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

0927 ET - The Bank of Canada next week is likely to acknowledge the strength in the economy prior to the rise in economic tensions between the U.S. and Canada -- but that will mean little given fresh layer of uncertainty now hovering over the country's businesses, says Karl Schamotta, chief market strategist at global-payments firm Corpay. Canada GDP rose 3.3% annualized in 2Q, or well above the BOC's 2.5% forecast. In the past week, though, the U.S. has imposed a 50% tariff on certain Canadian imports, and Canada has responded with retaliatory tariffs of their own. Schamotta says the Canadian dollar is trading flat following the 2Q performance, and the currency remains vulnerable "to a dovish repricing of the BOC's policy trajectory." BOC issues its next decision this coming Wednesday. (paul.vieira@wsj.com; @paulvieira)

0919 ET - Canada had impressive economic growth in 2Q, but that will be yesterday's news as far as the Bank of Canada is concerned, says Andrew Grantham, economist at CIBC Capital Markets. The sharp escalation in trade tensions between the U.S. and Canada hangs over the economic outlook, and Grantham adds the monthly GDP data suggest activity slowed in July. The 3.3% annualized gain in GDP suggests a slightly narrower output gap, or the measure of slack in the economy. Still, the Statistics Canada estimate of flat growth in July has GDP tracking toward a slower 1.5% rise in 3Q, and Grantham says CIBC does not expect the BOC "to move off the sidelines anytime soon." (paul.vieira@wsj.com; @paulvieira)

0918 ET - Statistics Canada's GDP report for 2Q shows an economy booming just before an escalation of trade tensions. Overall, 2Q GDP grew 3.3% annualized, below market expectations but well ahead of the Bank of Canada's previous estimate. The data agency notes GDP growth would have been higher were it not for a sizable drag on inventories. The change in inventories stripped off 1.3-percentage-points from 2Q growth. Policymakers will likely be encouraged to see business investment rise in 2Q, or the first increase in five quarters. And final domestic demand -- which incorporates buying by households, business and government, excluding net exports and inventories -- jumped 3.9%, or the biggest increase in at least a year. (paul.vieira@wsj.com; @paulvieira)

0906 ET - The Canadian dollar is the biggest loser among G-10 currencies this week, hit by the trade war dispute between the U.S. and Canada, Bannockburn Capital Markets' Marc Chandler says in a note. Down about 0.65%, it is "the heaviest [loser] of the G-10 currencies this week," he says. The Australian dollar stands out as the strongest gainer, having risen about 0.40%, encouraged by the swing in sentiment toward another interest-rate hike this year, Chandler says. (emese.bartha@wsj.com)

0905 ET - Canada's technical recession evaporated with data revisions. The economy expanded a solid 3.3% at annual rates in the second quarter. That was slightly softer than the nearly 3.5% expansion economists expected, but comes after gross domestic product for the first quarter was revised upward. Now Statistics Canada calculates the economy grew 0.3% annualized in 1Q, rather than theslight 0.1% contraction it previously estimated following a 1% drop in GDP in the last quarter of 2025. Back-to-back quarterly contractions can define a technical recession. (robb.stewart@wsj.com; @RobbMStewart)

0856 ET - Canadian economist David Rosenberg reckons that President Trump's decision to escalate trade tensions between Ottawa and Washington by issuing an executive order to rename Lake Ontario as Lake America could add further weakness to the U.S. dollar. "This childish behavior out of the White House is yet another reason to adopt a dire view of the U.S. dollar," says Rosenberg, head of market-strategy firm Rosenberg Research. "Even reserve currencies require global investor confidence. And it is being lost," says Rosenberg, citing the trade conflict with Canada and the war in Iran. (paul.vieira@wsj.com; @paulvieira)

0823 ET - Yields on U.K. government bonds, or gilts, climb further as markets wait for Federal Reserve Chairman Kevin Warsh's speech at the Jackson Hole symposium at 1400 GMT. "We think it is unlikely we will hear much about interest rates from the Fed Chair, given his stated desire to eschew forward guidance," RBC BlueBay Asset Management's Mark Dowding says in a note. Ten-year gilt yields climb 3.2 basis points to last trade at 5.059%, Tradeweb data show. (miriam.mukuru@wsj.com)

0749 ET - Investors who expect bond yields to rise are likely to retain the upper hand over the next three-to-six months, even as the U.S. Treasury's decision to increase long-end bond buybacks has tamed these so-called bond bears for now, LBBW's Elmar Voelker says. "We strongly doubt that interventions by the U.S. Treasury Department will permanently prevent a further rise in the term premiums for long-term government bonds," the senior fixed income analyst says in a note. Holding back term premiums lastingly requires a credible shift in U.S. fiscal policy toward consolidation, he says. Only when investors are sufficiently convinced that there is no longer a good reason to fear further monetary tightening measures by major central banks is sentiment likely to shift more sustainably in a bond-friendly direction, he says. (emese.bartha@wsj.com)

0654 ET - High energy prices and food inflation could drive U.K. headline inflation above 4% by early 2027, causing the Bank of England to increase interest rates, RBC BlueBay Asset Management's Mark Dowding says in a note. Energy costs are expected to rise after the U.K. energy regulator Ofgem announced a 4% increase in domestic energy bills from October, Dowding says. A further increase of as much as 9% in energy bills may follow in January, he says. Markets fully price in one quarter-point BOE rate increase in 2026, and a possible second rate rise by April 2027, LSEG data show. (miriam.mukuru@wsj.com)

0638 ET - India's economy likely grew 7.5% on year in the April-June period, slowing from the 7.8% expansion in the previous quarter, according to the median estimate of eight economists polled by The Wall Street Journal. DBS's consolidated consumption gauge for India showed strengthening during the quarter, even as sentiment indicators pointed to a more cautious backdrop, while wealth effects remained muted amid subdued capital market performance. India's economy will likely continue to outperform most regional peers, underpinned by strong domestic fundamentals and continued momentum in both services and manufacturing activity, ING economists say. Exports have also been more resilient than expected during global trade headwinds, they add. GDP data is due Monday. (kimberley.kao@wsj.com)

0628 ET - Korean won rises to the highest level since July 2025 in the wake of Thursday's Bank of Korea interest-rate increase to 3.0%, which followed a quarter-point rate hike in July. "The good news is that rate hikes are not only being driven by above-target inflation, but by broadening and strengthening growth prospects," ING's Chris Turner says in a note. The BOK's median expectation is for another rate increase to 3.25% in six months time. The dollar weakens 0.7% against the won to a low of 1,370.40, LSEG data show. There is a chance the won could strengthen further to 1350 won per dollar, Turner says. However, the currency has significantly appreciated in a short time and "is probably due some consolidation." (miriam.mukuru@wsj.com)

0607 ET - French assets are facing pressure after a new poll showed populist candidates are gaining ground ahead of next year's presidential election, Federated Hermes' Filippo Alloatti writes. An Ifop-Fiducial poll showed far-right Marine Le Pen in first place, followed by leftist Jean-Luc Melenchon. "The current economic programs of the two leading candidates raise concerns about France's fiscal outlook and business confidence," Alloatti says. "It looks set to be a cold winter for French markets." Yields on 10-year French OATs trade close to multiyear highs, up 1.7 basis points at 4.125%. The CAC 40 rises 1%, but doesn't fully recover losses from the last session when banking stocks fell sharply following the new poll.