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

1109 GMT - The British economy returned to growth in May, but renewed energy-price pressures cloud the outlook, Yael Selfin, chief economist at KPMG U.K., says in a note. U.K. GDP rose 0.1% in May, driven by recovery in the services sector. May's warmer weather provided a welcome boost to businesses, with stronger consumer spending helping to drive growth in consumer-facing services, Selfin says. That momentum likely carried forward, supported by World Cup-related spending. However, that might not be enough to offset weakness across other parts of the economy. "The recent rise in energy prices, driven by a pick-up in tensions in the Middle East, could pose a risk to the growth outlook, with financial conditions also tightening as a result," she notes. (edward.frankl@wsj.com)

1058 GMT - Pimco continues to expect inflation to moderate over the second half of the year and the Federal Reserve to remain on hold, Tiffany Wilding says in a note. "However, recent communications suggest policymakers are increasingly preparing markets for the possibility of renewed tightening should inflation fail to ease as expected," the Pimco economist says. Additional tightening reinforces the Fed's inflation-fighting credibility and helps anchor long-run inflation expectations, she says. A credible policy response may ultimately reduce the inflation risk premium embedded in longer-dated bonds, limiting upward pressure on long-end yields even as the Fed tightens policy, she says. (emese.bartha@wsj.com)

1032 GMT - The U.S.-Iran conflict prevents sustained dollar losses after recent lower-than-expected U.S. inflation data, Commerzbank's Thu Lan Nguyen says in a note. Inflationary risks remain as the conflict lifts oil prices, she says. Expectations for the Federal Reserve to raise interest rates should therefore persist for some time, she says. The re-escalation in the Iran war has had a limited impact so far but the longer energy prices stay elevated, the more likely second-round inflation effects become. "As long as the market sees this risk and therefore continues to price in U.S. rate hikes, dollar weakness is likely to remain contained." The DXY dollar index rises 0.1% to 100.537 after reaching a four-week low of 100.353 Wednesday. (renae.dyer@wsj.com)

1030 GMT - Shrinking oil inventories have left global markets vulnerable, says Canada's export credit agency. Export Development Canada forecasts oil prices will average around $96 a barrel this year and nearly $84 a barrel in 2027, reflecting ongoing uncertainty and efforts to rebuild depleted stocks as a buffer against future flareups. Stuart Bergman, EDC's chief economist, says storage tanks scattered around the world have become the oil market's "marginal producer."Inventories accumulated before the crisis and emergency stockpile releases have helped offset reduced activity, but at the cost of inventories falling below seasonal norms, Bergman notes. He says a permanent agreement to end the war and restoring ship traffic in the Strait of Hormuz to pre-crisis levels would ease constraints, but oil markets remain tight and vulnerable to further disruptions and price volatility if geopolitical risks escalate. (robb.stewart@wsj.com; @RobbMStewart)

1030 GMT - Canada's nearterm growth outlook remains subdued, slowing amid persistent trade uncertainty and weaker population growth, the country's export credit agency says. Export Development Canada's summer outlook projects the economy will expand by 1% in 2026 before strengthening to 2.1% in 2027. Real GDP per capita has been showing improvement largely thanks to the population adjustment, but weak expectations for wage growth suggest household demand will remain fragile over the year ahead, EDC reckons. It adds business investment in machinery and equipment continues to slip due to global uncertainty, which is weighing on productivity and near-term growth. exports are holding up but growth is narrow, supported by energy and gold and masking weakness elsewhere. (robb.stewart@wsj.com; @RobbMStewart)

1024 GMT - Investors are betting on the Bank of England increasing interest rates in November as the U.K. economy shows resilience. The U.K. monthly GDP rose by 0.1% in May, up from a 0.1% contraction in April."The U.K. economy weathered the rise in energy prices and mortgage rates caused by the Iran war better than we had feared," Berenberg's Andrew Wishart says in a note. The Middle East conflict and inflation concerns are also driving expectations of the BOE raising interest rates. Markets price in a total of 38 basis points of BOE interest rate rises in 2026, with the first quarter-point increase fully priced in for November, LSEG data show. (miriam.mukuru@wsj.com)

0921 GMT - U.S. Treasury yields and the dollar edge higher, reversing some of their previous falls. Yields and the dollar fell Wednesday after June U.S. producer price data echoed Tuesday's below-forecast CPI figures. "Together the two reports pulled yields and the dollar lower as inflation concerns abated to some extent," DHF Capital S.A's Bas Kooijman says in a note. Markets will monitor incoming data for confirmation of a sustained trend of slowing inflation. However, ongoing Middle East tensions threaten to push oil prices higher again, he says. The two-year Tresury yield rises 2.8 basis points to 4.155%, while the 10-year yield rises 2.4 basis points to 4.568%, according to Tradeweb. The DXY dollar index rises 0.1% to 100.537. (emese.bartha@wsj.com)

0918 GMT - Sterling's appreciation against the euro looks somewhat stretched, Societe Generale analysts say in a note. Media reports that U.K. Home Secretary Shabana Mahmood could become treasury chief could explain some of sterling's gains linked to investors closing earlier bets against the currency, they say. However, the scale of the move is hard to justify relative to government bond yield spreads, they say. The euro rises 0.2% to 0.8478 pounds after reaching a 13-month low of 0.8453 Wednesday, LSEG data show. Technically, the next projections are located at 0.8435 while 0.8545 may provide resistance on any rebound, the analysts say.(renae.dyer@wsj.com)

0836 GMT - The euro has limited scope to extend recent gains against the dollar unless there are clear signs of a de-escalation in the Middle East conflict, ING's Francesco Pesole says in a note. The rise in gas prices, which has a bigger impact on the eurozone's terms of trade than crude prices, should prevent the euro from building any idiosyncratic strength, he says. "We expect euro-dollar sellers to emerge around the $1.1500 area, and see a greater chance of range-bound stabilization at this stage rather than a break higher. " The euro trades flat at $1.1463 after reaching a four-week high of $1.1482 Thursday, LSEG data show.(renae.dyer@wsj.com)

0755 GMT - Sterling's recent appreciation appears driven more by positioning adjustments than a major assessment of the U.K.'s prospects, ING's Chris Turner says in a note. Positioning data recently showed speculators running the shortest sterling positions, or bets on a weaker currency, since 2017, he says. There is scope for the euro to reach 0.8400 pounds in the near term after hitting a 13-month low of 0.8453 Wednesday, he says. However, the euro could rise to 0.8600-0.8610 pounds later this month if positioning activity fades and investors return their focus to the soft economic picture and the prospect of the Bank of England avoiding interest-rate rises, he says. The euro last trades up 0.1% at 0.8474 pounds. (renae.dyer@wsj.com)

0739 GMT - Bitcoin eases slightly after reaching a three-week high Wednesday on the reduced prospect of the Federal Reserve raising interest rates after softer inflation data. The U.S. producer price index unexpectedly fell 0.3% in June, data showed Wednesday. It followed Tuesday's lower-than-forecast consumer prices data. While the data dampen rate rise bets, the flaring of U.S.-Iran tensions keep investors cautious over risky assets. Bitcoin falls 0.4% to $64,667 after reaching as high as $65,524 Wednesday, LSEG data show. "The $65,000-$66,000 area remains an important resistance zone, meaning bitcoin still needs sustained spot demand and stronger institutional inflows to convert the breakout into a durable upward trend rather than a short-lived positioning move," Zaye Capital Markets analyst Naeem Aslam says in a note. (renae.dyer@wsj.com)

0724 GMT - Yields on U.K. government bonds climb after GDP data showed the economy grew in May. The U.K. economy expanded by 0.1% in May, up from a 0.1% contraction in April, showing signs of resilience which potentially raises the possibility of the Bank of England increasing interest rates in the coming months. "Despite fears that momentum in the U.K. economy had faded, it has surprised with growth of 0.1% in May," Quilter's Lindsay James says in a note. Markets fully price in one-quarter point BOE interest rate increase in November, LSEG data show. Ten-year gilt yields rise 1.5 basis points to last trade at 4.966%, Tradeweb data show. (miriam.mukuru@wsj.com)

(END) Dow Jones Newswires

July 16, 2026 07:10 ET (11:10 GMT)

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