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

0812 GMT - Sterling could continue to hand back recent gains if U.K. short-dated rates drift lower and fiscal risks return, ING analysts say in a note. Inflation probably won't reach the 4% threshold seen as the trigger for the Bank of England to raise interest rates while the European Central Bank could deliver one more rate rise, they say. New U.K. Prime Minister Andy Burnham's openness to bigger policy changes means a bolder budget, expected in October or November, cannot be ruled out, they say. The euro rises to a nine-day high of 0.8544 pounds, having hit a 13-month low of 0.8453 last week, according to LSEG. ING expects it to reach 0.88 by year-end and 0.90 in 2027. (renae.dyer@wsj.com)

0806 GMT - Markets increase their expectations of the Bank of England increasing interest rates in 2026 due to rising oil prices and inflation fears. Intensifying conflict in the Middle East has led investors to price in the possibility of high inflation and potential central bank rate hikes to tackle inflation. Investors fully price in one quarter-point BOE rate increase in November and a 93% possibility of a second rate rise in December, LSEG data show. Traders were pricing in a total of 38 basis points of BOE rate rises in 2026, last week. (miriam.mukuru@wsj.com)

0805 GMT - U.S. and eurozone government bond yields rise across maturities, with the 10-year U.S. Treasury and German Bund yields hitting two-month highs of 4.671% and 3.198%, respectively, according to Tradeweb data. Yields have been climbing in recent sessions as renewed escalation in the Middle East prompted oil prices to rise, with Brent last trading 3.80% higher at $97.64. The rise in oil prices could concern policymakers at the European Central Bank ahead of a monetary policy decision later in the day. The ECB is widely expected to keep interest rates on hold, while a rate hike is anticipated in the coming months. (emese.bartha@wsj.com)

0735 GMT - Gold prices fall after reaching a two-week high on Wednesday, as escalating tensions in the Middle East drive oil higher, fueling concerns over inflation and interest-rate hikes. In early trading, gold futures in New York are down 1% to $4,110.30 a troy ounce, after rising in the previous session as dip-buyers emerged despite firmer U.S. yields. Investors now await the Federal Reserve's meeting next week for more cues on the monetary policy outlook. While the U.S. central bank is widely expected to keep rates unchanged this month, traders expect at least one rate hike by the end of the year. Higher interest rates tend to diminish the appeal of non-yielding bullion. (giulia.petroni@wsj.com)

0730 GMT - Bitcoin falls as U.S. stock futures decline amid the ongoing U.S.-Iran conflict and after earnings from Alphabet and Tesla fuelled concerns about AI spending. The U.S. is surging forces, medics and weaponry to the Middle East as President Trump considers expanding the conflict against Iran, WSJ reports. Shares in Tesla and Alphabet fell in after-hours trading after both reported negative free cash flow for the latest quarter and said they expect higher capital expenditures. Bitcoin falls 0.3% to $65,673, LSEG data show. (renae.dyer@wsj.com)

0726 GMT - The euro rises ahead of the European Central Bank's policy decision later in the day. The ECB is largely expected to keep rates on hold when it announces its decision at 1215 GMT but markets are pricing in an 84% chance of a 25 basis-point rate rise in September, LSEG data show. Investors will be keen to hear the ECB's response to the renewed rise in oil prices stemming from the escalation in the U.S.-Iran conflict. The ECB is likely to cement the prospect of a rate rise in September, although the euro is unlikely to benefit much since this is largely priced in, Commerzbank's Antje Praefcke says in a note. The euro rises 0.2% to $1.1427. (renae.dyer@wsj.com)

0718 GMT - Yields on 10-year U.K. government bonds, or gilts, rise to a two-month high as soaring oil prices raise inflation risk and increase the possibility of the Bank of England increasing interest rates in 2026. "The latest rise in energy prices led to fresh concerns about a more prolonged stagflationary shock, with investors pricing in more inflation as a result," Deutsche Bank Research strategists say in a note. Ten-year gilt yields climb 3.8 basis points to a high of 5.080%, Tradeweb data show. (miriam.mukuru@wsj.com)

0717 GMT - Eurozone government bond yields edge higher in opening trade as oil prices rise due to continued Middle East conflict while investors await a European Central Bank's policy decision later in the day. The ECB is expected to leave interest rates on hold, but markets will watch for any comments on the potential impact of recent oil-price rises and the prospects for further rate increases in the coming months. "Markets will be very attentive to clues for September, which features updated forecasts," analysts at KBC Bank say in a note. The 10-year Bund yield rises 0.9 basis points to 3.187%, according to LSEG data. The magnitude of the rise is broadly in line with that of U.S. Treasury yields. (emese.bartha@wsj.com)

0713 GMT - The Monetary Authority of Singapore is likely to deliver a "hawkish" pause of monetary-policy tightening on Monday, two economists at BofA Global Research say in commentary. Data released earlier showed Singapore's core inflation stood at 1.6% in June, between forecasts of BofA and consensus, and only slightly firmer than May's reading, the economists note. "Commentary in the CPI outlook was almost identical to last month, barring updates to latest global energy price trends given recent developments," the economists say. The MAS will probably tighten monetary policy by steepening the slope of the Singapore dollar nominal effective exchange rate's band by 50 bps to 1.5% in October, the economists add. (ronnie.harui@wsj.com)

0654 GMT - The dollar eases in the absence of fresh catalysts to propel the currency higher. In a quiet week of U.S. economic data, investors are looking ahead to the Federal Reserve's policy decision on July 29 for any hints on whether the central bank could raise interest rates this year. The Fed is widely expected to leave rates unchanged Wednesday but the market is fully pricing in a rate rise by September as oil prices rally on the recent escalation in the U.S.-Iran conflict. The DXY dollar index falls 0.1% to 101.009, having reached a one-week high of 101.210 Tuesday.(renae.dyer@wsj.com)

0602 GMT - Eurozone government bond markets may be relieved on Thursday as the European Central Bank is set to remain on hold and President Christine Lagarde not pre-committing to a September rate hike, Commerzbank's Rainer Guntermann says in a note. Money markets expect the ECB to keep interest rates on hold Thursday, according to LSEG. Lagarde, however, will probably open the door for a rate hike in September, the rates strategist says. "Year-to-date highs in 10-year Bund yields close to 3.2% should provide support, with tomorrow's PMIs likely reminding markets about the challenging growth backdrop," Guntermann says. He adds that the latest dynamics in energy prices add spice to the outlook for interest rates. (emese.bartha@wsj.com)

0555 GMT - There is increasing focus on the outright level for government bond yields, such as the 30-year U.S. Treasury yield, Danske Bank's Kristoffer Kjaer Lomholt says in a note. The 30-year Treasury yield is trading above 5% "and this is becoming more persistent," the director in fixed income and FX research says. The escalation of the war in the Middle East, where the Houthis hit two Saudi oil tankers in the Red Sea, and the subsequent rise in the oil price with Brent approaching $100 per barrel, is adding pressure on inflation ahead of next week's Federal Reserve FOMC meeting, he says. The 30-year Treasury yield trades 0.2 basis points higher at 5.149%, near a two-month high, according to Tradeweb. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

July 23, 2026 04:12 ET (08:12 GMT)

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