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

0656 GMT - The dollar recovers slightly as oil prices rise after President Trump said he is not seeking an extension of the U.S. ceasefire with Iran which expired Monday. Trump also threatened to bomb Oman if the Gulf nation "gets in the way." The news provides some support to the dollar due to its safe-haven role and America's position as a net energy exporter. It also increases the prospect of the Federal Reserve raising interest rates. However, markets are no longer fully pricing a rate rise by year-end after recent weak data. The recent scaling back of rate-rise bets sent the DXY dollar index to a 10-week low of 99.294 Monday. The index is last up 0.1% at 99.673. (renae.dyer@wsj.com)

0642 GMT - There's been a rush of good news for the New Zealand economy. For starters, inflation expectations have deflated like a balloon, meaning the Reserve Bank of New Zealand can move to the sidelines next year, pausing interest rate increases, says Jarrod Kerr, chief economist at Kiwibank. Recent positive manufacturing activity numbers for July were further good news, he adds. New Zealand's manufacturing index is above the long-run average and while the New Zealand dollar remains weak, that strength is likely to continue, he says. Still, in the interim the RBNZ will remain on track to hike the official cash rate to 3% soon enough, he adds. (james.glynn@wsj.com; X @JamesGlynnWSJ)

0637 GMT - Sterling falls modestly after data showed the U.K. unemployment rate unexpectedly held steady and the number of payrolled employees fell in the three months to June. The unemployment rate remained at 4.9%, above the 4.8% forecast by economists in a WSJ survey. Payrolled employees fell 86,000 compared to a year ago. Average earnings, excluding bonuses, rose 3.5% in the quarter, against an expected 3.4%. The labor market has been loosening for some time which supports the case for the Bank of England to keep interest rates steady for the rest of the year, Aberdeen's Felix Feather says in a note. Sterling falls 0.1% to $1.3519 after the data, from $1.3537 beforehand. The euro rises 0.1% to 0.8554 pounds from 0.8547. (renae.dyer@wsj.com)

0629 GMT - The DXY edged higher toward 99.7 points in Asia. Fading expectations for U.S. Federal Reserve interest rate hikes have recently weighed on the U.S. dollar. Markets are now pricing a 37% chance of a September hike, down from roughly 70% in late July, says Samara Hammoud, FX strategist at CBA. Still, international capital data for June this week showed that foreigners continue to buy U.S. assets at a very high rate, she adds. CBA expects the U.S. exceptionalism narrative--especially the AI buildup--to continue to attract equity and foreign direct investment into the U.S. and push up the U.S. dollar this year. (james.glynn@wsj.com; X @JamesGlynnWSJ)

0629 GMT - Nordic markets are seen opening slightly lower, with IG calling the OMXS30 down 0.4% at around 3253. Stock prices turned lower Monday in both Europe and the U.S., where the weaker U.S. retail sales figure from Friday reinforced a gloomier mood, SEB economist Marcus Widen writes. Most equity markets in Asia are also lower. "Long-term bond yields continue their upward journey and we see levels we have not seen for many, many years," Widen says. The rise in yields comes despite the market scaling back Fed interest-rate expectations as new signs of a cooler economy emerge. Oil prices continue to rise after the fragile ceasefire between the U.S. and Iran ended yesterday. OMXS30 closed at 3266.30, OMXN40 at 2711.24 and OBX at 2015.86. (dominic.chopping@wsj.com)

0603 GMT - The Australian dollar likely has scope to rise further against its U.S. counterpart, based on technical charts, says Quek Ser Leang of UOB's Global Economics & Markets Research in a report. The Australian dollar clearly broke above the major resistance zone of US$0.7075-US$0.7090 on Monday, the senior technical strategist notes. However, "it remains to be seen if any advance can reach the next major resistance at US$0.7200," the strategist says, noting Monday's breakout didn't lead to follow-through usually associated with a clear break of key resistance levels. The Australian dollar is 0.1% lower at US$0.7097, LSEG data show. (ronnie.harui@wsj.com)

0557 GMT - The German Finance Agency is set to defy rising global government bond yields and go ahead with a planned syndicated tap of the existing August 2056 Bund. Commerzbank strategists expect a tap size of around 3.5 billion euros. The announcement of the transaction came Monday, somewhat earlier than expected by many in the market. In the eurozone, usually Finland is the first country to deliver a post-summer syndicated bond issue. "In primary [market], the DFA [German Finance Agency] surprised by announcing a syndicated 30-year tap already for this week," Commerzbank's Christoph Rieger says in a note. (emese.bartha@wsj.com)

0549 GMT - Rising energy prices amid resilient macro data amplify headwinds for bond markets after key levels were taken out, Commerzbank's Christoph Rieger says in a note. "While the market has repeatedly been bought before around current levels it is difficult to see a swift change of dynamics in the current environment," the head of rates and credit research says. In late Monday trade, the 10-year Bund yield hit 3.219%, the highest since 2011, according to LSEG data. Commerzbank opts for a defensive stance for now, preferring steepeners. "They can work in both a bullish as well as a moderately bearish setting as central banks need to account for tightening financing conditions from historically high long-end yields," Rieger says. (emese.bartha@wsj.com)

0542 GMT - The 30-year U.S. Treasury yield extends its recent rise, climbing to 5.326%, the highest level since 2007, according to Tradeweb data. The 10-year yield also rises, hitting 4.742% in Asian trade, the highest level since end-July, Tradeweb data show. Drivers include investor concerns over U.S. government spending as well as a lack of progress toward a resolution in the Middle East, which is keeping oil prices elevated, with Brent oil last trading at $91.47 per barrel, up 0.66% on the day. (emese.bartha@wsj.com)

0530 GMT - Japan could curb further yen weakness without repeated currency interventions if it signals a commitment to fiscal discipline and an appropriate pace of Bank of Japan rate hikes, says Sumitomo Mitsui DS Asset Management strategist Masahiro Ichikawa. While government currency intervention is typically unlikely to change the broader market trajectory, the recent intervention proved effective because it successfully halted the yen's rapid, disorderly slide toward the 164 level against the dollar, Ichikawa adds. The dollar is last trading at 159.65 yen.(megumi.fujikawa@wsj.com)

0523 GMT - The U.S. two- to 10-year Treasury yield curve has scope to steepen further in the next three months, potentially to 70 basis points, DZ Bank analysts say in a note. "While we expect the long-end to continue trending sideways, we see room for short-end yields to go lower," they say. The two- to 10-year curve has significantly steepened over the past two weeks as investors have scaled back their expectations of Federal Reserve rate hikes, the analysts say. The steepening was driven mainly by two-year yields, which have fallen, while 10-year yields remained mostly rangebound. The spread is currently around 55 basis points, with the two-year Treasury yield trading at 4.193% and the 10-year yield trading at 4.741%, according to Tradeweb. (emese.bartha@wsj.com)

0517 GMT - JGB yields are likely to keep facing upward pressure unless supply-demand conditions and persistent inflation fears improve, says Sony Financial Group economist Takayuki Miyajima. Expectations of foreign exchange intervention and the government's potential tolerance for Bank of Japan interest-rate hikes could ease inflation risks. However, "in the short term, geopolitical friction in the Middle East and uncertainty surrounding monetary and fiscal policies are weighing on market sentiment," Miyajima says. The 10-year JGB yield last stood at 2.930% after hitting a fresh 30-year high of 2.945% earlier in the session.