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

0941 GMT - Britain's solid economic performance should keep sterling supported against the euro on any fresh selloff in global government debt, Ebury strategist Matthew Ryan says in note. Renewed fears over the widening in yields between French and German government bonds has weighed on the euro this week, he says. At the same time, U.K. Prime Minister Andy Burnham's suggestion about opening a formal debate on the U.K. rejoining the EU has lifted sterling. "We don't expect this to provide any lasting support for sterling, however, as another referendum is both fanciful and, in our view, highly unlikely to see the light of day." The euro trades flat at 0.8516 pounds after reaching a 10-week low of 0.8504 Thursday, LSEG data show. (renae.dyer@wsj.com)

0923 GMT - The euro stays slightly higher against the dollar after data showed eurozone inflation accelerated by more than expected in September. Annual inflation rose to 3.8% in September from 3.2% in August. Economists in a WSJ survey expected 3.6%. Core inflation rose to 2.5% in September from 2.4% in August, as expected. The euro rises 0.1% to $1.1247, little changed from before the data. Higher-than-expected inflation data from individual countries earlier this week meant Friday's figures weren't a big surprise. The euro reached a 16-month low of $1.1214 on Thursday, according to LSEG, driven by a stronger dollar on U.S. rate-rise expectations. The dollar falls on Friday after comments from the Federal Reserve's Philip Jefferson dampened rate-rise bets. (renae.dyer@wsj.com)

0820 GMT - Yields on eurozone government bond yields fall sharply, reversing the previous day's jump with help from dimming expectations of another interest-rate increase by the Federal Reserve this month. French government bonds underperform, however, taking French-German yield spreads to their highest since 2012 due to French fiscal worries, even after the government on Thursday outlined a budget proposal for spending cuts and cost savings. Concerns about France could make another European Central Bank rate hike less likely, Commerzbank analysts say in a note. The 10-year Bund yield falls 7.6 basis points to 3.456%, with other eurozone yields down by around 5-7 basis points. The French 10-year OAT yield's fall is less steep, shedding 1.4 basis points to 4.914%. (jessica.fleetham@wsj.com)

0817 GMT - Low appetite for risk assets and demand for safer assets is boosting performance in some developed-market government bonds, including German Bunds and U.K. gilts, Tickmill Group's Patrick Munnelly says in a note. "Global bond markets experienced a pronounced flight-to-safety bid on Friday as escalating credit market anxiety, elevated energy prices, and political instability in France drove capital toward sovereign debt," he says. Fiscal and political uncertainty in France cause investors to reduce exposure to French government bonds. Ten-year U.K. gilt yields and ten-year Bund yields fall by 10.0 basis points and 8.5 basis points to 5.323% and 3.449%, respectively, Tradeweb data show. Ten-year French government bonds decline by less, last down 2.9 basis points at 4.897%. (miriam.mukuru@wsj.com)

0805 GMT - China's new mortgage subsidy is likely to have limited practical impact, according to BofA Securities in a research note. While the subsidy could lower buyer's borrowing cost, the eligibility is "relatively narrow," the bank says. It points out that the subsidy applies only to newly issued commercial mortgages for first-home purchases, with qualifying properties capped at 120 square meters and 1.5 million yuan in value. That said, BofA thinks policy may still help to improve sentiment and provide a partial cushion against the constrained developer cash flow and property investment, the bank says. (tracy.qu@wsj.com)

0749 GMT - Gold prices tick higher as markets scale back expectations for imminent interest-rate hikes by the Federal Reserve. "A drop in U.S. Treasury yields overnight along with more cautious commentary from Fed officials is helping to support gold while PCE inflation released earlier in the week came in below expectations for August," says Soojin Kim from MUFG. The probability of another 25-basis-point hike at the FOMC's October meeting has fallen to 28%, from around 70% a week ago, according to the CME Group's FedWatch tool. The nonfarm payrolls report due later Friday is expected to be the next major catalyst for gold prices. In early European trading, New York gold futures are up 0.3% to $4,212.80 a troy ounce. (giulia.petroni@wsj.com)

0744 GMT - The sharp selloff in French government bonds could lead to an even weaker euro, ING's Chris Turner says in a note. Investors assume that any European Central Bank action fix to the bond market selloff could involve much less or no further policy tightening, which would weigh on euro, he says. In an extreme case, the ECB could use its Transmission Protection Instrument to buy bonds, which would be very euro negative, he says. The euro rises 0.2% to $1.1262 on reduced U.S. rate-rise expectations but remains near Thursday's 16-month low of $1.1214, LSEG data show. ING sees the risk of it reaching $1.10. The 10-year German-French yield spread rises to its highest since 2012 at 149.17 basis points, LSEG data show. (renae.dyer@wsj.com)

0737 GMT - Yields on U.K. government bonds, or gilts, decline, undoing Thursday's sharp increase as demand rises. Elevated yields are attracting investors back into the market, boosting the bonds' performance. In addition, investors are seeking safer assets such as U.S., German and U.K. government bonds as they reduce their exposure to French bonds due to political and fiscal concerns in the country. Markets await U.S. non-farm payrolls data due at 1230 GMT to gain clues on the potential path of future interest-rate rises by the U.S. Federal Reserve. Ten-year gilt yields drop 5.9 basis points to last trade at 5.365%, after hitting 5.510% on Thursday, the highest level since 2007, LSEG data show. (miriam.mukuru@wsj.com)

0711 GMT - Bitcoin stays elevated after reaching a one-week high earlier as U.S. interest-rate rise expectations ease, boosting risky assets. Federal Reserve governor Philip Jefferson said the Fed might need more time to assess the direction of the economy before making any additional policy adjustments. The U.S. nonfarm payrolls report at 1230 GMT will be closely monitored for clues on future policy. Stronger-than-expected jobs data could push Treasury yields and the dollar higher, potentially weakening bitcoin, Zaye Capital Markets analyst Naeem Aslam says in a note. "Softer labor data could reduce expectations for further tightening, weaken yields and improve the environment for renewed [bitcoin] exchange traded fund inflows." Bitcoin rises 1.6% after reaching as high as $86,807 earlier, according to LSEG. (renae.dyer@wsj.com)

0709 GMT - The Swiss franc rises to a two-month high against the euro and a one-week high versus the dollar. The franc is supported by markets scaling back U.S. interest-rate rise expectations and safe-haven flows as the gap between French-German government bond yields widen to a 14-year high on French fiscal concerns. Federal Reserve governor Philip Jefferson said the central bank might need more time to assess the direction of the economy before making any additional policy adjustments, dampening rate-rise bets. Markets are now looking ahead to the U.S. nonfarm payrolls report at 1230 GMT for hints on future policy decisions. The euro falls to as low as 0.9303 francs and the dollar falls to as low as 0.8265 francs.(renae.dyer@wsj.com)

0654 GMT - The spread between French and German 10-year government bond yields hit its highest since 2012, extending Thursday's jump after the French government proposed a 2027 budget containing 43 billion euros in cuts and cost savings. "Bond market developments are concerning," Commerzbank strategists say in a note. Importantly, the widening is no longer concentrated on France, with notable spillovers into other high-debt countries including Italy, Belgium and Greece, they say. The spread between 10-year French OATs and German Bunds hit a high of 149.17 basis points, LSEG data show. (jessica.fleetham@wsj.com)

0652 GMT - The spread between French and German 10-year government bond yields hits its highest since 2012, extending Thursday's jump after the French government proposed a 2027 budget containing 43 billion euros in cuts and cost savings. "Bond market developments are concerning," Commerzbank strategists say in a note. Importantly, the widening is no longer concentrated on France, with notable spillovers into the other high-debt countries including Italy, Belgium and Greece, they say. The spread between 10-year French OATs and German Bunds hits a high of 149.17 bps, LSEG data show.