0652 GMT - Treasury yields rise while the dollar trades steady as negotiations to reopen the Strait of Hormuz appear to have stalled, lifting oil prices. President Trump said he will demand war reparations from Iran after Tehran called for compensation for the destruction caused by the conflict. Markets are pricing an increased chance that the Federal Reserve will raise interest rates in September in response to higher oil prices with LSEG data showing the probability back above 50% after being scaled back briefly following Friday's weaker-than-expected U.S. nonfarm payrolls report. The 10-year Treasury yield is up 2.3 basis points at 4.721%, Tradeweb data show. The DXY dollar index is flat at 99.834 with investors cautious ahead of Wednesday's U.S. inflation data.