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

0745 GMT - Sterling rises to a one-month high against the euro after data showed the U.K. economy grew more than previously estimated in the second quarter. The Office for National Statistics revised growth to 0.5% from a previously estimate of 0.4%. "Stronger growth will encourage the Bank of England to tighten policy soon if higher energy prices prove more persistent," MUFG Bank's Lee Hardman says in a note. Meanwhile, U.K. Prime Minister Andy Burnham has suggested he would discuss re-joining the EU among the options for improving relations at the U.K.-EU summit later this year which would benefit sterling, he says. The euro falls to as low as 0.8548 pounds. Sterling rises 0.3% to an intraday high of $1.3278, according to LSEG. (renae.dyer@wsj.com)

0743 GMT - The Bank of Japan's Tankan survey could show a further rise in the corporate inflation outlook, says Mizuho Securities economist Ryosuke Katagi. He attributes this to the continuing Middle East tensions and higher oil prices potentially heightening the BOJ's concern over upside risks of underlying inflation exceeding 2%. In the previous June survey, Japanese companies projected a faster pace of growth in both output and overall prices. This, Katagi says, prompted the BOJ to deliver a sooner-than-usual interest-rate hike at its policy-setting meeting earlier this month. The Tankan survey is due Thursday.(megumi.fujikawa@wsj.com)

0739 GMT - Gold prices rise more than 1% as U.S. Treasury yields retreat from multiyear highs and traders scale back expectations for another Fed rate hike in October. In early European trading, gold futures are up 1.1% to $4,228 a troy ounce. New York Fed President John Williams indicated that the central bank doesn't need to rush to raise rates following September's increase, prompting investors to cut the implied probability of an October hike to 42.6%, from 70% earlier this week, according to the CME FedWatch Tool. Focus now shifts to U.S. PCE inflation data and Friday's payrolls report, which will be key in shaping expectations for the Fed's next move and near-term direction of gold, according to analysts. (giulia.petroni@wsj.com)

0736 GMT - Yields on U.K. government bonds, or gilts, fall, tracking moves in U.S. Treasurys after New York Fed President John Williams on Tuesday said he sees no need to rush to increase interest rates. Focus now turns to U.S. personal consumption expenditure price index data--the Federal Reserve's favored inflation measure--at 1230 GMT. The data will give a further indication on the rate outlook after markets significantly scaled back expectations of Fed rate rises following Williams' comments. U.K. quarterly GDP data was stronger than expected, with second quarter growth at 0.5%, above the consensus forecast by economists in a WSJ poll for 0.4% growth. Ten-year gilt yields fall 5 basis points to 5.347%, Tradeweb data show. (miriam.mukuru@wsj.com)

0724 GMT - Eurozone government bond yields decline in early trade, moving in line with U.S. Treasury yields. New York Fed President John Williams suggested the central bank doesn't need to hurry to raise interest rates again in October, after a 25-basis-point hike in September. This cooled market expectations of an October rate hike to a 45% probability from 70% on Monday, according to LSEG. Wednesday's potential market movers include expected increases in French and German inflation data for September. "These inflation increases are not only driven by rising energy prices, but likely also by services prices, where we expect a rebound after last month's decline," Commerzbank's Hauke Siemssen says. The 10-year Bund yield falls 4 basis points to 3.572%, according to Tradeweb. (emese.bartha@wsj.com)

0714 GMT - Bitcoin falls as continued uncertainty over the Middle East conflict keeps investors cautious over risky assets. President Trump denied reports that the U.S. offered Iran sanctions relief in exchange for Tehran showing concrete steps regarding its nuclear program. Bitcoin drops 0.6% to $83,075, LSEG data show. Upcoming U.S. inflation and employment data will be key for broader risk appetite and bitcoin, Zaye Capital Markets analyst Naeem Aslam says in a note. "If yields fall and exchange-traded fund demand remains positive, bitcoin could find stronger support above $83,000; if inflation stays firm and real yields remain elevated, the market may continue to struggle for momentum despite its improving institutional base," he says. (renae.dyer@wsj.com)

0707 GMT - The Bank of Japan's tankan corporate survey due Thursday morning will likely show an improvement in manufacturers' sentiment despite headwinds such as Middle East uncertainties and a weak yen. The diffusion index measuring the mood among large manufacturers is expected to stand at +25 in the September survey, up from +22 three months ago, according to a poll of economists by data provider Quick. "Following the September policy meeting, BOJ Gov. [Kazuo] Ueda noted a shift in the policy landscape and signaled that the central bank could raise interest rates more rapidly than in the past. The latest tankan results appear set to back that view," says Mizuho Securities economist Ryosuke Katagi. (megumi.fujikawa@wsj.com)

0646 GMT - China's 2026 GDP growth will likely be 4.5%, UOB says, placing it at the lower end of the government's official target range of 4.5% to 5.0%, UOB analysts write in a note. Looking ahead, fiscal support is likely to strengthen, primarily through an accelerated pace of bond issuance to bring forward infrastructure spending, they say. China's recent mortgage subsidies is unlikely to materially alter the country's growth trajectory, given the backdrop of slowing investment activity and softer private consumption since 2Q, coupled with persistently weak sentiment in the property market, UOB analysts write in a note. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

0641 GMT - The dollar eases after reaching a two-month high Tuesday after softer-than-anticipated data and Federal Reserve speeches lowered expectations for U.S. interest-rate rises. Job openings fell by more than expected to 7.08 million in August, according to the Job Openings and Labor Turnover Survey. The Conference Board's consumer confidence index also fell more than anticipated to 81.9 in September from 88.6 in August. New York Fed President John Williams suggested the Fed shouldn't rush to raise rates further. Markets price a 44% chance of the Fed raising rates further in October compared to 73% Tuesday, LSEG data show. The DXY dollar index falls 0.1% to 101.239 after rising as high as 101.612 Tuesday. (renae.dyer@wsj.com)

0602 GMT - A stronger-than-expected U.S. jobs report on Friday "might actually be temporary bad news for markets as it could reinforce the need for another rate hike this year," Russell Investments' BeiChen Lin says in a note. If job creation ends up being in-line with or a touch softer than consensus expectations, it would still show a resilient U.S. economy, but would likely cause the market to dial back some of the aggressive Fed pricing, the senior investment strategist says. It is important for investors to remember that many of the key inflation drivers in 2022 are not present today and this limits how forceful the Fed needs to be with rate hikes, Lin says. (emese.bartha@wsj.com)

0535 GMT - U.S. Treasury yields decline in Asian trade, retreating from Tuesday's highs, as Federal Reserve speakers mitigated interest-rate hike expectations. "Fed speakers painted a somewhat mixed picture," say J.P. Morgan strategists in a note. Presidents Goolsbee and Musalem emphasized the near-term inflationary risks of AI demand, alongside broader potential productivity gains, while Governor Barr reiterated that in his base case, "further adjustments" will be necessary to get inflation back to target. Meanwhile, New York Fed President John Williams stressed that there "is no need for urgency" after the hike at the September meeting. The 10-year Treasury yield is down 2 basis points to 5.233%, while the 30-year yield, which hit a 24-year high of 5.621% on Tuesday, last traded 3bps lower at 5.563%, according to Tradeweb. (emese.bartha@wsj.com)

0514 GMT - The global government bond market is likely to remain under pressure in the short term, as no change expected for either energy prices or economic data, Erste Group analysts say in a note. In their base scenario, however, falling energy prices in 2027 will lead to declining inflation expectations. "This should favor falling yields, particularly for shorter maturities, as markets are likely to price in lower future policy rates," they say. On the long end of the curve, they see only limited downside potential. "Robust economic prospects, a high volume of government bond issuance, and the influence of U.S. yields are likely to keep long-term yields at elevated levels."