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

1026 GMT - The dollar could remain firm in the near term but the longer-term outlook is becoming less favorable for the currency, Societe Generale's Kit Juckes says in a note. Elevated oil prices, robust U.S. economic data and a more risk-averse global environment support the dollar, he says. Further out, November's midterm elections make it difficult for President Trump to maintain accommodative fiscal policies that have supported the economy and the dollar, he says. "The world's major savings economies are saving less than they once did, while the U.S. is having to pay more to attract the investment it needs." The DXY dollar index rises 0.1% to 101.101. (renae.dyer@wsj.com)

1017 GMT - The cost of insuring high-yield euro credit against default rises to its highest in more than five months as market sentiment weakens due to renewed U.S.-Iran tensions. President Trump rejected Iran's plan to reopen the Strait of Hormuz, raising concerns about prolonged oil supply disruptions. Brent crude rises 3.7% to $108.18 a barrel. The iTraxx Europe Crossover index of euro high-yield credit default swaps rises 1 basis point to 298bps, the highest since April 8, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)By Emese Bartha The selloff in U.S. Treasurys and European government bonds deepened in European mid-morning on Monday, pushing 10-year Treasury and German Bund yields to multiyear highs as yet another setback in efforts to resolve the Middle East conflict drove 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.

The 10-year U.S. Treasury yield rose to 5.234%, the highest since mid-2007, while the 10-year German Bund yield increased to 3.649%, the highest since mid-2009, according to Tradeweb. The 30-year Treasury yield touched 5.542%, a level unseen since 2004.

"The bond markets remain in a precarious state," Commerzbank rates strategist Rainer Guntermann said in a note.

In the eurozone, government bond supply will be significant, including from the eurozone's four largest issuers--France, Germany, Italy and Spain--, which could hinder any potential rally.

"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.

Yields on 10-year U.K. government bonds rose 2.1 basis points to 5.411%.

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, said Patrick Munnelly, market strategist at Tickmill Group. "This is no longer just a U.S. story," he said.

"Higher oil, sticky inflation expectations, resilient activity and heavy sovereign financing needs are combining to push global discount rates higher," he said.

Oil prices rose, with front-month November Brent crude up 3.3% at $107.71 a 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.

"Weak economic data no longer necessarily means lower interest rates," Alain Krief, global chief investment officer at Edmond de Rothschild Asset Management, said in a note. "Favorable economic data is no longer necessarily good news for risky assets if it further delays monetary easing. It is this asymmetry that we must now consider in our investment decisions."

High yields are leaving investors cautious, although there could be scope for some retracement.

"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.

This week could bring some respite to Treasurys, according to Citi's 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.

J.P. Morgan strategists stick to their bearish view on U.S. Treasury duration given the upcoming U.S. labor-market report on Friday and technical factors. However, they said their bearish bias wasn't as strong as it has been in recent weeks. Write to Emese Bartha at emese.bartha@wsj.com

0944 GMT - The diplomatic treatment of the Trump-Xi meeting signals near-term stability, BofA Securities says. The bank noted that President Trump offered "notably warm" treatment of China's Xi Jinping, personally receiving the Chinese leader planeside upon his arrival for a state visit. China also announced the loan of two giant pandas to Zoo Atlanta. "It is consistent with our prediction that panda diplomacy will be an easy win, when disagreements in trade and investment negotiations are hard to overcome," BofA writes in a research note. This provides an "important stabilizing channel" as trade talks continue, it adds. (tracy.qu@wsj.com)

0909 GMT - Morgan Stanley upgrades its view on French government bonds in light of their recent yield rise, switching to a neutral position in the expectation that yields are unlikely to increase much more. "We turn neutral on France and do not chase further underperformance as valuations look cheap across different metrics," the rates strategist says. The 10-year French OAT-German Bund yield spread is currently at 110 basis points, close to the 114 basis points it reached last week, the widest since 2012. (emese.bartha@wsj.com)

0903 GMT - The U.K. government's new Help to Buy program could boost new-home sales in England by more than 15% over the next two years, Jefferies analysts say in a note. The country's new-home market has been one of Europe's weakest over the past 12 months, but the "Your First Home" plan could significantly reverse that trend, Jefferies says. MJ Gleeson and Persimmon are each up 15%, while Barratt Redrow and Taylor Wimpey are each up 14%. (anthony.orunagoriainoff@dowjones.com)

0843 GMT - Singapore's manufacturing output is likely to grow unevenly as strong demand for artificial-intelligence hardware supports some segments while rising costs and supply disruptions weigh on others, DBS senior economist Chua Han Teng says in a note. Factory output rose 15.4% on year in August, accelerating from July's revised 6.9% expansion, largely on AI-related demand. Petrochemical firms, meanwhile, face a shortage of feedstock due to the closure of the Strait of Hormuz, he adds.(amanda.lee@wsj.com)

0837 GMT - The Polish zloty's recent underperformance looks justified as Poland contends with security risks, political frictions and a central bank that is potentially behind the curve in raising interest rates, Commerzbank's Tatha Ghose says in a note. Poland Prime Minister Donald Tusk has warned Russia could launch attacks against Poland while President Karol Nawrocki could block a windfall tax bill on fuel companies which would be help lower prices. Polish inflation has accelerated the most month-on-month among peers over the past quarter and the central bank is slow to accept this, Ghose says. The euro rises 0.2% to 4.3770 zloty, having reached 4.4004 Thursday, its highest level since January 2024, according to LSEG. (renae.dyer@wsj.com)

0831 GMT - Credit valuations and equity prices could face pressure under an environment of higher interest rates, Tickmill Group's Patrick Munnelly says in a note. Middle East tensions and the accelerating oil prices are causing markets to expect three or more interest-rate increases by each of the major central banks over the coming year, LSEG data show. "If energy prices remain elevated, central banks have less room to ease and more reason to keep inflation risks front and centre." Brent crude climbs 2.7% to $107.14 a barrel. (miriam.mukuru@wsj.com)By Emese Bartha U.S. Treasurys rose in early European trade while German 10-year Bund yields hit their highest since 2009 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.

Treasury yields hovered close to their recent peaks, with the 10-year Treasury yield up 1.7 basis points at 5.197%, having hit a multiyear high of 5.230% on Friday, according to Tradeweb. The 10-year German Bund yield rose to 3.631%, its highest since mid-2009, according to Tradeweb.

"The bond markets remain in a precarious state," Commerzbank rates strategist Rainer Guntermann said in a note.

In the eurozone, government bond supply will be significant, including from the eurozone's four largest issuers--France, Germany, Italy and Spain--, which could hinder any potential rally.

"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.

Yields on 10-year U.K. government bonds rose 0.6 basis points to 5.395%.

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, said Patrick Munnelly, market strategist at Tickmill Group. "This is no longer just a U.S. story," he said.

"Higher oil, sticky inflation expectations, resilient activity and heavy sovereign financing needs are combining to push global discount rates higher," he said.

The stalling pushed oil prices higher, with front-month Brent crude for November rising 2.5% to $106.93 a 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.

"Weak economic data no longer necessarily means lower interest rates," Alain Krief, global chief investment officer at Edmond de Rothschild Asset Management, said in a note. "Favorable economic data is no longer necessarily good news for risky assets if it further delays monetary easing. It is this asymmetry that we must now consider in our investment decisions."

High yields are leaving investors cautious, although there could be scope for some retracement.

"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.

This week could bring some respite to Treasurys, according to Citi's 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.