsj.com)
0831 GMT - European natural-gas prices rise as the war in the Middle East enters its fourth week, with the U.S. and Iran exchanging fresh threats over the Strait of Hormuz and energy infrastructure. In early trading, the benchmark Dutch TTF front-month contract rises 3.9% to 61.58 euros a megawatt-hour. Prices have surged more than 90% so far this month, driven by halted shipping through the Strait of Hormuz and severe damage to the world's largest liquefied-natural-gas export facility in Qatar. The disruptions come at a sensitive time for Europe, where EU storage levels remain below 29%, raising the prospect of stiffer competition for LNG cargoes with Asian buyers. "Asian LNG buyers were closely monitoring the situation, with many reluctant to step up purchases in the spot market due to the higher prices," ANZ analysts write. "But the longevity of the disruptions could make that difficult." (giulia.petroni@wsj.com)
0828 GMT - Yields on U.K. government bonds rise further, with 10-year yields again hitting their highest since 2008, as high energy prices raise concerns about a possible resurgence in the U.K. inflation. The sharp rise in gilt yields relative to the U.S. and eurozone peers "emphasizes the U.K.'s vulnerable position as a high inflation economy with weak public finances", XTB's Kathleen Brooks says in a note. Ten-year gilt yields jump 7 basis points to 5.065%, a near 18-year high, shortly after the market open, LSEG data show. (miriam.mukuru@wsj.com)
0815 GMT - Bitcoin stays weak after hitting a two-week low overnight as the widening Middle East conflict dampens risk appetite. President Trump at the weekend threatened to attack Iranian power plants if the Strait of Hormuz isn't opened within 48 hours and Iran warned it would retaliate. "The escalation puts investors in a difficult spot," Danske Bank analysts say in a note. The energy price shock could become permanent if oil infrastructure is hit, they say. However, if the U.S. can take control of the Strait, it would be positive for risk sentiment, they say. Bitcoin rises 0.3% to $68,350 after hitting a low of $67,383, LSEG data show. (renae.dyer@wsj.com)
0813 GMT - The Middle East conflict has started to affect Japan's closely watched annual wage negotiations, clouding the outlook for whether the positive cycle of higher pay leading to more spending and mild inflation will continue. Some oil-related firms have requested a delay in finalizing wage talks in the wake of heightened geopolitical risks, a labor union official says. Preliminary data from Japan's largest labor union group shows its members secured wage increases of 5.26% on average. That is slightly higher than the 5.25% gain recorded in the final results for last year, but lower than the preliminary 2025 figure of 5.46%. (megumi.fujikawa@wsj.com)
0800 GMT - Further increasing exposure to Asian oil proxies could be a gamble as the Middle East conflict becomes prolonged, say DBS Group Research analysts in a note. A longer conflict could keep oil prices well above $100 a barrel, with the potential to reach $150 or higher over the next two quarters in upside scenarios, they say. Volatility in crude prices makes it difficult to value stocks based on $90-$100 oil, they say, a challenge also reflected in the relatively muted share-price performance of global oil majors since the conflict started. The analysts recommend staying invested in upstream and integrated oil stocks such as PetroChina, Cnooc and PTT Exploration & Production, but caution further aggressive positioning would be risky. (megan.cheah@wsj.com)
0754 GMT - Oil prices rise as the U.S. and Iran threaten to widen their targets and escalate the war, with President Trump giving Tehran a deadline to reopen the Strait of Hormuz. Brent crude rises 1.5% to $113.88 a barrel, while WTI is up 3.5% to $98.06 a barrel. Trump said Iran must "fully open" the waterway by Monday evening Washington time, or its power plants will be hit. Meanwhile, Tehran said it would attack key infrastructure across the Middle East if Trump followed through. "With production and exports heavily constrained, investors are sensitive to any threats to supply that could drag on the post-conflict recovery," analysts at BMI say. Brent could reach the $110-$130 a barrel range over the next one-to-two weeks if the conflict drags on, they add. (giulia.petroni@wsj.com)
0741 GMT - The dollar rises as the intensifying Middle East conflict boosts safe-haven assets and energy prices. President Trump at the weekend threatened to attack Iranian power plants if the Strait of Hormuz isn't opened within 48 hours. Iran warned that it would respond to any such attacks. The dollar benefits from its safe-haven status as well as from America's energy independence. Higher energy prices have also prompted markets to pivot towards pricing in the chance of the Federal Reserve raising interest rates this year, LSEG data show. The DXY dollar index rises 0.2% to 99.812.(renae.dyer@wsj.com)
(END) Dow Jones Newswires
March 23, 2026 06:59 ET (10:59 GMT)
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