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

0858 GMT - The dollar should remain well supported by expectations for further interest-rate rises by the Federal Reserve, ING's Chris Turner says in a note. The market expects a rate increase in December followed by two rises next year, LSEG data show. "We think that is too aggressive, but doubt the market will want to fight against that hawkish pricing this year," Turner says. The dollar also benefits from elevated Treasury yields and rising volatility which cause an unwinding of carry trades, hitting Latin American currencies. Carry trades involve borrowing in low-yielding currencies to invest in higher-yielding currencies. French fiscal concerns provide additional support to the dollar, he says. The DXY dollar index rises 0.1% to 102.322 and ING targets 102.850. (renae.dyer@wsj.com)

0857 GMT - The Federal Reserve will likely leave rates unchanged in October before raising them by 25 basis points in December, HSBC Global Research analysts write in a note. Thereafter, HSBC projects a steady federal-funds rate range of 4.00%-4.25% through 2027, saying that the committee's goal of bringing inflation down will take time. That compares with current market pricing for more than 75 basis points of additional hikes by the end of 2027, with the policy rate rising to nearly 4.7%, the analysts say. The pricing shows that markets are grappling with the question of what magnitude of hikes might be needed amid various shocks fueling inflation and the apparent resilience in overall U.S. economic momentum. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

0852 GMT - Markets await remarks by the Bank of England officials on Thursday for clues on the possibility of a BOE rate increase in November, Mizuho's Evelyne Gomez-Liechti says in a note. The BOE Governor Andrew Bailey, and monetary policy committee members Huw Pill, Megan Greene, and Clare Lombardelli are set to speak at different forums. Investors are likely to pay special attention to Bailey and Lombardelli for any signs of a shift to favor a rate increase in November, Gomez-Liechti says. Markets price in an 83% chance of a BOE rate hike in November, LSEG data show. (miriam.mukuru@wsj.com)

0759 GMT - The Federal Reserve signaling a potential second interest-rate increase this year remains a major overhang for the Asian real-estate investment trust sector, say DBS Group Research analysts in a note. The first rate hike by the U.S. central bank in over three years last month has placed REITs under pressure. Rising bond yields, higher funding costs for REITs and a hawkish Fed outlook reduces the appeal of REIT distribution yields against risk-free alternatives, they say. However, the sector's fundamentals remain resilient, DBS adds. More defensive REIT subsectors such as healthcare could outperform peers, while industrial REITs with large non-Asian exposure could be subject to more volatility in financing costs and foreign-exchange movements. (megan.cheah@wsj.com)

0759 GMT - Markets' expectations of the Bank of England interest-rate rises look overdone, Berenberg's Andrew Wishart says in a note. High energy prices have raised inflation concerns, leading investors to fully price in four quarter-point BOE rate increases by September 2027, LSEG data show. The BOE may not need to raise rates aggressively as high energy bills and elevated interest rates are likely to limit consumer demand, he says. "We expect a solitary 25 basis-points hike in November followed by a return to policy loosening in the fourth quarter of 2027." (miriam.mukuru@wsj.com)

0751 GMT - Gold prices tick higher as traders assess the possibility of another Federal Reserve interest-rate hike this year. Minutes from the September FOMC meeting showed most policymakers expected another hike by the end of the year, but didn't make an urgent case for such a move at the next meeting in October. In early trading, New York gold futures are up 0.1% to $4,143.40 a troy ounce. "The price action highlights an ongoing battle between macro and technically focused traders selling gold in response to higher funding costs and dollar strength, and investors seeking protection against the potential fiscal fallout from rising debt and borrowing costs," analysts at Saxo Bank say. (giulia.petroni@wsj.com)

0747 GMT - Despite the decline in exports in August, German net trade should rise in the third quarter of the year, due to falling imports, Pantheon Macroeconomics' Claus Vistesen says in a note. Imports rose by 0.9% on month, though that didn't nearly offset the plunge in July, leaving a picture of sharply falling imports over the third quarter as a whole, he says. Meanwhile, exports dipped 0.8% in August. "September could still change the picture for the third quarter if imports rebound strongly, but for now, these data signal another GDP growth boost," Vistesen says. (edward.frankl@wsj.com)

0746 GMT - Sterling's recent gains against the euro could extend further on the prospect of the Bank of England raising interest rates at its next meeting, ING's Chris Turner says in a note. The recent rally in sterling versus the euro largely reflects French debt concerns but the U.K. currency could start to receive support from BOE policy if it lifts rates in November, he says. Markets will be assessing comments from BOE Governor Andrew Bailey and BOE official Clare Lombardelli later in the day. "Any suggestion that they are ready to cross the Rubicon and vote for a hike could depress euro-sterling further today." The euro rises 0.1% to 0.8479 pounds, having reached a 16-month low of 0.8445 Wednesday, LSEG data show.(renae.dyer@wsj.com)

0743 GMT - The euro is likely to face further weakness in the near term due to concerns about France's fiscal position, Commerzbank's Thu Lan Nguyen says in a note. Ambitious plans to rein in public spending by far-right presidential candidate Marine Le Pen provided only temporary relief, she says. "One reason may be that she simultaneously called on the European Central Bank to intervene in order to give euro-area governments greater fiscal room for manoeuvre." Meanwhile, France's central bank chief Emmanuel Moulin said he doesn't think the ECB needs to intervene at this point. Against this backdrop, continued market nervousness appears justified, Nguyen says. The euro trades flat at $1.1190 after reaching a 16-month low of $1.1160 Monday, LSEG data show.(renae.dyer@wsj.com)

0733 GMT - Yields on U.K. government bonds, or gilts, rise as accelerating oil prices raise concerns about inflation and the possibility of interest-rate rises by the Bank of England. Brent crude climbs 3.6% to $103.8 a barrel. Markets price in an 83% chance of a BOE rate increase in November and fully expect four rate hikes by September 2027, LSEG data show. Ten-year gilt yields rise 4 basis points to last trade at 5.483%, Tradeweb data show. (miriam.mukuru@wsj.com)

0708 GMT - Financial markets are likely to be shaped by two conflicting forces in 4Q: high government bond yields, and robust economic momentum with continued corporate earnings growth, says Vincenzo Vedda, global chief investment officer at DWS. "While higher oil prices have often been cited as the main driver of higher bond yields, the increase has not been fueled by rising inflation expectations but by a rise in real yields," he says. As the 3Q earnings reporting season approaches, higher expectations compared with 2Q raise the risk of disappointment even if the numbers are good, Vedda says. There needs to be sufficiently broad earnings momentum for equities to offset higher bond yields, which are typically a drag on most sector valuations, he adds. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

0659 GMT - ​For U.S. Treasury valuation, a high yield doesn't necessarily mean Treasurys are cheap, Barclays's Demi Hu and Anshul Pradhan say in a note. If most of the yield reflects expected short rates, investors receive less additional compensation for holding duration rather than rolling shorter-maturity instruments, the strategists say. "A higher term premium provides more compensation, but also reflects greater uncertainty and duration risk," they say, adding that the distinction also affects where risk lies along the curve. A reassessment of the near-term policy path should be concentrated primarily in the front-end and belly, or intermediate segment, while a durable increase in term premium or long-run neutral rate assumptions should exert greater pressure further out the curve, they say.