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

1136 ET - Second-round effects from high energy prices in the U.K. are unlikely to emerge, largely because labor-market conditions are much looser than they were in 2022's inflationary episode, Oxford Economics' Andrew Goodwin says in a note. The Bank of England will therefore hold its key interest rate at 3.75% until well into next year, he says. Then, once policymakers are content that the inflation shock has proven transitory, it should cut rates again, according to Goodwin. A majority of rate setters feel that cooling domestic inflationary pressures before the Iran war, the fact that the policy rate is already restrictive, and the tightening in financial conditions that's already occurred, give them breathing space to sit back and see how things play out, he says. (edward.frankl@wsj.com)

1132 ET - The U.K. government could raise taxes or reduce public spending or consider both measures at the October 28, budget due to rising borrowing costs, AJ Bell's Dan Coatsworth says in a note. Gilt yields hit multi-decade highs last week and remain close to those levels due to inflation concerns driven by accelerating oil prices. Ten-year gilt yields climb 5.8 basis points to last trade at 5.219%, after hitting a 19-year high of 5.294% last week, LSEG data show. (miriam.mukuru@wsj.com)

1105 ET - While the Bank of England is set to keep interest rates unchanged next week, its tone will likely become more cautious after recent re-escalation of tensions in the Middle East, UBS economists say in a note. The increase in energy prices is likely to be a concern for policymakers as they had previously argued that a more persistent energy shock would imply a greater risk of second-round effects occurring, they say. Rising expectations of hikes by the Federal Reserve, Bank of Japan, alongside the already-tightening European Central Bank, may put pressure on rate setters to be more proactive. Even if second-round effects are so far absent, reputation and risk-management considerations could tilt the BOE towards pre-emptive hikes, the economists say. (edward.frankl@wsj.com)

1049 ET - Bitcoin stays in its recent range between $77,000 to $81,000, with it trading up 0.7% to $79,068. The volume and activity that powered bitcoin in recent weeks appears to have shifted towards altcoins, says analysts with Bitfinex in a note. "Every one of the 29 largest liquid pairs rose between 1-8 September, with a median gain of 10.2% against 1.4% for bitcoin," says the firm. Polkadot is the leading gainer among major cryptocurrencies in that timeframe, having gained 35% in the past week, according to data from CoinGlass. "This reflects a return of risk appetite in the market," says Bitfinex. Ethereum rises 0.6% to $2,498, XRP climbs 0.7% to $1.42, and solana is up 0.4% to $103.47. (kirk.maltais@wsj.com)

1046 ET - Any future curbs on short-term rentals in the EU should be rooted in evidence, travel industry lobby group eu travel tech says. The comments come on the heels of a European Commission proposal to give local authorities more legal clarity when they seek to crack down on tourist rentals if they are harming the local housing market. The group--which counts Airbnb, Booking.com and Expedia Group as members--says that short-term rentals represent around 1.2% of dwelling stock while nearly 20% of EU dwellings are unoccupied. "If the EU wants to solve the housing crisis, it must address its real drivers--not target short-term rentals," it says. (edith.hancock@wsj.com)

1022 ET - New listings of homes for sale rose 2.6% month over month to their highest level in over four years in August, according to Redfin. The surge in fresh supply was driven by San Jose, where listings rose 25.5% year over year, Nashville at 15.8% and Seattle, 13.7%. More homeowners are listing as the mortgage-rate lock-in effect fades, life circumstances prompt moves and sellers adjust to a slower market. The jump in listings is contributing to a widening pool of overall supply. The total number of homes for sale rose 3.9% from a month earlier to its highest level since 2020. Pending home sales were flat from a month earlier. Closed home sales, a more lagging indicator of demand, fell 0.5% to their lowest level in over a year. (chris.wack@wsj.com)

0954 ET - Canada's retaliatory tariffs on C$28 billion in U.S. goods is a shift that should translate to a real consumer drag. According to an ATB Financial report, the response to President Trump's latest tariffs will raise the cost of imports, now that an estimated 7%-8% from the U.S. are subject to counter-tariffs. "Some of the impacts on consumer prices are direct," says the report, pointing to consumer purchases of household goods, recreation and food, while others are indirect, meaning the tariffs fall on industrial and capital purchases that raise the cost of production which will partially be passed onto customers. The report says that this should raise inflation by 0.2%-0.3% on a rate that is "already running too high at about 3%." (adriano.marchese@wsj.com)

0934 ET - Bank of Nova Scotia economist Derek Holt says that, on net, the Trump administration's adjusted tariffs and ban on certain Canadian imports is more like a "face saving" exercise. It's "not substantive in nature and that's a positive," Holt tells clients. His team estimates a net impact for Canada of $1.2 billion, or 0.3% of nominal GDP. Some of the banned imports from Canada amount to "small potatoes," Holt adds, citing $100 million of motorcycles. Canadian dairy products subject to a U.S. ban had minimal sales to America, Holt adds. Forex traders appear in agreement, with the Canadian dollar holding steady versus USD. (Paul.Vieira@wsj.com; @paulvieira)

0931 ET - President Trump's orders to ban certain Canadian imports "could have been much worse," says Wolfgang Alschner, a business-and-trade law professor at the University of Ottawa. "It is clearly more posturing than escalation," he says in a LinkedIn post. Alschner says the ban of certain Canadian imports, effective Sept. 29, is modest, and covers less than 0.25% of Canadian exports. For instance, the U.S. intends to ban Canadian-made mopeds valued at C$81 million. Canadian alcohol accounts for a sizable chunk of the U.S. import ban, but Alschner notes the ban covers only packaged products. Canadian alcohol, like beer, can be sent to the U.S. in bulk and packaged there, he adds. (Paul.Vieira@wsj.com; @paulvieira)

0856 ET - The difference between European Central Bank and Federal Reservepolicy will be a key determinant for the euro and dollar in the coming months, Marex FX's Jonathan Pryor says in a note. "The market is adjusting to evolving themes such as AI debt burden and the fallout from geopolitics, alongside supply side inflation," the co-head of dealing and head of private markets says. "But what is certain is that monetary policy and yield divergence will compete to remain in the driving seat," he says. The ECB is expected to raise interest rates at its policy meeting on Thursday. Any comment policymakers give on the recent jump in government-bond yields will also be closely watched, he says. (emese.bartha@wsj.com)

0845 ET - The 2-year yield is rising as Brent crude crosses the $100-a-barrel threshold amid the escalating conflict in the Middle East. The U.S. military destroyed five Iranian oil tankers Tuesday, and Iran retaliated overnight with a ballistic-missile attack from Iranian territory into Jordan, with no casualties reported. The 2-year yield is at 4.43%, up from Tuesday's level of 4.40%. The 10-year yield is trading roughly at Tuesday's level of 4.81%. It's a light day for any major U.S. economic releases, and investors will be eyeing buyback details from the U.S. Treasury. (jessica.coacci@wsj.com)

0834 ET - President Trump's ban of Canadian imports covers only 0.25% of goods that Canadian firms send southbound, according to estimates from Stephen Brown of Capital Economics. Trump's tariff adjustments are also a wash, he says, as the new Canadian imports subject to a 50% duty are offset by other goods now exempt. Brown cites, for instance, the removal of the 50% levy on switchgear assemblies and cement from Canada, which he reckons is connected to America's push to build data centers. The economic damage is minimal, Brown says, but adds a weak 4Q is now a strong possibility. Brown's bigger worry is a sharply diminished likelihood of Washington and Ottawa resolving their trade conflict, and an increased risk that Trump withdraws from the US-Mexico-Canada trade treaty, or USMCA.