The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1003 ET - The ECB's statement alongside its decision to hold rates suggests that policymakers think that the inflationary effects of higher energy prices will outweigh the disinflationary effects of weaker economic growth, Capital Economics' Jack Allen-Reynolds says. Should energy prices keep rising, the balance of opinion could shift towards getting on the front foot by hiking in of April, and perhaps by as much as 50 basis points, he says in a note. If oil and natural-gas prices remain close to their current levels, headline inflation could rise above 3% by April and above 4% in the summer, Allen-Reynolds notes. "We doubt that the ECB would 'look through' a shock that size," he says. (edward.frankl@wsj.com)
1001 ET - The European Central Bank became the seventh central bank to announce unchanged rates in the last 24 hours, acting cautiously in face of the uncertainty stoked by the energy crisis, Premier Miton Investors' Neil Birrell says in a note. "Uncertainty abounds, with spiking energy prices fuelling inflationary fears," the chief investment officer says. "Markets are reacting to these rising risks, and central banks must do so too." Central banks have no choice but to be cautious in approach, the problem being that growth is now a real risk, as recognised by the ECB in their statement, he says. "The outlook is grim at the moment, with no immediate resolution in sight." (emese.bartha@wsj.com)
1000 ET - Mortgage rates are bouncing back up and home-sale prices are rising, Redfin says. The weekly average mortgage rate rose to 6.11% last week, the highest level since the start of 2026, as inflation jitters and the war in Iran rattled markets. The daily average mortgage rate jumped higher, to a six-month peak of 6.41% on Friday, and has since dropped slightly to 6.31%, Redfin says. The median U.S. home-sale price was $387,000 during the four weeks ending March 15, up 1.3% year-over-year, according to Redfin. The median monthly payment is $2,649, which is down 2.7% year over year but the highest it has been in nine months, Redfin says. New listings are up 1.2%, the second straight week of increases after four months of declines. (chris.wack@wsj.com)
1000 ET - Unless inflation expectations trend significantly higher from here, the bar for a Bank of England interest-rate hike remains high, Quintet's Daniele Antonucci says in a note. The dataflow in the next few weeks will be crucial, as the situation for energy prices remains fluid and highly uncertain, he says. "Despite weak domestic growth, the dominant concern is that inflation expectations could de-anchor," he says. Wage rises are easing, but not enough to offset the renewed price pressures coming through from the Iran war. "The next policy meeting could take place against a significantly changed backdrop if energy markets continue to be disrupted," Antonucci says. (edward.frankl@wsj.com)
0956 ET - Interest-rate hikes are now a real risk for the U.K. economy, Deutsche Bank's Sanjay Raja says in a note. The message from the Bank of England as it held rates was that it will guard against rising inflation expectations should it lead to more persistent price pressures, he says. Should energy prices stick at current levels, policymakers could be forced into pushing rates higher to curb inflation, which bank staff now see inflation at 3%-3.5% over the coming quarters, Raja says. "The probability of hikes will have risen meaningfully following today's decision with all members noting that they will know more by the April decision," Raja says. (edward.frankl@wsj.com)
0953 ET - Weakness in the U.K. labor market makes the current energy shock different from that seen in 2022, says Jessica Hinds at Fitch Ratings in a note. Persistently-high unemployment is likely to keep a lid on inflation and allow the Bank of England to ease its key rate towards 3%, Hinds says. "On the assumption that the oil price spike is relatively short lived, we would continue to think that the next move will be a cut, not a hike," she says. The central bank kept rates unchanged on Thursday. It indicated that a prolonged shock could prompt more restrictive policy, but that a weaker economy could warrant cuts. "Nevertheless, the risk to our view is that the uncertainty will encourage policymakers to be more cautious in their approach to loosening policy," Hinds says. (don.forbes@wsj.com)
0950 ET - Eurozone government bond yields remain higher after the European Central Bank left policy rates unchanged, as expected. The ECB warned about a "material impact" of the Middle East conflict on inflation. "The Iranian war has certainly made decisions more difficult for the ECB," says Aviva Investors' Ed Hutchings. "With growth indicators already beginning to pick up ahead of this, the ECB could well be more on the front foot in addressing any unwanted inflationary fallouts," the head of rates says. The 10-year German Bund yield is up 3.9 basis points on the day at 2.987% after the decision, edging down from around 2.995% beforehand, Tradeweb data show. The euro rises briefly to $1.1504 before dropping back to $1.1482, up 0.3% on the day. (emese.bartha@wsj.com)
0933 ET - The Bank of England Monetary Policy Committee "stands ready to act", signaling a tone in stark contrast to the dovish one struck at the last meeting, with the shift driven by the shock to energy supply, BlackRock Investment Institute's Vivek Paul says in a note. Just three weeks ago, markets priced in two quarter-point rate cuts this year. Now they are pricing in the possibility of two rate increases as the BOE's forward guidance puts hikes on the table, the U.K. chief investment strategist says. Oil and gas prices have surged due to production and delivery fallouts in energy due to the Middle East conflict. "Policymakers face an even more challenging backdrop in a world shaped by supply," he says. (emese.bartha@wsj.com)
0917 ET - The Bank of England's minutes suggests the Monetary Policy Committee is "very alive" to the risks stemming from the Middle East crisis, Franklin Templeton Institute's Michael Browne says in a note. "While that may no be enough for the market today, investors should be re-assured that they will act, even though a rate rise would be bad news for the economy," the global investment strategist says. Bond markets are nervous and need reassurance that monetary authorities are on top of their brief and prepared to raise interest rates sooner rather than later, he says. (emese.bartha@wsj.com)
0913 ET - Money markets raise their expectations of the Bank of England increasing interest rates in the coming months after the central bank unanimously kept rates unchanged given the surge in energy prices. The U.K. is particularly vulnerable to the surge in global oil prices "given the liberalisation of U.K. energy markets, the push away from domestic oil production and a limited storage capacity", Ebury's Matthew Ryan says in a note. Markets fully price in the possibility of two 25 basis-point rate rises in 2026, up from a 50% chance of one rate increase priced in on Wednesday, LSEG data show. (miriam.mukuru@wsj.com)
0902 ET - The evolution of the Middle East war is likely to have a big influence on the Bank of England's interest-rate decisions in the coming months, Moneyfarm's Richard Flax says in a note. The BOE on Thursday voted to keep rates on hold at 3.75% in a unanimous decision. Rising tensions in the Middle East are driving up energy costs, raising the risk of high global inflation. "If the current pressures persist, expectations for rate cuts will continue to be pushed back," Flax says. Markets price in a 55% chance of a BOE rate rise in April, LSEG data show. (miriam.mukuru@wsj.com)
0854 ET - Switzerland's central bank might consider allowing the Swiss franc to appreciate further in the near-term, as this would help to cool price pressures amid rising energy prices, Pantheon Macroeconomics economist Ankita Amajuri says. The Swiss National Bank held its key rate at 0% for a third consecutive quarterly meeting on Thursday, and reiterated its message earlier this month that it's willing to intervene in foreign-exchange markets to limit a rapid appreciation of the franc. "As such, we expect the Bank to leave rates unchanged throughout 2026," Amajuri says in a note. The next SNB move is most likely a rate hike in early 2027, when inflation comes closer to the middle of its 0%-2% target band, she says. (edward.frankl@wsj.com)
(END) Dow Jones Newswires
March 19, 2026 10:03 ET (14:03 GMT)
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