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

0953 GMT - A debate in U.K. parliament over Prime Minister Keir Starmer's appointment of former U.K. ambassador to the U.S. Peter Mandelson could weigh further on sterling, Societe Generale's Kit Juckes says in a note. Lawmakers will on Tuesday debate and vote on whether to refer Starmer for an investigation on claims his misled parliament over the appointment. "Anything which damages the prime minister has the potential to worry gilts [U.K. government bonds] and the pound, even if only temporarily," Juckes says. Short positions that bet on a weaker sterling against the Norwegian krone and dollar look attractive given rising oil prices due to the Iran war, he adds. Sterling falls 0.3% to $1.3496 and drops 0.2% to 12.5353 Norwegian krone. (renae.dyer@wsj.com)

0952 GMT - U.S. Treasury yields and the dollar rise as oil prices increase. Concerns about the lack of progress in diplomatic efforts between the U.S. and Iran have reinforced safe-haven demand, says FXEM's Abdelaziz Albogdady in a note. While negotiations remain ongoing, reports that President Trump is dissatisfied with Iran's latest proposal have dampened expectations for a near-term resolution, keeping markets on edge, the market research and fintech strategy manager says. Ongoing disruptions in the Strait of Hormuz are pushing oil prices higher, sustaining inflation concerns, he says. The 10-year Treasury yield rises 2.2 basis points to 4.357%, according to Tradeweb. The DXY dollar index is up 0.2% at 98.712. (emese.bartha@wsj.com)

0945 GMT - Sterling falls as ongoing tensions between the U.S. and Iran weigh on risk sentiment and lift oil prices. A U.S. official said President Trump is skeptical of Iran's offer to stop attacks on ships in the Strait of Hormuz in return for an end to the war, The Wall Street Journal reports. Sterling remains highly sensitive to global risk sentiment and oil prices given the U.K.'s exposure to energy imports, Monex Europe analysts say in a note. The currency will likely continue to take its cue from Iran war headlines until the Bank of England's policy decision Thursday, they say. Sterling falls 0.2% to $1.3500. The euro rises 0.1% to 0.8664 pounds. (renae.dyer@wsj.com)

0940 GMT - The cost of insuring Bahrain's 5-year government bonds against default rises to a 3-week high as the Middle East conflict continues. Market expectations of a quick resolution to the conflict are fading as U.S. and Iran officials fail to reach an agreement. Bahrain has a relatively high level of debt to GDP compared to its Gulf neighbors, making its CDS costs more expensive. The country is an exception in the Gulf Cooperation Council $(GCC)$ economies, where most sovereigns carry relatively little debt, Oxford Economics' Azad Zangana says in a note. Bahrain's 5-year CDS spreads rise 1 basis point to 250bps, the highest level since April 8, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)

0936 GMT - The cost of default protection for euro-denominated credit rises as the Middle East conflict persists. The U.S. and Iran have so far failed to reach an agreement, resulting in prolonged energy supply disruptions and a deterioration in market sentiment. The iTraxx Europe Crossover index of euro high-yield credit default swaps rises 2 basis points to 291bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)

0934 GMT - The euro could strengthen against the dollar over the medium term if the Federal Reserve cuts interest rates while the European Central Bank raises rates, Commerzbank's Antje Praefcke says in a note. The Senate Banking Committee is expected on Wednesday to advance Kevin Warsh's nomination as Fed Chair to the full Senate. The Fed probably won't be able to resist pressure from President Trump to lower rates over the medium term, potentially delivering a cut by year-end followed by two further cuts in 2027, she says. In contrast, the ECB could raise rates in June and keep rates on hold thereafter, she says. In the short-term, however, the Iran war dominates, she says. The euro falls 0.2% to $1.1702.(renae.dyer@wsj.com)

0911 GMT - A sharp weakening of the yen could prompt the Bank of Japan to act, given that the bank said in a report that it will continue to raise interest rates depending on economic, price and financial conditions. Mitsubishi UFJ Morgan Stanley Securities strategist Naomi Muguruma says that marks a change in the BOJ's "policy reaction function." In the report, the BOJ said that foreign-exchange rates are increasingly likely to affect prices, and that such volatility could affect underlying inflation through changes in inflation expectations. The central bank doesn't target the yen directly, but it could adjust policy if the currency's depreciation accelerates price growth significantly. (megumi.fujikawa@wsj.com)

0846 GMT - The Bank of England could revise up near-term U.K. growth and inflation forecasts, MFS Investment Management's Peter Goves says in a note. U.K.'s April purchasing manager index data showed solid activity in manufacturing and services sector. The BOE is expected to keep rates unchanged at 3.75% at Thursday's policy meeting. (miriam.mukuru@wsj.com)

0843 GMT - Yields on U.K. 10-year government bonds climb to 5% as Prime Minister Keir Starmer could come under investigation on whether due process was followed in the appointment of the former U.S. ambassador Peter Mandelson. U.K. parliamentarians are due to vote on Tuesday on whether the Prime Minister should be investigated. Bond investors are concerned that a possible leadership challenge in the U.K. could lead to looser fiscal rules and higher public debt. Ten-year gilt yields hit a one-month high of 5.022%, Tradeweb data show. (miriam.mukuru@wsj.com)

0841 GMT - The Bank of Japan's 6-3 vote to keep rates unchanged signals a possible shift toward tightening policy, says S&P Global Market Intelligence economist Harumi Taguchi. While the research firm currently forecasts a hike to 1% in July, the BOJ could make a move as early as June if the situation in the Middle East stabilizes, Taguchi says. Still, the Japanese economy faces various downside risks, such as deteriorating terms of trade, which could weigh on corporate profits, a decline in real income amid growing inflation, and tourism hampered by higher fuel costs, the economist says. (megumi.fujikawa@wsj.com)

0839 GMT - Globally, longer-term yields look vulnerable and could move higher, Franklin Templeton CIO Sonal Desai says in a note. Deglobalization is pushing structural inflation higher, while the productivity boom--concentrated in the United States--is lifting the neutral real rate, she says. The Iran war combines both a short-term inflation shock and an incentive to "rethink globalization." Another factor is higher public debt and alarmingly wide budget deficits in advanced economies, Desai says. "Here again, the Iran war is likely to prove an accelerator." It has again highlighted the need for greater defense spending across a wide range of countries and the need to bolster energy security could also fuel additional public investment, she says. (emese.bartha@wsj.com)

0807 GMT - U.S. high-yield corporate bonds have proved resilient, despite escalating volatility from the Mideast conflict, artificial-intelligence-related risks for software businesses and concerns about private credit, says Saira Malik, chief investment officer at Nuveen. High-yield bonds have undergone a structural transformation since the 2007-2009 global financial crisis, with bonds rated BB making up around 57% of the overall high-yield market, she says in commentary. The market has also shifted toward larger, more-established issuers with stronger credit profiles and default rates below long-term historical averages. High yield is also a beneficiary of potential AI growth, as its sector mix is meaningfully overweight AI enablers and beneficiaries such as fiber, power, data centers, tech services and healthcare, she adds. (monica.gupta@wsj.com)

(END) Dow Jones Newswires

April 28, 2026 05:53 ET (09:53 GMT)

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