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

0750 GMT - The possibility of the Bank of England increasing interest rates in November remains due to inflation concerns as oil prices are still fairly elevated, Tickmill Group's Patrick Munnelly says in a note. The recent decline in energy prices hasn't been sufficient to alter market expectations of a BOE rate rise in November, he says. Investors price a 66% chance of a BOE rate increase at the November meeting, unchanged from last week, LSEG data show. "Unless Middle East diplomacy produces a material and sustained fall in energy prices, the market is likely to keep some probability of a November hike embedded," Munnelly says. (miriam.mukuru@wsj.com)

0746 GMT - The 10-year German Bund yield rises after flash estimate purchasing managers data came in stronger than expected. The German composite PMI index, a measure of private-sector activity, was 53.8 in September, well above analyst expectations of 51.6 in The Wall Street Journal's poll. A reading above 50 signals expansion in activity. The 10-year Bund yield last trades at 3.456%, up 0.7 basis points on the day, having traded at 3.448%, down 0.1 basis point before the release of the data, according to Tradeweb. (emese.bartha@wsj.com)

0742 GMT - Singapore inflation risks remain tilted to the upside, keeping the next central bank meeting live, ING economists say. Core inflation strengthened in August, and ING reckons it will accelerate further in the coming months as U.S.-Iran conflict uncertainty will likely keep global energy prices elevated. That boosts the risk of further pass-through into Singapore goods and services prices, ING's Deepali Bhargava says. A severe El Niño weather shock could also push up imported food costs--an acute pain point given Singapore's heavy reliance on imports. Robust AI-related investment activity could meanwhile stoke inflation on the services front. MAS surprised markets by tightening slightly in July, and ING doesn't rule out a further modest move in October. (fabiana.negrinochoa@wsj.com)

0730 GMT - The 10-year French OAT yield pares some of its falls after flash estimate purchasing managers data. The French flash composite PMI index came in at 51.2 in September, well above analyst expectations of 48.6 in The Wall Street Journal's poll. The 10-year OAT yield last trades at 4.480%, down 0.8 basis points on the day, compared with 4.474% beforehand, according to Tradeweb data. The euro shows limited reaction, continuing to hover just above an earlier eight-week low of $1.1420 against a firmer dollar. (emese.bartha@wsj.com)

0721 GMT - Yields on U.K. government bonds, or gilts, drop as oil prices retreat, easing concerns about inflation. Brent crude falls 0.8% to $98.45 a barrel due to prospects of a U.S.-Iran deal after Kyodo News on Tuesday reported that Iran said it would reopen the Strait of Hormuz within seven days if the U.S. lifts its blockade. Ten-year gilt yields fall 1.4 basis points to last trade at 5.209%, Tradeweb data show. (miriam.mukuru@wsj.com)

0717 GMT - The most likely outcome of the Trump-Xi meeting this week is lots of nice statements with little meaningful action, says Danske Bank's Allan von Mehren. There may be dialogue on AI, but the bar for cooperation is high as there is no trust on security--and the AI race is central to that. Xi will likely express China's willingness to work for a Middle East peace deal, which Trump will probably welcome. The two sides will also likely extend the truce on U.S. tech sanctions and Chinese rare-earths curbs. It's positive that the leaders meet to keep relations as stable as possible, von Mehren says, but at the end of the day anti-China sentiment in Washington is strong and the aim is to contain Beijing--even if Trump likes to be friends with Xi. (fabiana.negrinochoa@wsj.com)

0712 GMT - Interest-rate differentials between the U.S. and eurozone have shifted in favor of the dollar against the euro as energy prices ease, Commerzbank's Thu Lan Nguyen says in a note. "This reflects the market's view that inflation and monetary policy in the euro-area are more heavily influenced by energy prices than in the U.S." That assessment seems reasonable as recent U.S. inflation suggest price pressures have become more broad-based whereas the long-feared second-round effects in the euro area have so far remained limited, she says. The euro falls to an eight-week low of $1.1421, LSEG data show. (renae.dyer@wsj.com)

0710 GMT - Bitcoin rises as risk sentiment improves on hopes for diplomacy in the Middle East conflict. President Trump said on Tuesday that U.S. officials had a "very good meeting" with Iran on the sidelines of the United Nations General Assembly in New York. Saudi Arabia, meanwhile, began running tests on its East-West pipeline on Tuesday in a step toward restoring flows as soon as this week after the pipeline was damaged by attacks earlier this month, the Wall Street Journal reports. Bitcoin rises 0.3% to $86,502, having reached its highest level since late January on Monday at $87,315, LSEG data show. (renae.dyer@wsj.com)

0640 GMT - The dollar rises to an almost eight-week high against a basket of currencies, driven by expectations the Federal Reserve could raise interest rates further. The market assigns a 53% chance of another Fed rate rise in October and prices 78 basis points by September 2027, LSEG data show. These expectations are overriding an easing of oil prices on hopes for a de-escalation in the Middle East conflict, which is usually negative for the currency given America's position as a net oil exporter. The DXY dollar index rises to a high of 100.763. (renae.dyer@wsj.com)

0639 GMT - U.S. Treasury yields and eurozone government bond yields fall in European opening trade as oil prices decline on the prospect of a deal between the U.S. and Iran. "Markets continue to err on the side of new momentum for diplomacy between the U.S. and Iran on breaking the energy-choking deadlock," analysts at KBC Bank said in a note. Investors await key input from flash estimate purchasing managers data for September. The 10-year U.S. Treasury yield falls 2.2 basis points to 4.944%, while the 10-year German Bund yield declines 1.3 basis pionts to 3.436%, according to Tradeweb. (emese.bartha@wsj.com)

0551 GMT - Bond markets could open in a reasonably good mood in Europe amid the prospect of diplomatic progress between the U.S. and Iran. This, along with Saudi Arabia moving to restart its East-West pipeline, has helped oil prices fall and reduce the upward pressure on bond yields. "Geopolitics remains center stage for markets," Jefferies' Mohit Kumar says in a note. "There is increased optimism that the U.S. and Iran may be moving towards some form of an agreement," the global economist says. (emese.bartha@wsj.com)

0542 GMT - Bonds are once again fulfilling multiple roles simultaneously, apoBank's Clemens Berendt says in a note. Bonds are generating ongoing income, diversifying risk, and they are also adding stability to a portfolio, the lead portfolio manager says. The outlook for bond investors in 2026 is significantly more favorable than in the historically weak year for bond markets in 2022 as current yield levels offer long-term investors the opportunity to lock in attractive portfolio returns for the years to come, he says.