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

1007 ET - The Japanese yen has the potential to recover versus the dollar next year if the market reduces expectations for interest-rate rises by the Federal Reserve, Rabobank's Jane Foley says in a note. The yen's weakness since the last Bank of Japan policy decision reflects some impatience in the market over a lack of "hawkish" signals for further interest-rate rises, at least compared to the Fed, she says. "It is Rabobank's house view that the market has anticipated too much Fed policy tightening next year." The dollar trades flat at 157.97 yen and Rabobank maintains a three-month target of 155.00. (renae.dyer@wsj.com)

1002 ET - The euro should continue to recover from its recent selloff versus the dollar as the Federal Reserve is unlikely to raise interest rates beyond what the market has already priced in, TD Securities strategists say in a note. "The U.S. economy is resilient but not exceptionally heating up and the Fed will hike at a quarterly pace like other central banks." Meanwhile, the spread between French-German government bonds has retraced from multiyear highs. Nonetheless, the current stability remains fragile and it will likely take time for markets to close bets on the euro falling versus the dollar, they say. The euro rises 0.3% to $1.1257 after reaching $1.1160 Monday, its lowest level in more than 16 months, according to LSEG. (renae.dyer@wsj.com)

0935 ET - Cross-border payments are currently the clearest use case for blockchain-based securities, says Ava Labs' head of institutional finance. The move to blockchain will grow exponentially in some asset classes, Mike Manning says at the Digital Assets Week conference in London. "By 2030 there will be some asset classes that are majority digital." Trading in assets in traditional venues and on blockchain will increasingly converge, Manning says. For investors, the priority is gaining price exposure to an underlying asset--the technology via which they invest in the asset is less important, Manning adds. (josephmichael.stonor@wsj.com)

0930 ET - Wall Street is on pace for a far stronger year than anticipated. Profits totaled $45.9 billion in the first half of 2026, up 51% from the same period last year, according to a report by New York State Comptroller Thomas DiNapoli. First-half profits have surpassed New York City's $45.3 billion forecast for the entire year, and if that pace of growth continues, profits could exceed $90 billion in 2026, the report says. "Wall Street is having an exceptionally strong year, fueled by a boom in artificial intelligence spending, increased merger and acquisition activity, and elevated trading volumes amid market volatility," DiNapoli says. "Despite geopolitical tensions and economic uncertainty, the industry has remained resilient." (connor.hart@wsj.com)

0906 ET - What goes up has a habit of coming back down, and that may be the case with Canada's goods-trade surplus that widened sharply in August. Exports were up for the month and imports fell for the first time in seven months. The depreciation in the Canadian dollar to the greenback played a role, but then so likely did tariffs. Exports to the U.S. surged, but fell to non-U.S. countries. Recall the Trump administration in late July proposed new tariffs on a range of Canadian goods, which came into effect late in August and may have spurred front-running similar to what Canadian shippers saw in early 2025. The share of Canadian exports heading to the U.S. climbed to 69.8% in August, the largest share since September 2025, after sliding to 66% in July. (robb.stewart@wsj.com; @RobbMStewart)

0858 ET - Treasury yields slip as a global bond selloff eases amid a 3% decline in oil prices. Borrowing costs, however, remain close to recent highs, as markets worry about inflation, government spending and corporate borrowing. The U.S. trade deficit widens more than expected in August, to $105.6 billion. The Treasury is auctioning $58 billion in three-year notes and elevated yields are expected to ensure robust demand. The 10-year yield trades at 5.273%, down from yesterday's settlement of 5.310%, which was the highest since April 2002. The two-year falls to 4.785% from 4.831%. (paulo.trevisani@wsj.com; @ptrevisani)

0852 ET - Sterling looks vulnerable ahead of the October 28 U.K. budget, Morgan Stanley strategists say in a note. The budget could bring a delay to the consolidation process and lower fiscal headroom, they say. "We see risks to our estimates as skewed towards a bigger headroom hit, as we don't incorporate any major adjustment from lower immigration flows." This implies some insufficient pricing of fiscal risks in sterling, they say. Morgan Stanley recommends selling sterling against the dollar with a target of $1.2850 and a stop loss of $1.3350. Sterling is last up 0.5% at $1.3279. (renae.dyer@wsj.com)

0810 ET - Central 1 Credit Union anticipates the Bank of Canada will raise interest rates twice, and won't make its first move until early next year, despite financial markets pricing in a more aggressive rate cycle. Economist Bryan Yu says the country is in a period of high uncertainty and the outlook is fluid, with soaring bond yields, tariff impacts and high oil-price volatility. Canadian core inflation remains near 2% and economic growth is likely to slow in late 2026 with trade uncertainty, with higher bond yields tempering a housing-market recovery, Yu notes. (robb.stewart@wsj.com; @RobbMStewart)

0802 ET - The Treasury auctions $58 billion in 3-year notes later today, with $39 billion in 10-year notes on the docket for Wednesday and $22 billion in 30-year bonds to be auctioned Thursday. Analysts said the looming auctions were one factor pushing yields up Monday, with some investors likely nervous about how the auctions would be received. But JPMorgan's fixed income strategy team believes today's auction should be met with better demand. "Three-year yields have risen by 48bp since the last auction and if they clear at this level, it would be the highest yielding 3-year auction since May 9th 2006. Given a more supportive macro and technical backdrop, we think [Tuesday's] auction will be digested smoothly," the strategists say. (patrick.sheridan@wsj.com)

0738 ET - Bitcoin is showing resilience, along with other risky assets, to recent major headwinds, Block Scholes analyst Thahbib Rahman says in a note. The U.S. Senate's failure to advance the Clarity Act crypto regulation bill and the Federal Reserve's decision to raise interest rates in September have failed to meaningfully weaken bitcoin, he says. However, bitcoin has struggled to sustain levels above $87,000, making it a key resistance level, he says. Spot bitcoin exchange traded funds demand has also eased slightly. Still, investors are maintaining a positive bias and "as long as geopolitical tensions do not escalate and interest rate hike expectations remain subdued, markets could remain in risk-on mode." Bitcoin rises 0.6% to $86,270, LSEG data show. (renae.dyer@wsj.com)

0731 ET - KPMG continues to expect one performative interest rate increase from the Bank of Canada, and now sees that coming in December. Markets are pricing in four increases by the end of 2027, which KPMG doesn't reckon is sensible. A single increase is about financial dominance and the need to demonstrate central bank credibility, rather than any worry about the current fundamentals, KPMG argues. The Bank of Canada is likely to send a strong signal at the October meeting, act in December, then hold tight for the foreseeable future, it says. (robb.stewart@wsj.com; @RobbMStewart)

0720 ET - Tokenization, or the ability to convert real-world assets into digital tokens, will become the new normal as private companies and politicians push to bring the technology into the mainstream, Union Investment's head of tokenization and digital assets Christoph Hock says. "Politicians are driving the shift into a redefinition of financial market infrastructure," Hock says at the Digital Assets week conference in London. Central bank interest in developing their own tokenization capabilities is encouraging, and adds to progress from private companies in bringing the technology into the mainstream. "The ingredients are all there" for tokenization adoption to significantly increase, Hock says.