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

0938 ET - Canada's economy looks to have found its momentum again. Advance data indicates industry-level GDP expanded 0.2% on-month in August after activity was flat in July, in line with Statistics Canada's earlier flash estimate and a tick below the 0.1% growth economists expected on average. The early look at August shows a recovery in mining and retail trade, offset by further weakness in oil and gas extraction. Unchanged GDP in July snapped three consecutive months of growth for Canada. Even with the recovery in August, it points to softer growth in the current quarter after a strong 3.3% annualized expansion in 2Q. (robb.stewart@wsj.com; @RobbMStewart)

0936 ET - Yields on U.K. government bonds fall as Prime Minister Andy Burnham delivers a speech at the Labour Party conference in Liverpool. Burnham promised to put Britain on a new economic path. He also said the government would embark on a massive council house building program in an effort to ensure "everyone has a roof over their head". Ten-year gilt yields are down 6.6 basis points to last trade at 5.364%, outperforming eurozone peers, Tradeweb data show. (miriam.mukuru@wsj.com)

0913 ET - The Treasury selloff eases, keeping yields just below multiyear highs, as oil prices slip and Wall Street braces for a streak of relevant data. The Conference Board Consumer Confidence Index is expected to edge lower, according to a WSJ consensus forecast. Job openings in the JOLTS report are likely to slip to 7.2 million from 7.3 million. Both are due at 10 a.m. ET. September ADP employment report and August PCE inflation are due tomorrow, along with final 2Q GDP estimate. The 10-year yield slips to 5.226% from yesterday's settlement of 5.241%, which was the highest since June 2007. The two-year stays around its 28-month high of 4.922%. (paulo.trevisani@wsj.com; @ptrevisani)

0841 ET - A temporary policy aimed at reducing U.K. household energy costs could lower inflationary pressures and could be viewed positively by markets, Deutsche Bank economists Sanjay Raja and Maui Brennan say in a note. Such a move could reduce the need for higher interest rates by the Bank of England, the economists say. Markets price in a 79% chance of a BOE rate increase in November, and fully price in four rate hikes by July 2027, LSEG data show. (miriam.mukuru@wsj.com)

0839 ET - The U.K. government's announcement of a scheme to support first-time home buyers is likely to boost the housing sector, RBC Capital Markets' Anthony Codling says in a note. The Bank of England money and credit report released on Tuesday showed mortgage approvals decelerated to 54,918 in August, below the consensus forecast of 56,100 by economists in a WSJ poll. The data show that demand stimulus is needed and the government is planning to fix that, Codling says. Detail's on the first-time house buyer scheme will be announced at the budget on October 28. (miriam.mukuru@wsj.com)

0834 ET - Artificial intelligence looks to be driving a mild productivity upturn in Europe, Oxford Economics' Leo Barincou says. "AI's productivity impact on Europe's economy is real, growing, and increasingly visible at the macroeconomic level, though it remains modest," he says in a note. Data suggests an upper-bound productivity boost of 0.1% a year since 2023, around a fifth of the overall 0.5% annual gain, he says. ICT productivity in the six most AI-ready EU countries outperform that in the six least ready by roughly 30% since early 2023, Barincou says. "We expect stronger productivity growth to continue, with subdued hiring as firms draw on hoarded labor and benefit from wider AI adoption and related labour savings," he says. (edward.frankl@wsj.com)

0830 ET - U.K. lending to consumers and businesses stayed resilient in August, indicating strong consumption and business investment, Pantheon Macroeconomics economists Rob Wood and Elliott Jordan-Doak say in a note. Net lending to private companies and households increased to 3.9 billion pounds in August, from a 0.1 billion pounds decline in July. Given the lending data, Pantheon Macroeconomics expect the U.K. economy to expand by 0.4% quarter-on-quarter in the third quarter of 2026. (miriam.mukuru@wsj.com)

0744 ET - It's another heavy Fedspeak day with Fed governors Michael Barr, Christopher Waller and Michelle Bowman, as well as New York Fed President John Williams all slated to offer their views on the economy. Deutsche Bank's economics team says it will monitor their speeches for any changes in tone regarding financial conditions in the wake of the sharp rise in bond yields, but all-in-all Fed officials seem to be "singing from he same hawkish hymnal." The economists expect two additional 25 bps hikes in December and March, though "a further tightening of the labor market, stubborn underlying inflation, or evidence that AI-related capital expenditure is broadening demand could bring an October hike into play." (patrick.sheridan@wsj.com)

0646 ET - Target will lower prices on nearly 2,000 items across home, apparel and accessories. The price cuts come after the retailer said in August that it had lowered prices on more than 10,000 items over the past 12 months and was planning to roll out additional price reductions over the remainder of the year. In home, price reductions extend to comforters and sheets, with prices across the bedding category 15% lower on average from last year. In apparel and accessories, Target lowers costs for items including long-sleeve tees and shoes, such as kids' rain and winter boots. "We're making it even easier for busy families to create moments of joy this fall," chief merchandising officer Cara Sylvester says. (connor.hart@wsj.com)

0623 ET - The dollar rises to a two-month high against a basket of currencies, extending recent gains on expectations for further U.S. interest-rate increases as soon as next month. The market currently prices a 73% chance that the Federal Reserve will raise rates by another 25 basis points in October, according to LSEG. The Fed raised rates by 25bps earlier this month and signalled further tightening. Since the decision, several Fed policymakers have pointed to the prospect of further rate rises to stem inflation as energy prices stay elevated amid the ongoing Middle East conflict. The DXY dollar index rises to as high as 101.487. (renae.dyer@wsj.com)

0600 ET - U.K. Treasury Chief John Healey on Monday reiterated the government's promise to maintain fiscal discipline, which has contributed to a modest decline in gilt yields, Mizuho's Evelyne Gomez-Liechti says in a note. "A government still keen to avoid fiscal credibility concerns remains supportive [for gilts]," she says. Speaking at the Labour Party conference, Healey said: "The Prime Minister and I are in lockstep that we will meet the fiscal rules. That we will maintain control of Britain's finances." Ten-year gilt yields fall 4.0 basis points to last trade at 5.392%, Tradeweb data show. (miriam.mukuru@wsj.com)

0536 ET - The euro falls to a three-month low against the dollar as markets price in a higher probability that the Federal Reserve will raise interest rates further in October compared to the European Central Bank. Markets price a 72% chance of the Fed raising rates 25 basis points next month compared to 46% for the ECB, LSEG data show. ECB President Christine Lagarde on Monday said the ECB should adopt a measured response given no evidence of second-round inflationary effects stemming from higher energy costs. "Her remarks confirm our suspicion that if one central bank hikes in October, it will be the Fed, and not the ECB, ING's Francesco Pesole says in a note. The euro falls to as low as $1.1333.