The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0906 GMT - Market pricing for Bank of England interest-rate rises looks overdone and this poses a risk to sterling, Monex Europe analysts say in a note. The market is pricing in nearly four rate rises by year-end, LSEG data show. Such an aggressive path of rate rises is unlikely given the weak domestic growth outlook and building labor market slack, the analysts say. For now, sterling's direction will be directed by risk sentiment and oil prices in the absence of U.K. data and BOE speeches Monday, they say. Sterling falls 0.2% to $1.3313 against a stronger dollar but the euro drops 0.1% to 0.8660 pounds. (renae.dyer@wsj.com)
0857 GMT - There are clearer signals that the Monetary Authority of Singapore will begin tightening its monetary policy in April, BofA Securities economists write in a note. Singapore could raise its 2026 core inflation forecast, given that the current forecast is for inflation to average 1.0%-2.0% this year, they say. That is especially as imported cost pressures are expected to pick up in the near term, the economists add. "Besides [the] latest guidance, clearer signs of more generalized price pressures are emerging, which at the margin could lead to sharpened policy focus on anchoring inflation expectations." (amanda.lee@wsj.com)
0856 GMT - A striking part of the market response to the Middle East crisis has been the poor performance of some safe havens, says Thomas Mathews at Capital Economics. It might not be surprising that government bonds sold off in the face of an inflationary shock, but gold's struggles are arguably more surprising due to its usual role as a hedge in such situations. Gold slid during the Asia session, wiping year-to-date gains. The weakness could be partly due to the bond market's own troubles, Mathews says. "But its woes may also reflect that it had begun to fare, in some respects, more like a 'risky' asset, and the war may have taken some of the froth out of it." If that's the case, a full rebound isn't guaranteed even if the mood improves. (fabiana.negrinochoa@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)
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)
0823 GMT - The Monetary Authority of Singapore is likely stay on hold in April, despite core inflation rising in February, Barclays economist Brian Tan writes in a note. Core inflation--which is closely watched by the MAS--accelerated in February, mainly due to base effects for uncooked food prices and volatile travel costs. "Our estimates indicate demand-pull pressures remain broadly stable at relatively benign levels," Tan says. The monetary policy statement and other comments from officials next month are likely to sound relatively hawkish, but this may be mainly intended to keep inflation expectations under control, and not to signal monetary policy tightening. (amanda.lee@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)
0802 GMT - Eurozone government bond yields jump, tracking U.S. Treasury yields, as the ever-lengthening war in the Middle East exacerbates investors' inflation concerns. The 10-year Bund yield rises further above 3%, hitting 3.073% in early trade, according to Tradeweb. The 10-year Italian BTP yield rising 9.5 basis points to 4.032%, trading above 4% for the first time since July 2024. The 10-year French OAT yield rises 6.8 basis points to 3.804%, with both Italian-German and French-German yield spreads hitting multi-month highs. (emese.bartha@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)
0735 GMT - Gold prices fall to their weakest level this year as the Middle East conflict escalates, raising concerns over inflation and prospects of higher interest rates. In early European trading, New York futures drop 9.5% to $4,132.90 a troy ounce, extending last week's losses. "Prices recorded their biggest weekly loss since 1983 on concerns higher inflation will see the Fed hike rates," analysts at ANZ say. Surging energy prices--with Brent crude above $100 a barrel--have raised expectations for higher interest rates, dampening the outlook for non-yielding assets. Meanwhile, other precious metals follow suit, with silver futures falling 11.5% to $61.66 an ounce and platinum down 11.4% to $1,745.40 an ounce. (giulia.petroni@wsj.com)
0658 GMT - If the Iran-Iraq war is any guide about Iran's thinking, then Iran's tolerance for pain is way higher than many analysts think, Jefferies' Mohit Kumar says in a note. Also, negotiations and an end of war may be much trickier than U.S. President Trump might be thinking, the global economist says. As the war might be longer than investors were hoping for, "we could see further risky asset repricing and increased focus on stagflation/recession risk than is currently the case," Kumar says. Positioning is not yet clean in a number of assets as investors were hoping for a quick end to the war, so some more position squaring may be due, he says. (emese.bartha@wsj.com)
(END) Dow Jones Newswires
March 23, 2026 05:06 ET (09:06 GMT)
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