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

1210 ET - A spike in world oil prices to around $140 a barrel over a two‑month period, along with a large rise in natural gas prices and other spillover effects, could be enough to tip parts of the world economy into a mild recession, Ben May and Ryan Sweet of Oxford Economics say in a report. A simulation of such an event showed global GDP down 0.7% at the end of 2026, with mild contractions in the Eurozone, the UK and Japan "while the U.S. nears a temporary standstill." The strength of the subsequent recovery would be determined by how quickly shipping through the Strait of Hormuz rebounds and how fast oil prices, supply-chain stresses, and financial market conditions ease, they say. A less severescenario with $100 oil for two months "would shave a few 10ths of a percentage point off global GDP growth via higher inflation, but recessions would be avoided," they add. (anthony.harrup@wsj.com)

1205 ET - If energy prices rise further, it could cause the Bank of England to signal possible interest-rate rises in coming months during the March 19 policy meeting, Capital Economics' Paul Dales says in a webinar. The BOE is expected to delay cutting interest rates in the coming months due to an increased risk of inflation given the sharp rise in energy prices caused by the Middle East war, Dales says. A BOE interest-rate increase is less likely in the near term as such a move would slow business activity and worsen the economic outlook, he says. Markets currently price a 63% probability of a BOE rate rise by the end of 2026, LSEG data show. (miriam.mukuru@wsj.com)

1058 ET - Bitcoin prices have managed to stay relatively stable as the Iran conflict rages on, even with the surge in crude oil prices applying pressure to other higher-risk assets. Bitcoin has managed to trade fairly tightly around the $70,000-mark, after prices briefly dipped on the initial news of a strike. Maintaining this price level is unusual for bitcoin, says Nic Puckrin of Coin Bureau in a note. "In 2022, when the war in Ukraine began, bitcoin eventually plummeted as oil reached $120 (a barrel), albeit it took a while for this to happen," says Puckrin. "In 2020, during the Covid pandemic, bitcoin's price fell some 40%, along with other risk assets." In both cases, bitcoin later rallied to new all-time highs. (kirk.maltais@wsj.com)

1058 ET - The dollar could rise further even if Middle East tensions ease, Societe Generale's Kit Juckes says in a note. The conflict has boosted the dollar due to its safe-haven role and its position as an energy exporter as oil prices rise. Additionally, U.S. growth expectations for this year have been revised up to 2.5%. This contrasts with forecasts of eurozone growth of 1.2% and Japan growth of 0.8%. That means the dollar should strengthen in coming months even if it suffers a short-term bout of declines on any deceleration in the conflict, Juckes says. "If tensions don't ease and energy prices stay high for longer, the dollar will be even stronger." The DXY dollar index rises 0.4% to 99.634.(renae.dyer@wsj.com)

1052 ET - Yields on U.K. government bonds, or gilts, climb further due to worries about inflation as energy prices soar. The U.K. is seen as particularly sensitive to an energy-price shock, causing markets to price in elevated levels of inflation, AJ Bell's Danni Hewson says in a note. Money markets price in a 50% chance of the Bank of England raising interest rates by 25 basis points in 2026, LSEG data show. This marks a significant shift from the expected BOE rate cuts which were priced in prior to the Middle East War. Ten-year gilt yields climb 7.1 basis points to last trade at 4.771%, Tradeweb data show. (miriam.mukuru@wsj.com)

1036 ET - European investors are moving their investments away from credit risk exposure into safer positions due to concerns about inflation, Bank of America credit strategists say in a note. Concerns about a resurgence in inflation due to high energy prices have led to increased volatility in the sovereign bonds market and these developments are likely to lead to investment outflows from European credit funds, the strategists say. "We expect this [outflow] to be moderate as market participants have derisked markedly." (miriam.mukuru@wsj.com)

1021 ET - Sterling rises to a five-week high against the euro as markets price in the prospect of the Bank of England pivoting towards interest-rate rises. Higher energy prices resulting from the Iran war are expected to add to the U.K.'s already elevated inflation. Markets are now pricing in a small chance of a rate rise this year with a move nearly fully priced by end of 2027, LSEG data show. Before the war, markets expected two rate cuts this year. However, this repricing can only provide so much support to sterling, Societe Generale's Kit Juckes says in a note. "U.K. households are among the most vulnerable to rising energy prices." The euro falls to a low of 0.8616 pounds. (renae.dyer@wsj.com)

0944 ET - Canada's trade figures for January were soft against a backdrop of elevated uncertainty, despite some temporary factors such as weather and automotive production disruptions, Bank of Montreal Capital Markets' Shelly Kaushik says. The economist says that while higher energy prices will help Canadian exports in the coming months, other trade flows will remain under pressure until a deal with the U.S. is reached. The volume of exports in January fell 6.1% on-month, while imports were down a lesser 2.4%.(robb.stewart@wsj.com; @RobbMStewart)

0936 ET - The Australian dollar trades near an 35-year high against the Japanese yen as oil prices remain elevated due to the Iran war, Rabobank's Jane Foley says in a note. Australia is a net energy exporter and the country's central bank is expected to raise interest rates further. Japan is an energy importer. However, the high volatility, risk-averse environment could curb demand for carry trades, discouraging investors from borrowing in the low-yielding yen to buy the higher-yielding Australian dollar, Foley says. "Japan still has a healthy current account surplus, and this suggest scope for sharp pullbacks in times of elevated market uncertainty." The Australian dollar falls 0.1% to 113.29 yen but stays near the overnight high of 113.68 yen. (renae.dyer@wsj.com)

0912 ET - A dive in Canadian exports in January alongside a large fall in wholesale sales volumes suggests downside risk to the flash estimate GDP was flat to start the year, Capital Economics' Stephen Brown says. If that is the case, the economist reckons there will be less pressure on the Bank of Canada to respond to the jump in oil prices by considering interest rate increases any time soon. Exports fell 4.7% on-month, outpacing a 1.1% drop in imports to widen the goods-trade deficit to C$3.6 billion. Wholesale trade volumes fell 1.5% on-month. (robb.stewart@wsj.com; @RobbMStewart)

0854 ET - Treasury yields rise as U.S. labor market stays resilient amid the global turmoil. Weekly jobless claims decline to 213,000 from a revised 214,000, versus WSJ consensus of 215,000, indicating layoffs remain contained. U.S. January trade deficit is narrower than expected, at $54.46 billion. Housing starts also surprise on the upside. Oil prices rise as energy production and flow remain under threat. U.S. Energy Secretary Wright says on CNBC the Navy isn't ready to escort tankers through the Strait of Hormuz just yet. The 10-year rises to 4.228% from 4.207% yesterday. The two-year is at 3.651%, up from 3.634%. (paulo.trevisani@wsj.com; @ptrevisani)

0809 ET - Bitcoin trims its losses to trade back above $70,000 as oil prices pull back from their highs that were driven by the widening Middle East conflict. Brent crude earlier rose back above $100 per barrel before dropping back to last trade at $97.93. The rise followed news that two foreign fuel tankers were attacked in Iraqi waters Wednesday. Oil prices remain the driver of macroeconomic sentiment, Marex crypto analyst Louis De Backer says in a note. When crude spikes the market immediately reprices inflation risks and cryptocurrencies are treated as risk-sensitive assets, he says. Bitcoin falls 0.2% to $70,485, LSEG data show. (renae.dyer@wsj.com)

(END) Dow Jones Newswires

March 12, 2026 12:10 ET (16:10 GMT)

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