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

1013 ET - The number of Canada-based Redfin.com users searching for U.S. homes to buy or rent fell 15.3% year-over-year in June, according to Redfin. That after a 10.1% decline in May. Over the past two years, Canadian searches for U.S. homes have dropped roughly 37%, after posting a 25.7% year-over-year decline in June 2025. Redfin says Canada's economy is starting to recover after a weak start to the year, but uncertainty around trade, jobs, the domestic housing market and inflation is still prompting many Canadians to think twice about making a major purchase. Canada-based home searches declined from a year earlier in 45 of the 50 most populous U.S. metros. (chris.wack@wsj.com)

1010 ET - The U.S. Federal Reserve is expected to leave interest rates unchanged at Wednesday's rate decision, but it could indicate a willingness to increase rates at future meetings, eToro's Lale Akoner says in a note. "We think the most likely outcome is a hold with a hawkish tone, tougher language on inflation and little comfort for anyone hoping the rate-hike debate is over," she says. U.S. money markets are fully pricing in one quarter-point rate Fed rate increase in September, LSEG data show. (miriam.mukuru@wsj.com)

0959 ET - The selloff in the Japanese yen and the country's government bonds reflect the Bank of Japan's inflationary policy, BCA Research's Mathieu Savary says in a note. Japan's real policy rate adjusted for inflation stands at -0.75%, he says. It was only more negative during the global inflation surge that followed the Covid-19 pandemic, he says. Accommodative monetary policy combined with budding inflationary pressure is worrying yen and bond investors as it is forcing the economy to overheat, he says. The yen and bonds face further weakness over 2026, he says. The dollar rises 0.1% to 163.85 yen, having reached a 40-year high of 163.98 last week, LSEG data show. Japan's 10-year yield is little changed at 2.775%. (renae.dyer@wsj.com)

0959 ET - The dollar could suffer knee-jerk weakness if the Federal Reserve leaves interest rates steady on Wednesday, TD Securities strategists say in a note. Market pricing on LSEG shows a 34% possibility that the Fed could raise rates Wednesday and are fully pricing a move by September. The TD analysts expect unchanged rates with Beth Hammack and Lorie Logan dissenting in favor or raising rates. Still, any short-term dollar weakness will likely be limited as Fed rate-hike pricing for the rest of the 2026 remains intact, they say. TD sees Fed Chair Kevin Warsh providing little forward guidance, reiterating a commitment to price stability. Warsh could note the fall in recent inflation data while suggesting inflation remains elevated, they say. (renae.dyer@wsj.com)

0942 ET - An interest rate increase by the Fed tomorrow can't be ruled out and it would give Chairman Warsh "massive inflation credibility," Bank of America strategists write. Although they expect a hold with a couple of hawkish dissents, there is more uncertainty than usual, as oil prices spiked following June's soft inflation numbers. BofA points out that since 1994 the Fed has never hiked with less than 60% priced. According to CME, a hike is priced at 32%. BofA expects the hawkishness to flatten the Treasury curve, with shorter-term yields rising and longer-term ones falling. That would also strengthen the dollar, the strategists say. (paulo.trevisani@wsj.com; @ptrevisani)

0937 ET - Wage growth has slowed noticeably in Canada's labor market, or below 3% on a 12-month basis, which likely portends a subsequent cooling in household consumption as inflation stays near or above 3%, says economist Brendon Bernard at job-posting site Indeed.com. Overall, Canada's labor market has stabilized with a decent 2Q showing, although Bernard says a further pickup in hiring is not in the cards due to stagnant population growth. "Slow job growth is likely to continue through 2026," Bernard says, adding the deceleration in wages "presents a real risk" to the broader economy, given elevated energy prices. The drop in wage growth threatens "to erode purchasing power gains built up over the past few years." (Paul.Vieira@wsj.com; @paulvieira)

0913 ET - Sterling could fall in coming months if the Bank of England avoids raising interest rates and political friction over budget cuts emerges under new Prime Minister Andy Burnham, Rabobank's Jane Foley says. The BOE is expected to keep rates unchanged Thursday but some policymakers could favor raising rates, fueling the debate about the risk of future tightening, she says in a note. Against a background of soft economic activity indicators and uncertainty over the government's autumn budget, Rabobank expects steady rates through to year-end. Meanwhile, Burnham's plans to tackle welfare reform could spark tensions within the ruling Labour Party, Foley says. The euro falls 0.1% to 0.8547 pounds and Rabobank expects it to reach 0.8700 in three months. (renae.dyer@wsj.com)

0856 ET - Gulf economies are receiving near-term support from elevated oil prices, but prolonged regional uncertainty threatens longer-term private-sector growth. Higher oil prices are supporting fiscal and external revenues in Saudi Arabia, the United Arab Emirates and Oman despite risks that prolonged uncertainty could weaken business confidence, private-sector activity and foreign direct investment, S&P Global Ratings says in a report. The ratings agency says easing export obstructions could also benefit Kuwait, Bahrain and Qatar, while Oman is well-positioned to capture trade through more secure maritime routes and Dubai's Jebel Ali port could face higher operating costs. (farhan.rafid@wsj.com)

0843 ET - Treasury yields take another step lower as hostilities remain suppressed in the Strait of Hormuz. Oil prices keep falling, with Brent down 2%. The WSJ Dollar Index is flat. The Conference Board Consumer Confidence Index for July is expected to tick higher to 92 from 91.2, according to a WSJ consensus. Markets are mostly pricing in a Fed hold tomorrow, but odds of a hike are still relatively high, at 36% on the CME's FedWatch tool. Inflation-linked swap rates indicate investors expect inflation to be below the Fed's 2% target a year from now. The 10-year yield slips to 4.631% from yesterday's 4.640% settle. The two-year declines to 4.302% from 4.318%. (paulo.trevisani@wsj.com; @ptrevisani)

0833 ET - Supply disruptions from the Iran war are accelerating competition among Gulf states as they pursue national energy strategies. The United Arab Emirates is seeking to raise oil production toward capacity following its exit from OPEC, while Qatar is moving ahead with expansion of liquefied-natural-gas production from its North Field, S&P Global Ratings says in a report. The moves signal a more aggressive effort by Gulf governments to generate returns from their natural-resource endowments, the ratings agency says. (farhan.rafid@wsj.com)

0832 ET - French consumer confidence firmed in July, completing a strong start to third-quarter survey data after pickups in the PMIs and Insee business confidence, Pantheon Macroeconomics' Claus Vistesen says in a note. The headline index rose to 86 from 84 in June, lifted by improvement in households' outlook for their own financial situation and the economy. Major purchasing intentions also climbed, though the survey's savings index rose as well, Vistesen notes. Since the survey period, however, airstrikes have resumed in Iran and energy prices have rebounded. Moreover, France is now also grappling with major forest fires, which are likely to weigh on household confidence in affected regions, and on sentiment in tourism and hospitality, he says. (edward.frankl@wsj.com)

0809 ET - French corporate credit spreads remain tight compared to their sovereign peers, leaving them vulnerable to widening, Morgan Stanley credit strategists say in a note. France faces a weak fiscal outlook, political uncertainty, and a deteriorating credit rating outlook, which could cause sovereign spreads and credit spreads to widen in the coming months, the strategists say. "We expect historical correlations to reassert themselves, with banks particularly exposed given their higher [sensitivity] to sovereign spreads."