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

1105 ET - Today's weaker-than-expected jobs report is bad news for the economy, even if it does lower the odds that the Fed will raise rates this month, eToro's Bret Kenwell says in a note. Lower rates may support markets in the near term, but a meaningful deterioration in hiring and income eventually pressures consumer spending and economic growth, he says. Inflation is still a problem, but a breakdown in the labor market would create an entirely different problem, Kenwell says. "Hoping for a weaker labor market just to secure easier financial conditions is a poor tradeoff," he says. (dean.seal@wsj.com)

1045 ET - An upshot of the September jobs report is that demand for labor is concentrated in industries that make stuff rather than services, LPL Financial's Jeffrey Roach says in a research note. August payrolls were supported by job creation in construction, manufacturing and healthcare, Roach says. The big suppressants of job growth were in the information, financial services and government sectors, he says. That's illustrative of the new economy in the AI era, according to Roach. There's strength in the goods-producing sectors that support the AI boom, and a negative impact to services-producing sectors that are feeling the sting of the technological change, Roach says. (dean.seal@wsj.com)

1033 ET - French government bonds are under pressure from global and domestic factors, driving borrowing costs to multidecade highs, Morgan Stanley strategists say in a note. Domestic pressures include concerns about a potential wider 2026 budget deficit, uncertainty around the approval of the 2027 budget in a deeply divided parliament, and political jitters ahead of the 2027 presidential election. In additions, higher global sovereign bond yields are also contributing to rising French government bond yields, the strategists say. Ten-year French sovereign bond yields last trade at 4.878%, having hit 4.994% earlier in the session, the highest since 2002, LSEG data show. (miriam.mukuru@wsj.com)

1020 ET - Separatist movements in Canada may have only limited support but they can still create uncertainty that weighs on business confidence and distracts from other policy priorities, Morningstar DBRS's Travis Shaw argues. An Oct. 5 provincial election in Quebec may see the sovereigntist Parti Quebecois replace the current Coalition avenir Quebec government, while a nonbinding referendum in Alberta Oct. 19 will gauge support for a future binding vote on separation. Shaw sees a separation vote in either province as remote but says the debate is a source of uncertainty. Independence debates can carry economic costs, while any move toward separation would require complex negotiations and substantial fiscal commitments, Shaw adds. (robb.stewart@wsj.com; @RobbMStewart)

0949 ET - The September jobs report shows the labor market is still very much in low-hire, low-fire mode, Ken Mahoney of Mahoney Asset Management says in a note. Companies aren't adding many people, nor are they laying many workers off, he says. Many firms have already right-sized, and while AI may be taking a little off the edge of new hiring, it hasn't sparked a wave of firings, Mahoney says. The 12-month average gain going into the September report was only about 45,000 jobs monthly, so the September figure fits a slow trend more than a break in the economy, he says. (dean.seal@wsj.com)

0945 ET - The U.S. Federal Reserve is unlikely to increase interest rates in October after weak inflation data and jobs data released this week, ABN Amro's Rogier Quaedvlieg says. Data Friday showed the U.S. added 29,000 nonfarm payrolls in September, below the consensus forecast of 84,000 jobs by economists in a WSJ poll. The personal consumption expenditures price index data for August released this week also came in weaker than expected. The data removes the pressure on the Fed to raise interest rates in October, Quaedvlieg says. Markets expect a 20% chance of a Fed rate hike in October, down from an over 70% possibility priced in at the start of this week, LSEG data show. (miriam.mukuru@wsj.com)

0942 ET - September's weaker-than-expected jobs report has decreased expectations that the Fed will hike in October, but that doesn't mean rate hikes are off the table completely for the rest of the year. This week, Fed Vice Chair Philip Jefferson and New York Fed president John Williams suggested policymakers could take their time before deciding to raise interest rates again. However, on Thursday, Fed's Lorie Logan said policy needs to tighten further. "We think the upside risks to inflation are still a bigger concern for the Federal Reserve and expect they will raise rates at the end of the month," a note from Oxford Economics says. (jessica.coacci@wsj.com)

0928 ET - The September jobs report will be viewed as good news for the credit markets, Catalyst Funds' Larry Holzenthaler says in a note. The weak payrolls number can provide a slightly more balanced sentiment around interest rates by dropping the urgency for another Fed hike while keeping inflation as the central bank's primary concern, he says. A slower rate of rate hikes will ease anxieties in the credit markets, which have gotten angsty recently with the sharp rise in yields, Holzenthaler says. Still, the portfolio manager believes that lower-duration, more credit-sensitive assets continue to offer a more attractive risk-return for investors than traditional fixed income. (dean.seal@wsj.com)

0922 ET - The September employment report has further undermined the chances of another Fed hike later this month after the tally of jobs added fell far short of expectations, BMO analysts say in a research note. Private companies aren't hiring as much as expected and past job numbers were downgraded, the analysts say. Job growth remains sluggish and wage growth slowed down, they say. It's a disappointing update on the labor market's conditions that has raised the bar for this month's inflation reports to justify a rate hike at the Fed's October meeting, the analysts say. Odds of an October rate increase are at 18%, according to the CME FedWatch tool. (dean.seal@wsj.com)

0914 ET - Yields on U.K. 2-year government bonds fall to the lowest level in three weeks after weaker-than-expected U.S. jobs data lowered the prospects of the U.S. Federal Reserve raising interest rates in October. U.S. non-farm payrolls increased by 29,000 in September, considerably weaker than the 84,000 consensus forecast by economists in a WSJ survey. Following the data, markets only price in an 18% chance of the Fed increasing rates in October, down from 24% chance prior to the data release, LSEG data show. U.K. 2-year gilt yields hit a three-week low of 4.688%, before trimming the fall to last trade at 4.738%, LSEG data show. Ten-year gilt yields fall to a 9-day low of 5.2897%. (miriam.mukuru@wsj.com)

0847 ET - Lower-than-expected U.S. employment numbers deepen an overnight decline in Treasury yields from lofty levels. September payrolls come at 29,000, lower than WSJ consensus of 84,000. July and August numbers are revised down by a total of 60,000. The unemployment rate ticks higher to 4.2%, versus estimates that it would stay at 4.1%. The data bolsters forecasts of a more moderate pace of interest rate increases by the Fed. Oil prices also cooperate, falling over 3%. The WSJ Dollar Index falls 0.3%. The 10-year Treasury yield is at 5.178%, down from 5.239% before the payrolls. The two-year slips to 4.718% from 4.773%. U.S. stock indexes extend early gains, with S&P 500 futures up 61.5 points. (paulo.trevisani@wsj.com; @ptrevisani)

0833 ET - The widening gap between yields in Treasurys and European government bonds is weighing on the euro versus the dollar despite resilient eurozone economic indicators, XS.com's Simon-Peter Massabni says in a note. "The divergence between strong eurozone fundamentals and a weak single currency highlight how yield differentials currently dominate price action," he says. Sticky energy prices are keep Treasury yields stubbornly high, reinforcing the dollar's yield advantage relative to European assets, he says. The euro rises 0.1% to $1.1248, having reached a 16-month low of $1.1214 Thursday, LSEG data show. The spread between the 10-year Treasury-German yield reaches the widest since June 2025 on Friday.