The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1440 ET - The war in Iran will hobble but not derail the Canadian economy, says Oxford Economics' head of Canada research, Tony Stillo. Stillo forecasts that headline inflation to jump from its sub-2% level to around 3.5% in 2Q, fueled by higher oil prices. Stillo, however, says the increase in core prices -- which strips out food and energy -- will likely be limited because of excess capacity sloshing around in the economy. "We expect the Bank of Canada to look through the energy price shock, provided it remains temporary," Stillo says. Oxford also doesn't expect much of hit to consumer spending, as it anticipates households to dip into savings. Lower-income households are also set to receive a federal rebate to help cope with higher food prices. (paul.vieira@wsj.com; @paulvieira)
1427 ET - The above-consensus rise in Mexican inflation in mid-March, due in large part to a jump in tomato prices, is likely to keep the Bank of Mexico on hold this week, analysts and Grupo Financiero Banorte say in a note. CPI rose 0.62% in the first half of the month, pushing the annual inflation rate up to 4.63% from 4.13% in the second half of February. Annual core inflation was steady at 4.46%. "We believe this result, combined with a complex outlook for inflation due to the conflict in the Middle East and other factors, will lead Banxico to extend the pause in its rate-cutting cycle," leaving its benchmark rate at 7%, they say. The central bank's rate decision is scheduled for Thursday. (anthony.harrup@wsj.com)
1213 ET - It may not be the time to buy long-term Treasurys just yet, Franklin Templeton's Sonal Desai says. "We are disinclined to extend duration into the current sell-off in U.S. 10-years, because we think that there may be a bit more for this to go." She estimates the benchmark yield, which rises when bond prices decline, could still rise above 4.5%. It's currently at 4.38%. Uncertainty is the main reason to remain cautious. "It's premature to either be calling for catastrophic global consequences…but equally, it would be completely wrong to assume that we're going to go back to business as usual in a few weeks' time." (paulo.trevisani@wsj.com; @ptrevisani)
1209 ET - Markets were pricing too many interest rate cuts by the Fed and adjustments triggered by the war in the Middle East only corrected some of that, Franklin Templeton's Sonal Desai says. She had anticipated one cut this year, prior to the war, but now "we don't see the Fed being in a position to comfortably start a cutting cycle again." Desai says the duration of the war --and the energy supply disruption it has caused-- will determine whether or not to reshuffle investment positions. "What we have been focused on is remaining relatively high in quality and remaining...relatively on the shorter side." (paulo.trevisani@wsj.com; @ptrevisani)
1203 ET - European companies with lower credit ratings are more exposed than higher rated corporates to the effects of the Middle East war, Societe Generale's Juan Valencia says in a note. Potentially lower economic growth and higher borrowing costs caused by the war are likely to hurt companies with low credit ratings, Valencia says. The developments could lead to an increase in default rates, he says. (miriam.mukuru@wsj.com)
1159 ET - It doesn't take a very big jump on oil prices to push U.S. inflation further away from the Fed's 2% target, Franklin Templeton's Sonal Desai says. She estimates that if crude prices were to stay at around $85 a barrel for a period of time, it would push headline inflation closer to 4% than to 3%. Desai expects the Fed to stay put this year and doesn't see an interest rate increase as likely. WTI is trading up 4%, to $92 a barrel. Futures markets price high odds of a prolonged Fed hold, with a hike more likely than a cut, according to LSEG. (paulo.trevisani@wsj.com; @ptrevisani)
1136 ET - The war in the Middle East is likely to result in wider credit spreads for European bank bonds, ING's Maureen Schuller says in a note. Uncertainties surrounding the war and its impact on global economies is expected to raise the risk premium on bank bonds, Schuller says. "The subordinated side of the bank bond spectrum remains most vulnerable to further adjustment, in our view." (miriam.mukuru@wsj.com)
1135 ET - The Norwegian krone faces a retracement after solid gains at the start of the year, Barclays analysts say in a note. The currency is lifted by higher energy prices stemming from the Iran war due to Norway's position as a major oil exporter. It's also supported by expectations that the Norges Bank could pivot towards raising interest rates. However, gains from energy supply shocks tend to be limited and short-lived, the analysts say. Expectations for a shift towards rate rises also look overdone, they say. Barclays expects the euro to rise to 11.50 krone by the second quarter. The euro falls 0.8% to 11.2212 krone, having reached a three-year low of 10.9244 last Thursday, LSEG data show. (renae.dyer@wsj.com)
1121 ET - Desjardins Group chief economist Jimmy Jean says the firm is upgrading its Canadian economic outlook, due to an anticipated boost to investment and sales for country's energy sector. Jean says growth in 1Q is set to rebound after a contraction in the previous quarter. The upgrade starts in 2Q, Jean says, with Desjardins expecting annualized growth of 2.5%. Offsetting the boost to income from elevated energy prices will be higher inflation that is expected to squeeze households, he adds. "While the terms of trade are improving overall, gains are partial and not equally distributed," Jean says. He adds the boom in energy comes amid a gloomier outlook from a weak labor market, trade-policy uncertainty and an extended housing slump. (paul.vieira@wsj.com; @paulvieira)
1107 ET - Service providers and manufacturers differed in future sentiment for business output in March, according to a survey from S&P Global. In manufacturing, war-related concerns were countered by reduced worries over the adverse impact of tariffs and hopes of strengthening domestic demand for U.S.-made goods, resulting in growth expectations improving to their highest for 13 months, the survey said. Conversely, service providers signaled their weakest outlook since last October, commonly citing concerns over the impact of high energy prices on the cost of living, as well as higher interest rates, financial market worries and war related disruptions to travel. (jessica.coacci@wsj.com; @jessica_coacci)
1103 ET - Ukraine's sovereign bonds look expensive given the ongoing war with Russia and the Middle East war, Oxford Economics' Evghenia Sleptsova says in a note. "The 2029 bond is trading around 75 cents, while Oxford Economics' fair value estimate is 57 cents," she says. Market pricing is based on the assumption that the war with Russia will end by 2028, underpricing the risk of the war continuing beyond 2028, Sleptsova says. In addition, the Middle East war and higher energy costs are expected to add to Ukraine's debt problems, she says. "Each $10 increase in the oil price would add about $700million to $1billion in higher energy import costs, widening [Ukraine's] current account deficit." (miriam.mukuru@wsj.com)
1100 ET - War related shipping issues were a key cause of longer supplier delivery times in March, according to an S&P Global survey. Supply delays were more widely reported by manufacturers than at any time since October 2022. In addition to shipping-related disruptions due to the war in the Middle East, upward pressure on supplier lead times was also caused by an increase in purchasing by factories, the survey says.(jessica.coacci@wsj.com; jessica_coacci)
(END) Dow Jones Newswires
March 24, 2026 14:40 ET (18:40 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments