The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
1159 ET - It doesn't take a very big jump on oil prices to push U.S. inflation further away from the Fed's 2% target, Franklin Templeton's Sonal Desai says. She estimates that if crude prices were to stay at around $85 a barrel for a period of time, it would push headline inflation closer to 4% than to 3%. Desai expects the Fed to stay put this year and doesn't see an interest rate increase as likely. WTI is trading up 4%, to $92 a barrel. Futures markets price high odds of a prolonged Fed hold, with a hike more likely than a cut, according to LSEG. (paulo.trevisani@wsj.com; @ptrevisani)
1136 ET - The war in the Middle East is likely to result in wider credit spreads for European bank bonds, ING's Maureen Schuller says in a note. Uncertainties surrounding the war and its impact on global economies is expected to raise the risk premium on bank bonds, Schuller says. "The subordinated side of the bank bond spectrum remains most vulnerable to further adjustment, in our view." (miriam.mukuru@wsj.com)
1135 ET - The Norwegian krone faces a retracement after solid gains at the start of the year, Barclays analysts say in a note. The currency is lifted by higher energy prices stemming from the Iran war due to Norway's position as a major oil exporter. It's also supported by expectations that the Norges Bank could pivot towards raising interest rates. However, gains from energy supply shocks tend to be limited and short-lived, the analysts say. Expectations for a shift towards rate rises also look overdone, they say. Barclays expects the euro to rise to 11.50 krone by the second quarter. The euro falls 0.8% to 11.2212 krone, having reached a three-year low of 10.9244 last Thursday, LSEG data show. (renae.dyer@wsj.com)
1121 ET - Desjardins Group chief economist Jimmy Jean says the firm is upgrading its Canadian economic outlook, due to an anticipated boost to investment and sales for country's energy sector. Jean says growth in 1Q is set to rebound after a contraction in the previous quarter. The upgrade starts in 2Q, Jean says, with Desjardins expecting annualized growth of 2.5%. Offsetting the boost to income from elevated energy prices will be higher inflation that is expected to squeeze households, he adds. "While the terms of trade are improving overall, gains are partial and not equally distributed," Jean says. He adds the boom in energy comes amid a gloomier outlook from a weak labor market, trade-policy uncertainty and an extended housing slump. (paul.vieira@wsj.com; @paulvieira)
1107 ET - Service providers and manufacturers differed in future sentiment for business output in March, according to a survey from S&P Global. In manufacturing, war-related concerns were countered by reduced worries over the adverse impact of tariffs and hopes of strengthening domestic demand for U.S.-made goods, resulting in growth expectations improving to their highest for 13 months, the survey said. Conversely, service providers signaled their weakest outlook since last October, commonly citing concerns over the impact of high energy prices on the cost of living, as well as higher interest rates, financial market worries and war related disruptions to travel. (jessica.coacci@wsj.com; @jessica_coacci)
1103 ET - Ukraine's sovereign bonds look expensive given the ongoing war with Russia and the Middle East war, Oxford Economics' Evghenia Sleptsova says in a note. "The 2029 bond is trading around 75 cents, while Oxford Economics' fair value estimate is 57 cents," she says. Market pricing is based on the assumption that the war with Russia will end by 2028, underpricing the risk of the war continuing beyond 2028, Sleptsova says. In addition, the Middle East war and higher energy costs are expected to add to Ukraine's debt problems, she says. "Each $10 increase in the oil price would add about $700million to $1billion in higher energy import costs, widening [Ukraine's] current account deficit." (miriam.mukuru@wsj.com)
1100 ET - War related shipping issues were a key cause of longer supplier delivery times in March, according to an S&P Global survey. Supply delays were more widely reported by manufacturers than at any time since October 2022. In addition to shipping-related disruptions due to the war in the Middle East, upward pressure on supplier lead times was also caused by an increase in purchasing by factories, the survey says.(jessica.coacci@wsj.com; jessica_coacci)
1055 ET - The Swiss franc could gradually rise this year as the Swiss National Bank remains reluctant to cap the currency's strength with negative interest rates or much larger foreign-exchange interventions, Barclays analysts say in a note. The SNB's recent statements about increased willingness for currency interventions are prompted by the Iran war boosting demand for the safe-haven franc, rather than a shift in its appetite for such a policy, they say. Furthermore, the Swiss current account has weathered a stronger franc well. "Overall, a largely unchanged reaction by the SNB in an environment of strong safe-asset demand continues to imply persistent franc strength." Barclays expects the euro to fall to 0.89 francs by the fourth quarter from 0.9155 currently. (renae.dyer@wsj.com)
1047 ET - Goeasy's amended financing terms offer only limited relief, according to Graham Ryding of TD Cowen. The analyst says covenant waivers and revised terms on the revolver and securitization facility help the company manage its unusually large 4Q/25 charge-offs, but "funding for LendCare [secured loans] going forward looks compromised given these originations will be excluded now from the revolving credit and securitization facilities." Meanwhile the auto-loan securitization facility has been suspended, forcing receivables back onto Goeasy's balance sheet. Liquidity is at C$983 million, though most isn't accessible until mid-year, while a US$65 million note matures in May. Overall, Ryding says the agreements "provide some short term funding relief, but the outlook for funding LendCare looks compromised." (adriano.marchese@wsj.com)
1040 ET - A shrinking population and labor force in Canada are set to pull the country's unemployment rate lower, countering more dovish arguments a rising jobless rate could hinder the Bank of Canada's policy response to what is emerging as a major positive inflation shock, Scotiabank's Derek Holt says. The economist says the lagging look at population in Statistics Canada's labor force survey will show a downward correction going forward, so that the unemployment rate is likely to push lower to 6% and possibly below. Holt says some doves are talking about the unemployment rate heading to 7%, but reckons that with it already at 6.7% Bank of Canada "Governor Macklem would hit snooze on that forecast" even if it weren't more likely to go down. (robb.stewart@wsj.com; @RobbMStewart)
1037 ET - Brazil's central bank takes a cautious approach to the interest-rate cutting cycle launched last week, according to minutes published today. The BCB cut to 14.75% from 15%, frustrating expectations of faster easing. The minutes indicated "the magnitude of additional cuts and the depth of the cycle will be a function of data and the breadth and duration of war in the Middle East," Goldman Sachs' Alberto Ramos writes. The minutes leave the door open to a larger cut in April, but in Ramos' view "that may require an improvement in the external backdrop and limited impact on current inflation and inflation expectations." (paulo.trevisani@wsj.com; @ptrevisani)
1031 ET - The U.K. faces a "non-negligible risk of a mild recession" due to the effects of the Middle East war, Nuveen's Laura Cooper says in a note. Economic growth is weak and the unemployment rate is at a multi-year high of 5.2% but the risk of inflation due to high energy costs limits the Bank of England from cutting interest rates to support the economy, Cooper says. U.K. public finances are weakening, making it difficult for the government to offer support to households amid rising energy costs. Should high energy costs lead the BOE to raise interest rates, it increases the risk of U.K. sliding into a mild recession, she says. (miriam.mukuru@wsj.com)
(END) Dow Jones Newswires
March 24, 2026 11:59 ET (15:59 GMT)
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