The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.

0942 GMT - Markets are pricing in a higher possibility of the Bank of England increasing interest rates in the coming months following fresh tensions between the U.S. and Iran. The U.S. launched airstrikes on Iran on Wednesday night while Iran attacked ships transiting the Strait of Hormuz. Investors are worried about the Middle East conflict possibly causing oil supply disruptions and creating inflationary pressures. Markets currently price in a total of 31 basis points of BOE rate rises in 2026, up from 23bps priced in early Wednesday prior to U.S. President Trump's announcement that the ceasefire with Iran was over, LSEG data show. (miriam.mukuru@wsj.com)

0936 GMT - Debt issuance in the Gulf Cooperation Council countries rose about 14% on year to $116.8 billion in the first half of 2026, even as elevated rates, inflation concerns and regional geopolitical tensions weighed on global debt markets, according to Kamco Invest. The increase was supported by strong supply from Saudi Arabia and the U.A.E., as well as a sharp rebound in Kuwait, Kamco says. Corporates accounted for about 64% of issuance, while conventional bonds rose around 41% to $86.4 billion and sukuk--Islamic bonds--fell about 26% to $30.5 billion. GCC credit spreads stayed tight at about 78 basis points, reflecting strong sovereign balance sheets and investor demand for Gulf debt. (farhan.rafid@wsj.com)

0904 GMT - Bank Negara Malaysia likely held back from turning more decisively hawkish after the recent flare-up in Middle East tensions renewed concerns over risks to economic growth, Barclays economist Brian Tan says in a note. While resilient exports, supported by the AI-driven cycle, are expected to strengthen the case for tighter policy over time, policymakers are likely to wait for greater certainty that geopolitical tensions have eased. Barclays continues to expect a 25bp rate hike in September, taking the policy rate to 3.00%. (yingxian.wong@wsj.com)

0854 GMT - The cost of default protection for euro-denominated credit falls as risk appetite improves after oil prices turn lower. Oil prices jumped on Wednesday after President Trump said that the Iran ceasefire was over. Traders are likely to remain cautious given the uncertainty around the U.S.-Iran conflict, ActivTrades Ricardo Evangelista says in a note. The iTraxx Europe Crossover index of euro high-yield credit default swaps falls 5 basis points to 246bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)

0842 GMT - Emerging-market economies are forecast to grow at around 3.3% in 2026, a considerable decline from 4.2% growth in 2025, CreditSights' Regis Chatellier says in a note. The impact of the Middle East conflict has been more pronounced on emerging-market economies excluding China, he says. Higher energy prices contributed to a slowdown in business activity in these economies in the second quarter of 2026, Chatellier says. "Economic activity in Eastern Europe is expected to remain subdued due to declining exports - particularly in the automotive sector." (miriam.mukuru@wsj.com)

0835 GMT - Sterling's attractive yields could allow it rise further against the euro in the near term as long as U.K. fiscal concerns don't re-emerge, RBC Capital Markets' Daria Parkhomenko says. The euro versus sterling screens pretty well as a carry trade--where investors borrow in lower-yielding currencies to invest in ones with higher yields--, she says. "If fiscal isn't a big concern in the near term and the market is running with a theme of carry, then you can certainly see a scenario where euro-sterling continues to move lower." The key is who Andy Burnham picks as Treasury chief if he becomes U.K. prime minister, she says. The euro falls to a one-year low of 0.8516 pounds, according to LSEG. (renae.dyer@wsj.com)

0759 GMT - Sterling rises to a one-year high against the euro and a three-week high versus the dollar as renewed U.S.-Iran tensions boosts expectations that the Bank of England could raise interest rates in response to elevated oil prices. The oil price shock is reinforcing the BOE tightening story, Monex Europe analysts say in a note. "The U.K. inflation problem remains more persistent than in the U.S. or the euro area," they say. The gains also follow a recent easing in U.K. political concerns and the International Monetary Fund upgrading its U.K. growth outlook. Sterling rises to as high as $1.3430 and the euro falls to a low of 0.8516 pounds, LSEG data show. (renae.dyer@wsj.com)

0755 GMT - Expectations that the European Central Bank could deliver another interest-rate rise in September is supporting the euro, ING's Chris Turner says in a note. The euro showed resilience to the jump in oil prices Wednesday due to renewed U.S.-Iran tensions as yields spreads narrowed in favor of the single currency, with euro swap rates rising more than U.S. short-dated rates, he says. However, the prospect of the Federal Reserve raising rates is the "more dominant theme" and could see the euro fall back below $1.14, he says. The euro rises 0.2% to $1.1436. (renae.dyer@wsj.com)

0755 GMT - The Bank of Japan is likely to remain on track to raise interest rates again in October, given the outcome of Thursday's branch managers' meeting, says SMBC Nikko Securities economist Yoshimasa Maruyama. BOJ branch managers noted resilience in production despite Middle East tensions, and the potential for further price pass-through. "Overall, this can be seen as a step forward toward an additional rate hike," Maruyama says. "However, the BOJ report and the reporting from branch managers do not convey a sense of urgency to implement another hike at the next meeting," he adds. (megumi.fujikawa@wsj.com)

0752 GMT - The Bank of Korea is widely expected to raise interest rates by 25 bps on July 16, but its guidance on the won may matter more than the hike itself, economists at BofA say in a note. Policymakers are likely to focus on persistent weakness in the Korean won, which has kept inflation elevated despite easing oil prices and repeated warnings by authorities. They say continued foreign equity outflows and exchange-rate volatility strengthen the case for further policy normalization, though back-to-back rate increases aren't their base case. Markets will also watch whether the central bank signals greater concern over financial stability risks from rising home prices and leveraged ETF trading. (jihye.lee@wsj.com)

0744 GMT - Singapore's core inflation has remained surprisingly muted during the energy shock, but renewed oil-market volatility means it's too early to dismiss risks, Goldman Sachs analysts say. The core inflation response so far partly reflects that--the gauge excludes accommodation and private transport. And since electricity tariffs are reset quarterly based on fuel costs over a prior reference window, the late February energy spike will only emerge in 3Q. The coming 17% tariff increase is big--and will be felt by the 63% of households and businesses on tariff-linked plans. The rest aren't fully insulated either. Whether that remains a one-off MAS can look past, or whether it affects wages, business margins, services prices and inflation expectations remains to be seen. For now, GS thinks MAS will stand pat through 2026. (fabiana.negrinochoa@wsj.com)

0736 GMT - The Bank of Japan's regional economic report supports the bank's view of solid economic development and wage growth, says Goldman Sachs economist Akira Otani. The report says that many companies are considering passing on rising costs to consumers from this summer onward, signaling mounting concerns at the central bank over risks of higher prices, Otani says. Thursday's report highlights fears in the retail sector that higher prices are already damping consumer spending. (megumi.fujikawa@wsj.com)

(END) Dow Jones Newswires

July 09, 2026 05:42 ET (09:42 GMT)

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