The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1031 GMT - Liquidity at the front end of the U.S. Treasury yield curve has deteriorated amid elevated volatility since the onset of the Middle East conflict, Morgan Stanley strategists say in a note. This has led to wider bid-ask spreads and high volumes signaling forced flows, they say. "Elevated volumes alongside wider spreads suggest flows are driven by necessity rather than desire." Two-year bid-ask spreads have widened around 27% versus February, they say. "Large intraday yield swings are increasingly coinciding with thin liquidity conditions in the front end." (emese.bartha@wsj.com)
1027 GMT - Oil prices extend losses, plunging more than 5% as diplomatic efforts to end the Iran war overshadowed continued military strikes and the effective blockade of the Strait of Hormuz. In mid-morning European trading, Brent crude is down 5.4% to $94.82 a barrel, while WTI falls 5% to $85.23 a barrel. Still, "the conflict has triggered widespread energy stress, including surging diesel prices, fuel shortages in multiple countries, and increased demand for alternative supplies, while uncertainty over negotiations and ongoing attacks continues to keep markets highly volatile," says Soojin Kim, analyst at MUFG. (giulia.petroni@wsj.com)
0955 GMT - The U.K. inflation data due to be released in April will carry more weight than Wednesday's print as it will show the impact of the Middle East conflict, RBC Capital Markets strategists say in a note. Tensions in the Gulf region have led to a sharp rise in energy costs, raising the risk of high inflation around the globe. The latest data shows annual U.K. inflation in February was 3.0%, unchanged from the January inflation and in line with the consensus forecast by economists in a WSJ poll. (miriam.mukuru@wsj.com)
0949 GMT - Markets lower their expectations of the Bank of England raising interest rates in the coming months on prospects of a possible end to the Middle East conflict. This follows media reports that the U.S. proposed a cease-fire in the Middle East. Investors fully price in two quarter-point BOE rate increases by the end of the year, having fully priced in three increases and a risk of a fourth at the start of this week, LSEG data show. (miriam.mukuru@wsj.com)
0927 GMT - U.K. inflation data for February showed the annual headline inflation at 3%, unchanged from January and in line with the consensus forecast by economists in a WSJ poll. The steady inflation data and decelerating wage growth indicate that U.K. interest rates are still relatively restrictive, EFG Asset Management's Joaquin Thul says in a note. The Bank of England is likely to keep interest rates unchanged at 3.75% at the April policy meeting, he says. (miriam.mukuru@wsj.com)
0922 GMT - An extended Bank of England interest-rate pause is more likely than hikes, Capital Economics' Ruth Gregory says in a note. The energy-price shock prompted by the Iran war is likely to extinguish U.K. growth and add to the already-high unemployment rate, she says. While a larger and more persistent inflation shock could force the BOE to hike, any tightening cycle would probably be small and short, she says. After inflation was unchanged at 3.0% in February, the rise in oil prices probably raised inflation by 0.3 percentage points in March. "In our baseline scenario, we now think CPI inflation could rise to a peak of 4.6% in the fourth quarter," Gregory says. (edward.frankl@wsj.com)
0854 GMT - A return to the Bank of England's 2% inflation target now looks like a distant memory given the jump in energy prices, Deutsche Bank's Sanjay Raja says in a note. "The bump back in inflation will put to rest any talk of rate cuts this year. And the risks that the BOE reverses course and hikes the bank rate can no longer be dismissed," Raja says. Pump prices have risen by nearly 7% in March and likely to rise by a similar amount in April, he says. The potential for spillovers into other parts of the consumer-price index basket is rising, with fertilizer prices on the rise, shipping costs surging, and the prospects of second-round effects no longer negligible. Inflation is set to peak near 3.5% later this year, he says. (edward.frankl@wsj.com)
0851 GMT - Central banks across Asia have struck a cautious tone around tensions in the Middle East, says OCBC's Lavanya Venkateswaran. The pain from higher energy prices and reduced oil and natural gas imports is akin to a gut punch for economies like India, the Philippines, Thailand and Vietnam, she says. These economies are net energy importers and, absent subsidies, will see building inflationary pressures. Authorities in India, Thailand and Vietnam can shift some of the subsidy burden off-budget, but that kicks the can down the road, the senior economist says. Indonesia and Malaysia can buffer the impact with fiscal cushions, but the duration and persistence of higher oil prices will significantly affect their ability to keep fiscal backstops in place. (fabiana.negrinochoa@wsj.com)
0837 GMT - Eurozone government bond yields fall, tracking moves in U.S. Treasury yields, amid tentative optimism about a potential resolution to the Middle East conflict. The German 10-year Bund yield drops 5 basis points to 2.967%, while yields on other bonds fall by more than that, according to Tradeweb. Yield spreads narrow as a result. The 10-year Italian BTP-German Bund yield spread narrows 4 basis points to 88 basis points. (emese.bartha@wsj.com)
0828 GMT - London's mining stocks gain in opening trade on optimism that there could be a path to de-escalation in the Middle East. Oil prices are moving lower while stocks that were weighed down by inflation fears and the risk of higher interest rates are getting a boost, Hargreaves Lansdown's Matt Britzman writes. The prospect of a meeting between Washington and Tehran later this week is offering optimism that there might be a route to de-escalation. Precious metal miners Fresnillo, Hochschild Mining and Endeavour are all up over 3%. Anglo American rises 3.5%, while copper miner Antofagasta trades 3.2% higher. Glencore gains 1.55%. (adam.whittaker@wsj.com)
0824 GMT - The Swiss franc falls to a six-week low against the euro as tentative hopes for a resolution to the Middle East conflict reduce demand for safe-haven assets. The U.S. has sent Iran a 15-point plan to end the war, The Wall Street Journal reports, citing officials. President Trump said Tuesday he was more confident of Iran's willingness to reach an agreement. Mediators from Turkey, Egypt and Pakistan are pushing for a meeting between U.S. and Iranian officials in the next 48 hours. Meanwhile, Swiss National Bank Chair Martin Schlegel and SNB member Petra Tschudin on Tuesday also reiterated the central bank's increased willingness to use interventions to curb the franc's strength. The euro rises to a high of 0.9168 francs. (renae.dyer@wsj.com)
0821 GMT - U.K. inflation's downward trend over the last six months is likely to be challenged as the Iran war puts pressure on input prices and supply chains, says Pieter Reynders, partner at McKinsey & Co. Annual inflation was unchanged in February at 3.0%, having fallen from 3.8% in September. There was a welcome easing in food and nonalcoholic beverages, though some nonessential categories, such as restaurants and hotels remained elevated, he says in a note. "Inflation remains the top concern for U.K. consumers, cited by 52%, up from 50% a year ago," Reynders says, citing McKinsey data. Attention will now turn to how quickly any renewed pressure on energy and input costs feeds through to prices and behavior, he says. (edward.frankl@wsj.com)
(END) Dow Jones Newswires
March 25, 2026 06:33 ET (10:33 GMT)
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