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

0852 GMT - China's latest stimulus package could be the beginning of a new round of policy support, says OCBC Group Research in a note. The latest package was concentrated on housing demand, infrastructure financing and credit support, OCBC analysts say.Growth stabilization appears to be moving higher on the policy agenda after disappointing data in July and August, says OCBC. The analysts expect policy support to remain incremental and data-dependent, with further measures calibrated against incoming economic data. OCBC maintains its China full-year economic growth forecast at 4.6%. The bank sees a reserve requirement ratio cut as more likely than a broad-based policy rate cut, noting that Chinese policymakers seem inclined to combine liquidity support with targeted structural instruments rather than rely on conventional rate easing. (megan.cheah@wsj.com)

0827 GMT - Food prices will likely remain the main source of upward inflation pressure for Indonesia through 4Q, as drier El Nino-linked conditions are expected to weigh on agricultural output, RHB's Wong Xian Yong writes. That prompts the economist to raise his 2026 Indonesia inflation forecast to 3.2% from 2.8%. He also expects food-price pressures to persist into early 2027. Government measures and ample rice stocks should limit broader price increases but may be less effective in offsetting shortages in weather-sensitive crops like chili, the economist says. Higher oil prices and a weaker rupiah could intensify inflation pressures, he adds. RHB expects Bank Indonesia to hold its policy rate at 5.75% in October, though persistent rupiah weakness remains a key risk. (yingxian.wong@wsj.com)

0825 GMT - Sterling's rise to a two-month high against the euro possibly reflects some independent euro weakness along with the prospect of improved U.K.-EU ties under U.K. Prime Minister Andy Burnham, ING's Chris Turner says in a note. The euro versus sterling is the usual hedge for eurozone political and fiscal concerns, he says. The widening spread between German and French government bond yields is quite alarming and potentially adding some risk premium to the euro and constraining the European Central Bank's tightening cycle, he says. Meanwhile, Burnham has suggested rejoining the EU as among the options to rebuild ties with the bloc, which would be positive for sterling, he says. The euro falls to as low as 0.8529 pounds.(renae.dyer@wsj.com)

0823 GMT - Silver prices rise in early European trading, but remain caught between supportive fundamentals and challenging macroeconomic conditions. Lower expectations for further U.S. interest rate hikes are providing some relief, while improving Chinese manufacturing data point to stronger industrial demand from electronics, solar and manufacturing, says Naeem Aslam from Zaye Capital Markets. However, elevated U.S. Treasury yields and a firm dollar continue to weigh on precious metals. Meanwhile, the physical market remains tight, with a sixth consecutive annual supply deficit expected this year, but solar manufacturers are reducing usage as high prices encourage greater efficiency, according to Aslam. Silver futures are up 0.5% at $60.90 a troy ounce. (giulia.petroni@wsj.com)

0759 GMT - Research and development for world models can be "very positive" for artificial-intelligence compute and memory demand, Jefferies analysts say in a research note. While the research remains at an early stage, the models' ability to predict how the physical world might change in response to an action is critical to further potential of the robotics and autonomous-driving industries, they say. There are different routes to developing world models, some of which are compute- and memory-intensive, the analysts note. That supports a positive read-through for data centers and high-bandwidth memory suppliers over the long term. (tracy.qu@wsj.com)

0745 GMT - Gold ticks higher as investors weigh lower expectations for another Federal Reserve interest-rate increase this month. Traders are pricing in a 39% chance of an October hike after the latest PCE inflation data came in softer than expected, according to the CME's FedWatch tool. "Softer inflation provides some support for gold, but elevated yields and lingering tightening risks remain key headwinds, with Friday's U.S. payrolls report the next major catalyst for the Fed outlook," says MUFG's Soojin Kim. In early European trading, New York gold futures are up 0.2% at $4,186.30 a troy ounce. U.S. Treasury yields fell in Asian trade on Thursday after stretching to fresh 24-year highs earlier. Meanwhile, the U.S. dollar index is up 0.3% at 101.72, making dollar-denominated commodities more expensive for overseas buyers. (giulia.petroni@wsj.com)

0738 GMT - The euro falls to a 16-month low against the dollar, extending its recent slide as U.S. interest-rate rise expectations remain elevated. "Yesterday's softer-than-expected August U.S. PCE inflation data barely put a dent in Federal Reserve tightening expectations, perhaps because U.S. activity data continues to come in on the encouraging side," ING's Chris Turner says in a note. Consumer spending data are holding up and there were signs payroll growth is accelerating again in Wednesday's ADP private payrolls report, he says. The euro falls to as low as $1.1287, LSEG data show. (renae.dyer@wsj.com)

0732 GMT - U.K. government bond yields climb to multiyear highs while sterling also rises due to increased expectations of the Bank of England increasing interest rates in the coming months. Climbing oil prices are driving inflation concerns, causing investors to price in four BOE rate increases by July 2027, LSEG data show. Ten-year gilt yields hit 5.509%, the highest since 2007, LSEG data show. The euro falls to a 7-week low of 0.8529 pounds, LSEG data show. (miriam.mukuru@wsj.com)

0726 GMT - Markets are operating in a tug of war between micro tech earnings momentum and macro bond yield drag, Tickmill Group's Patrick Munnelly says in a note. Asian equity markets, led by Japan and South Korea, rallied Thursday after Micron's upbeat revenue guidance. However, Asian government bonds rose after the 10-year Treasury yield briefly topped 5.3% overnight, hitting its highest level since 2002. While visible megacap tech growth is providing an earnings floor, a restrictive rates environment continues to cap broader market expansion, he says. Investors' next focus will be Friday's U.S. nonfarm payrolls report--"a cooling labor print could validate today's tech-led relief bounce, whereas sticky wage growth risks putting bond vigilantes firmly back in charge," he adds. (sherry.qin@wsj.com)

0722 GMT - The 10-year French OAT-German Bund yield spread rises to 130 basis points, its widest level since 2012 as markets remain wary ahead of the presentation of next year's budget in France. Eurozone bond yields rise as U.S. Treasury yields turn higher again after swinging between fresh highs and falls. The eurozone bond market faces significant supply from Spain and France. Spain will auction 4.75 billion euros to 6.25 billion euros in nominal and inflation-linked bonds with maturities across the curve, while France will offer 10 billion euros to 12 billion euros in long-dated OATs. "Bonds remain choppy and OAT spread dynamics are concerning," says Commerzbank's Erik Liem. The 10-year Bund yield rises 4.3 basis points to 3.623%, according to Tradeweb. (emese.bartha@wsj.com)

0709 GMT - The Bank of Japan's summary of opinions from its September meeting didn't reveal comments hawkish enough to support the option of a back-to-back interest-rate hike, as some investors expect, says SMBC Nikko Securities economist Yoshimasa Maruyama. "Regarding financial conditions--a key factor in determining rate hikes--there were opinions emphasizing corporate behavior and asset prices, suggesting the central bank could decide on additional rate increases without relying heavily on benchmark interest-rate levels," he says. The Overnight Index Swaps market is currently pricing in a 20% chance of a rate hike in October and an 82% probability in December.(megumi.fujikawa@wsj.com)

0646 GMT - The Bank of Japan's summary of opinions released earlier Thursday shows that government representatives showed little concern over the risk of higher inflation at the bank's September meeting, says Daiwa Securities economist Kento Minami. "Instead, the focus appears to be on the cumulative impact of past rate hikes, as well as economic and market stability. This suggests that the government prioritizes the broader impact of interest-rate hikes on the economy and financial conditions over addressing upside inflation risks," he says. "While the government accepted the September rate hike itself, that does not mean it has condoned an acceleration in the pace of future rate increases," he adds.