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

0926 GMT - AI-related activity has contributed to the continued resilience of the British economy, Capital Economics' Paul Dales says in a note. GDP growth was 0.4% on month in July, with businesses reporting stronger activity related to AI and cloud computing. That contributed to a 2.4% rise in IT and communications output within the services sector and a 5.2% gain in the manufacture of computer, electronic and optical products within the industrial sector. "AI could prove to be a longer-lasted support to real activity," Dales says. Even if GDP were flat in both August and September, GDP growth would still rise 0.6% in the third quarter, though higher energy prices and borrowing costs will soon take a bigger toll on activity, he says. (edward.frankl@wsj.com)

0903 GMT - The headline strength in U.K. GDP growth masks a weaker picture for households, KPMG U.K.'s Yael Selfin says. GDP grew 0.4% on month in July, but momentum is set to slow in August and September amid higher energy and borrowing costs, she says. Consumer-facing services contracted in July, as retail and hospitality activity fell after earlier growth in the summer, she says. "Higher energy and fuel prices are likely to place further pressure on household budgets, while elevated mortgage rates will continue to weigh on housing activity and wider consumer spending." However, activity in sectors aligned with AI and technology investment bode well for the government's ambition to raise growth momentum ahead of the budget announcement next month, Selfin says. (edward.frankl@wsj.com)

0847 GMT - Sweden's general election on Sunday is expected to be a close race as the gap between the governing right-wing bloc and left-centre opposition has narrowed in recent polls, Nordea analyst Joel Lundh writes. However, for financial markets and the Swedish krona, the election should be a non-event, he adds. "When reviewing historical election results, we find very little to no evidence in the election outcome, no matter if the government changes, impacting financial variables in the short term." (dominic.chopping@wsj.com)

0817 GMT - The latest U.K. GDP data show that economic activity remains resilient despite challenges from the Middle East conflict and high oil prices, Moneyfarm's Richard Flax says in a note. Monthly GDP rose 0.4% in July, stronger than the consensus forecast by economists in a WSJ survey of flat growth. "Strength in technology-related activity helped offset weakness elsewhere," he says. Investors remain uncertain whether the growth can be sustained in the coming months, considering rising energy costs, supply-chain disruptions, and geopolitical tensions, however. "The bigger question now is whether this stronger-than-expected performance can be sustained through the remainder of the year and translate into a broader improvement in business confidence and investment," Flax says. (miriam.mukuru@wsj.com)

0740 GMT - Yields on U.K. government bonds, or gilts, fall but remain close to multi-decade highs reached on Thursday. Gilt yields advanced Thursday, taking 10-year gilt yields to a 19-year high due to rising oil prices and stronger-than-expected U.S. producer price index data. Investors await U.S. consumer-price data at 1230 GMT which could potentially add to prospects of the U.S. Federal Reserve increasing interest rates on Sept. 16. Meanwhile, U.K. GDP data for July was better-than-expected, although there are doubts whether this growth can be sustained given geopolitical tensions and U.K. fiscal pressures. Ten-year gilt yields fall 1 basis point to 5.360%, having hit 5.381%, the highest level since 2007, on Thursday, LSEG data show. (miriam.mukuru@wsj.com)

0735 GMT - Rising real long-term yields in Japan are undercutting corporate capital expenditure, says Daiwa Securities analyst Eiji Kinouchi. "Combined with recent yen appreciation, this creates a heightened risk of an economic downturn," he says. April-June growth data shows capital spending declined for a second straight quarter on an on-quarter basis. The yen's appreciation may reflect growing recession fears, as weaker domestic demand reduces imports and pushes the trade balance toward a surplus, Kinouchi adds. "The current mix of declining capex and a stronger yen presents a worrying sign." The 10-year Japanese government bond yield last stood at 2.980%, while the dollar was last trading at 154.20 yen. (megumi.fujikawa@wsj.com)

0731 GMT - Sterling edges higher after better-than-expected U.K. GDP data for July. Monthly GDP grew by 0.4% in July, stronger than the consensus forecast by economists in WSJ poll of flat growth. Annual GDP rose 1.6% in July, above the consensus forecast of 1.1% growth. Sterling rises 0.1% to $1.3522, up from around $1.3510 before the data. Euro falls 0.1% to 0.8582 pounds, down from 0.8591 beforehand. (miriam.mukuru@wsj.com)

0720 GMT - Swedish voters head to the polls on Sunday, and while the left-wing opposition party looks to have a slight lead, there is no doubt that the momentum has turned in favor of the incumbent center-right bloc lately, SEB senior economist Johan Javeus writes. "The latest poll gives the opposition a lead of 2.6 percentage points, but that difference is within the statistical margin of error." Javeus notes that on election night in 2022, exit polls pointed to victory for the left, but then things slowly swung during the night in favor of the center-right parties and the election was not completely decided until all votes had been counted a few days later. (dominic.chopping@wsj.com)

0713 GMT - Eurozone government bond yields open higher, taking the 10-year German Bund yield to a new 15-year high. Yields extend their rise in line with U.S. Treasurys as the selloff in global fixed income markets continues. Drivers are the same: further rising oil prices, inflation fears, a somewhat underwhelming U.S. bond buyback auction, and a still-resilient eurozone economy. "Rise in oil prices would feed into inflation and central bank policies," Jefferies' Mohit Kumar says in a note. The 10-year Bund yield hits a high of 3.515%, according to LSEG. (emese.bartha@wsj.com)

0657 GMT - Bitcoin trades steady, keeping at lower levels well below the $80,000 mark, as investors focus on U.S. consumer-price index data due at 1230 GMT. The data could increase the possibility of the U.S. Federal Reserve raising interest rates at the Sept. 16 policy meeting. U.S. producer price data on Thursday came in stronger than expected while oil prices continued to rise amid Middle East tensions. Money markets price in a 67% chance of a rate rise next week, LSEG data show. Bitcoin is steady at $77,214, having hit a 10-day low of $76,529 in overnight trade, LSEG data show. (miriam.mukuru@wsj.com)

0657 GMT - Japan's wholesale price growth is expected to remain high due to a rise in oil prices amid concerns over the prolonged Middle East conflict, says NLI Research Institute's Masayuki Sato. "Strong AI-related demand is driving up semiconductor memory prices, while the impact of Middle East tensions is spilling over into plastic products--both pushing up domestic corporate goods prices," he says. "Food and beverage prices may also see faster growth moving forward, as companies become more willing to pass on higher costs alongside rising raw material expenses stemming from elevated import prices." Bank of Japan data released Friday showed corporate goods prices rose 7.6% in August from a year earlier, marking the third straight month of over 7% growth. (megumi.fujikawa@wsj.com)

0651 GMT - The dollar trades steady as investors await U.S. consumer-price inflation data at 1230 GMT, the final key data ahead of the Federal Reserve's meeting next week. The dollar rose Thursday, driven by rising oil prices and stronger-than-expected producer-price inflation figures increasing prospects of an interest-rate rise. However, even if Friday's inflation figures are strong, Fed policymakers could point to moderating core inflation and opt to hold rates steady next week, Commerzbank's Michael Pfister says. "Even if today's figure sends a clear signal, this does not necessarily mean that the Fed (and thus the dollar) will ultimately pick it up," he says. The DXY dollar index is steady at 99.051, having risen to 99.199 on Thursday.