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

0816 GMT - The Trump-Xi summit's two-month trade truce extension is a "main disappointment" of the meeting, BofA Securities says in a research note. The outcome, which falls short of BofA's expectation of a one-year extension, "appears more closely aligned with the U.S. position," the bank says. China didn't specify the duration of the extended timeframe in its official statement, it notes. The extended truce would allow the U.S. to assess China's implementation of the existing agreement, particularly on rare-earth supplies, BofA says. Additionally, the two sides may simply need more time to negotiate. Potential top-level negotiations at the APEC meeting in Shenzhen and the G-20 summit in Miami offer opportunities for the countries to reach a deal before the year-end, BofA adds. (tracy.qu@wsj.com)

0814 GMT - The jump in oil prices is turning into a policy rate problem, Tickmill Group's Patrick Munnelly says in a research note. Higher oil prices, sticky inflation expectations, resilient activity and heavy sovereign financing needs are pushing global discount rates higher, Munnelly says. If energy prices remain elevated, central banks will have less room to ease and more reason to keep inflation risks front and center, he says. The average yield on a global bond gauge has now climbed above 4% for the first time since 2007, underlining the scale of the global rates reset, he notes. "This is no longer just a U.S. story," he writes. (sherry.qin@wsj.com)

0745 GMT - Gold prices drop as rising oil prices reinforce expectations that the Federal Reserve might raise interest rates further next month, a move that would put pressure on the nonyielding metal. In early European trading, New York gold futures are down 3% to $4,189.40 a troy ounce. Meanwhile, the U.S. dollar index is up 0.2% at 101.14, making dollar-denominated commodities more expensive for overseas buyers. Market watchers expect rising yields and a strong dollar to keep the macro backdrop challenging for gold. However, "it is also worth noting that much of the selling occurred during Asian hours, potentially pointing to profit-taking by Chinese investors ahead of the Golden Week holiday starting Thursday," analysts at Saxo Bank say. Traders are currently pricing in a 70% probability of a rate hike in October. (giulia.petroni@wsj.com)

0725 GMT - The euro could stabilize against the dollar this week as its recent decline looks somewhat overdone, ING's Francesco Pesole says in a note. "We have a preference for the euro to inch back higher and stabilize just above $1.140, but we aren't blind to the lingering downside risks." Among the risks are French government bonds, where a further widening of yield spreads could start to impact the euro, he says. Meanwhile, eurozone inflation data on Friday could show headline inflation accelerated on energy prices in September but core inflation increased only modestly, confirming no sign of second-round effects. Still, the European Central Bank should continue to favor further interest-rate rises, he says. The euro falls 0.2% to $1.1374. (renae.dyer@wsj.com)

0723 GMT - Yields on U.K. government bonds, or gilts, edge higher and remain at elevated levels after President Trump rejected Iran's ceasefire proposal on Friday, reviving Middle East tensions. The absence of a breakthrough in the U.S.-Iran conflict is driving up oil prices and adding to inflation concerns. Front-month Brent crude rises 2.3% to $106.7 a barrel. Ten-year gilt yields rise 0.9 basis points to 5.399%, Tradeweb data show, having climbed to a one-week high of 5.414% on Friday. (miriam.mukuru@wsj.com)

0710 GMT - Eurozone government bond yields open slightly lower but they potentially face a challenging week as oil prices remain elevated and issuance will be heavy. High oil prices increase prospects of further interest-rate rises, while supply is due from Belgium on Monday, Netherlands and Italy on Tuesday, Germany on Wednesday and Spain and France on Thursday. "The bond markets remain in a precarious state," Commerzbank rates strategist Rainer Guntermann says in a note. "Rebounding oil prices, [European Central Bank President Christine] Lagarde's testimony today, and this week's data and supply could exacerbate the current nervousness," he says. The 10-year German Bund declines 0.2 basis points to 3.619%, according to Tradeweb. (emese.bartha@wsj.com)

0704 GMT - Investors raise their bets on the Bank of England increasing interest rates in November as oil prices advance. The absence of a breakthrough in the U.S.-Iran conflict is causing oil prices to climb, raising concerns about high inflation. Brent crude rises 2.3% to $106.7 a barrel. Markets price in an 81% chance of a BOE rate rise at the next policy meeting in November, up from a 62% probability a week ago, LSEG data show. (miriam.mukuru@wsj.com)

0653 GMT - Bitcoin falls as renewed geopolitical concerns and expectations for further U.S. interest-rate rises dampen appetite for risky assets. U.S. officials said President Trump rejected a proposal for a seven-day ceasefire and told aides he expects to resume bombing Iran after the November midterms, The Wall Street Journal reports. For bitcoin, the Middle East conflict, higher oil prices and inflation concerns push yields higher and pressure speculative and long-duration assets, Zaye Capital Markets analyst Naeem Aslam says in a note. Recent strong U.S. data support the case for further rate rises, also weighing on bitcoin, he says. Bitcoin falls 1.7% to $83,108, having earlier hit a one-week low of $82,773, LSEG data show. (renae.dyer@wsj.com)

0640 GMT - The dollar rises as hopes for U.S.-Iran diplomacy fade, lifting oil prices and driving investors towards safe-haven assets. U.S. officials said President Trump rejected a proposal for a seven-day ceasefire and told aides he expects to resume bombing Iran after the November midterms, WSJ reports. Higher oil prices support the dollar as the U.S. is a net oil exporter. The dollar is also lifted by expectations that the Federal Reserve could raise interest rates further. The U.S. nonfarm payrolls report on Friday will prove key for these expectations. The DXY dollar index rises 0.2% to 101.181. (renae.dyer@wsj.com)By Emese Bartha U.S. Treasury yields rose in Asian trade on Monday as yet another setback in efforts to resolve the Middle East conflict pushed oil prices higher.

Peace negotiators are pressing Iran to make a concession on its nuclear program to revive ceasefire talks with the U.S. after President Trump rejected Iran's truce proposal.

"Unfortunately we are in a one factor world right now with oil prices impacting rates and rates being the main driver of all asset classes," said Mohit Kumar, global economist at Jefferies, in a note.

The stalling pushed oil prices higher, with front-month Brent rising 3.4% to $107.91 per barrel. Higher oil prices keep inflationary pressures intense which in turn reinforces market expectations of further interest rate hikes by the Federal Reserve. Money markets currently price in a 68% probability of a 25-basis-point rate raise by the Fed in October.

"In our view the Treasury market is going through a light buyer's strike," Citi strategist Jason Williams said in a note.

Strong purchasing managers data last week and hawkish Federal Reserve speeches are "likely keeping buyers at bay," he said.

Treasury yields hovered close to their recent multiyear highs, with the 10-year Treasury yield up 3 basis points at 5.210%, according to Tradeweb.

This week could bring some respite to Treasurys, according to Williams, given the lack of issuance. "So far in 2026, Treasurys have tended to sell off more so on auction weeks than no supply weeks," he said.