The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0910 ET - Sterling and the euro might struggle to sustain any gains if the Bank of England and European Central Bank raise interest rates more aggressively than markets expect, MUFG Bank's Lee Hardman says in a note. While faster rate rises could offer some near-term support for sterling and the euro, those gains would "ultimately prove short-lived if tighter monetary policy alongside higher energy prices trigger a deeper economic slowdown/recession for European economies." The softer growth momentum indicated by Tuesday's U.K. and eurozone purchasing managers' surveys could dampen expectations for more aggressive rate rises. However, the BOE and ECB are still likely to raise rates if the inflation shock proves more prolonged, he says. (renae.dyer@wsj.com)
0900 ET - A gradual calming in CoinMarketCap's Fear and Greed Index appears to underpin an improvement in bitcoin prices this month. Bitcoin is trading at $71,400 this morning, making it 5.4% that prices have improved in the past month, according to FactSet data. Meanwhile, CoinMarketCap's Fear and Greed Index is at 37--off from a high of 45 reached last week, but considerably higher than readings as low as 5 last month. Readings between 20 and 40 are considered "fear," but some analysts call for upside in prices in the short-term. Hopes that the conflict in the Middle East may be getting closer to a resolution are part of the optimism. (kirk.maltais@wsj.com)
0850 ET - The front end of the Canadian yield looks "cheap to us, on both an outright basis and tactically versus the US," says Andrew Kelvin, head of Canadian and global rates strategy at TD Securities. Traders are now pricing in nearly three quarter-point rate increases from the Bank of Canada before year's end, in anticipation of higher energy prices lifting inflation. Kelvin says the selloff in short-term government of Canada bonds doesn't reflect underlying domestic conditions that include a weak labor market, excess spare capacity, and a sharp slowdown in core inflation. Core CPI strips out volatile items like food and energy. Kelvin says there is a possibility that BOC might have to raise rates, "but we'd emphasize the near-term risks probably skew toward easing." (Paul.Vieira@wsj.com; @paulvieira)
0848 ET - Credit spreads on European financial services sector bonds trade wider compared to 2025 levels due to concerns about private credit risk, ING's Suvi Kosonen says in a note. There are concerns that prolonged liquidity challenges in private credit funds could spread to the traditional banking sector in case the funds tap banks' credit lines, Kosonen says. "Bonds issues by private credit funds have underperformed this year, both in euros and in U.S. dollars, reflecting the weaker outlook," she says. (miriam.mukuru@wsj.com)
0844 ET - Hope is cautiously back as global markets sense a U.S.-Iran deal may be near, reviving demand for Treasurys and sending yields lower. Oil futures decline more than 4%, while the WSJ Dollar Index rises 0.1%. Negotiators remain far apart, but talks of a potential meeting tomorrow spark cautious hopes of an end to the constraints on energy markets. Investors keep betting the Fed will remain on hold for the time being. The 10-year yield slips to 4.348% from yesterday's 4.390%. The two-year is down to 3.896% from 3.926%. (paulo.trevisani@wsj.com; @ptrevisani)
0817 ET - The decline in Germany's Ifo index shows the Middle East war has blasted away resurgent optimism among businesses, ING's Carsten Brzeski says in a note. "Coming from the highest level since last summer, Germany's most prominent leading indicator took a severe hit as the war in the Middle East, soaring energy prices, and new uncertainty dented previous optimism." The index declined to 86.4 in March, from 88.4. However, the conflict has changed a lot but not everything. The situation isn't yet comparable to 2022, when energy prices and fiscal stimulus during the pandemic fueled an inflation wave and then a wage-price spiral, Brzeski says. The drivers of Germany's rebound, especially fiscal stimulus for defense and infrastructure, are still present, he says. (edward.frankl@wsj.com)
0807 ET - Bitcoin rises to a one-week high on cautious optimism for a resolution to the Middle East conflict. The U.S. sent Iran a 15-point plan to end the war, The Wall Street Journal reports. The plan centers around President Trump's previous demands of Iran, including dismantling main nuclear sites and fully reopening the Strait of Hormuz. Mediators are pushing for a U.S.-Iran meeting by Thursday. However, Iran has indicated a high bar to re-enter cease-fire negotiations. "Crypto markets are trading more in line with broader risk sentiment again, stabilizing after earlier weakness tied to the oil-driven risk-off move," Saxo Bank analysts say in a note. Bitcoin rises 2.6% to a high of $72,0003, LSEG data show. (renae.dyer@wsj.com)
0804 ET - Middle East countries' default protection costs remain elevated as Middle East tensions linger. The U.S. has sent a 15-point plan to end the war with Iran, leading to a mild improvement in market sentiment, although uncertainties remain. Bahrain's 5-year credit default swaps last trade at 309 basis points, compared to 214bps prior to the Middle East war, S&P Global Market Intelligence data show. Emirate of Dubai's 5-year CDS last trade at 86bps, compared to 50bps before the war. (miriam.mukuru@wsj.com)
0758 ET - Recent Canadian economic data points to a weaker start to 2026, with broad labor market weakness in January and February and very weak trade numbers in January, signally slower aggregate demand, Scotiabank says. Its economists now expect GDP growth for 1Q will undershoot earlier expectations, which is likely to mean average growth of 1.3% for 2026. Still, Scotiabank reckons there are several forces that should support a recovery later in the year and into 2027, including fading tensions, past rate cuts feeding through, and government spending. As a result, it expects growth to accelerate to 2% in 2027. (robb.stewart@wsj.com; @RobbMStewart)
0740 ET - Although nearterm growth in Canada has softened, it's likely to be a temporary slowdown and so not something the Bank of Canada will react to, Scotiabank reckons. It also doesn't expect the central bank will react to the direct impact of higher oil prices on inflation, even if the shift in the balance of inflation risk does argue for caution. As a result, Scotiabank analysis assumes the Bank of Canada will begin gradually removing monetary stimulus and move toward a more neutral stance by year end. That suggests it will leave interest rates on hold near-term, until the USMCA renegotiations are resolved, before lifting rates three times in the second half of this year. (robb.stewart@wsj.com; @RobbMStewart)
0723 ET - The cost of insuring euro credit against default declines slightly as market sentiment improves after the U.S. sent a 15-point plan to end the Middle East war. The iTraxx Europe Crossover index of euro high-yield credit default swaps falls 12 basis points to 330bps, after hitting an 11-month high of 365bps on Monday, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)
0703 ET - The sharp worsening in March's Ifo survey reflects German companies' legitimate concerns about the Iran war, Commerzbank's Joerg Kraemer says in a note. The headline business-climate index fell to 86.4 in March, from 88.4 in February, with all major sectors affected. The expectations index, which gauges the outlook for the six months ahead, plummeted to 86.0 from 90.2. "If the war in the Middle East and the closure of the Strait of Hormuz do not end quickly, the economic damage signaled by today's slump in Ifo business expectations will eventually materialize," Kraemer says. In that case, little of the economic upswing economists harbored recently would remain. But if the war ends in a few days, Ifo's index would recover in April, he adds. (edward.frankl@wsj.com)
(END) Dow Jones Newswires
March 25, 2026 09:10 ET (13:10 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments