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

1004 ET - The Norwegian krone could trade sideways near-term as the positive impact of elevated energy prices offset weaker risk sentiment and U.S. interest rate rise expectations, Danske Bank's Mohamad Al-Saraf says in a note. "We still see the global environment as the key near-term driver, with Federal Reserve expectations, risk sentiment and, not least, energy markets being the main factors to watch." Danske maintains a neutral krone stance for now. However, it expects the krone weaken further out due to Norway's high unit labor costs, declining interest rate differential compared to peers and expected easing of energy prices. The euro trades flat at 10.8070 krone and Danske expects it to reach 11.50 in 12 months. (renae.dyer@wsj.com)

0956 ET - Michelle Bowman, Vice Chair for Supervision of the Fed's Board of Governors, announces the initial findings of the independent review of Silicon Valley Bank's collapse in 2023. "SVB failed as the result of a confluence of vulnerabilities including real but unrealized accounting losses on its securities portfolio that exceeded its capital," Bowman says when delivering remarks in London. Bowman also says the supervisory staff at the Fed knew, or should have known, about these vulnerabilities as early as March 2022. "Supervisory staff did not take prompt and decisive action to encourage or require SVB to reduce its interest rate risk or concentration of vulnerabilities," a published text of her remarks says. Bowman believes one significant factor contributing to supervisory inaction was a long-standing culture of risk aversion. (jessica.coacci@wsj.com)

0939 ET - The Bank of England on Thursday announced significant changes to its quantitative tightening program, or the process of shrinking its gilt holdings, a positive development for the gilt market, analysts at BNP Paribas say in a note. The pause of active gilt sales until April, reduces gilt supply, they say. The BOE's plan to sell 20 billion pounds in gilts to the Debt Management Office, annually until 2034, makes gilt supply more predictable and reduces uncertainty, the analysts say. Gilt yields fell after the BOE announcement, but they are up on Friday after stronger-than-expected retail sales data and in line with rising yields globally. Ten-year gilt yields climb 7.3 basis points to 5.291%, Tradeweb data show. (miriam.mukuru@wsj.com)

0932 ET - ING now expects both the Federal Reserve and European Central Bank to hike interest rates once before the end of the year, a change from the holding path it previously forecast. "Wednesday's Fed meeting and last week's ECB meeting have shown us that both central banks are not likely to follow the very dovish path we anticipated," ING economists say in a note. Both central banks are facing a supply-side shock driven by surging energy prices that has so far produced only limited knock-on effects across the broader economy, set against still-fresh memories of the 2022 inflation surge and delayed monetary-policy responses, the economists say. They suspect both banks to increase rates in December. (edward.frankl@wsk.com)

0931 ET - The Swedish krona's recent poor performance looks set to continue as the European Central Bank raises interest rates and the Riksbank holds rates steady, Danske Bank's Jesper Fjarstedt says in a note. The eurozone-Swedish policy rate gap stands at 75 basis points, the widest it has ever been, after the ECB raised rates by 25 basis points last week, he says. That spread could widen if the ECB lifts rates again in October and December while the Riksbank lingers until November and February, he says. The euro rises 0.3% to 11.2985 krona and Danske expects it to reach 11.50 in 12 months. (renae.dyer@wsj.com)

0925 ET - The Bank of Japan answered U.S. Treasury Secretary Scott Bessent's call to raise rates, but the yen is still weaker, potentially creating a new concern for Bessent, who helped lead the first coordinated support for the yen since 1998 earlier this summer. "The result was that while the BoJ certainly did shift hawkish, it was not enough to meet market expectations ramped up by US Treasury Secretary Bessent who had talked up his 'asymmetric information' in his battle to strengthen the Yen," says Krishna Guha of Evercore ISI. "The BoJ's reticence to signal more aggressive policy will strain his efforts to strengthen the Japanese currency." The Japanese yen is off 1% against the U.S. Dollar at 157.73 JPY. (patrick.sheridan@wsj.com)

0909 ET - Prime Minister Carney's inaugural Canada Investment Summit this week drew some of the world's biggest capital managers, where they were pitched investment opportunities in shovel-ready developments. Any push to boost an underwhelming record on foreign direct investment is welcome, though National Bank's economists note the summit wasn't needed to spur foreign portfolio investment. Non-resident investors remain enthusiastic buyers of Canadian securities this year, confirmed by recent international securities transactions data, they note. Non-residents through July picked up a record year-to-date C$179 billion in Canadian portfolio securities, spurring a big swing in capital flows as Canadians have been net buyers of foreign securities but at a slower pace. (robb.stewart@wsj.com; @RobbMStewart)

0905 ET - Treasury yields edge higher and the curve flattens as markets price in a more hawkish Fed. Wednesday's hike boosts confidence in the Fed's commitment to fighting inflation. That makes shorter-term yields rise faster than long-term ones. The 10-year yield is at 4.973% and the two-year at 4.722%, both slightly higher than yesterday but below highs set earlier this week. The spread between the two benchmarks is on pace to settle at the narrowest level since March 2025. (paulo.trevisani@wsj.com; @ptrevisani)

0854 ET - U.K. consumers continue to demonstrate a strong willingness to spend, helping the economy even with elevated energy prices and the prospect of higher interest rates, Pantheon Macroeconomics' Rob Wood and Elliott Jordan-Doak say in a note. Some of August's 0.5% rise in retail sales volumes was flattered by earlier-than-usual promotions in June weighing on July's sales figures. "But that misses the big picture that households' spending has been strong for months now, despite the barrage of headwinds," the economists say. The trend in retail sales volumes has risen 2.4% month-to-month annualized over the past six months, they note. However, consumer spending is set to slow with climbing energy costs and higher mortgage rates ahead, they add. (edward.frankl@wsj.com)

0851 ET - U.K. Chancellor John Healy faces significantly less fiscal flexibility ahead of the autumn budget, Sanjay Raja and Maui Brennan at Deutsche Bank say in a note. They estimate fiscal headroom at just over 8.5 billion pounds, less than half the level at the Spring Statement, while headroom under the secondary debt rule has fallen to 17.2 billion pounds. Interest rates are higher than expected in the spring, adding roughly 13 billion pounds to government debt-interest costs by 2030-31, the economists say. Higher inflation from the energy shock will also add around 2 billion pounds to borrowing. Meanwhile lower immigration--which reduces the working-age population and tax base--could add a further 2 billion pounds, they add. (don.forbes@wsj.com)

0840 ET - The Federal Reserve's decision Wednesday to raise interest rates and signal further tightening leaves the euro at risk of falling further against the dollar in coming weeks, ING analysts say in a note. The euro could fall below $1.14 with risks extending to the $1.132 June lows if oil prices jump again and the Fed lifts rates further as soon as October, they say. However, the Fed is likely to raise rates again in December along with the European Central Bank, which should have a neutral impact on the exchange rate, they say. ING still expects the euro to rise to $1.16 by year-end if oil prices ease and risk sentiment improves. The euro falls 0.1% to $1.1462. (renae.dyer@wsj.com)

0709 ET - The dollar rises to a seven-week high against a basket of currencies as markets bet on further U.S. interest rate rises after the Federal Reserve lifted rates by 25 basis points on Wednesday. Fed officials penciled in at least one more rate rise by year-end. The Fed has "given the green light to markets to fully price in a hike in October if data and energy prices suggest so," ING's Francesco Pesole says in a note. The dollar is also helped by a weaker yen after the Bank of Japan lifted rates by 25bps Friday but its signals about future increases failed to meet aggressive expectations. The DXY dollar index rises to as high as 100.448.