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

0957 GMT - Credit investors rank higher-for-longer energy costs as the number one risk to credit markets, a Bank of America survey shows. Continuing Middle East tensions have led investors to adjust their expectations on energy prices, the BofA says, releasing its credit investor survey for September. Brent crude falls 1.9% to last trade at $101.8 a barrel, having risen above $109.0 a barrel last week as Middle East conflict widened. (miriam.mukuru@wsj.com)

0940 GMT - German state election results could threaten pro-growth reforms planned by the coalition government of Friedrich Merz, Berenberg's Holger Schmieding says in a note. Merz is fighting for his political survival after his CDU party on Sunday failed to clear the 5% threshold to enter the Mecklenburg-Western Pomerania parliament. While the national coalition with the SPD is likely to hold, it may implement somewhat softened reforms, Schmieding says. Indeed, the SPD's state premier in Mecklenburg-Western Pomerania had campaigned against an element of the pension reform. Expect noisy debates, both between the two governing parties and within them, Schmieding says. "The risk that they could get so out of hand that they could shatter the federal government in Berlin is not zero. But it remains low." (edward.frankl@wsj.com)

0934 GMT - Although house prices in the U.K. rose 0.7% in August according to Rightmove's House Price Index, it is too soon to tell if this will last in the long term, OSB Group director Adrian Moloney says. Since buyers are still searching for homes, sellers must keep prices realistic as mortgage rates creep higher, he says. Balancing high asking prices with expensive monthly loans is proving tough for many households, especially first-time buyers and those renewing their mortgages, Moloney says. "The case for working with brokers who understand these situations properly is stronger than ever," he says. Barratt Redrow is down 1.9%, followed by Persimmon, down 1.7% and Crest Nicholson, down 1.4%.(anthony.orunagoriainoff@dowjones.com)

0913 GMT - U.S. Treasury yields ease as lower oil prices temper inflation concerns and limit the dollar's upside, FFA Kings' Fadi Al Kurdi says in a note. "Hopes of diplomatic progress in the Middle East have contributed to the decline in crude, making this week's U.N. General Assembly an important catalyst," he says. "Credible progress toward de-escalation could drag oil lower, ease pressure on yields and reduce safe-haven demand for the dollar," he says. The two-year Treasury yield falls 2 basis points to 4.721%, while the 10-year yield declines 3.7 basis points to 4.957%, according to Tradeweb. The DXY dollar index is stable at 100.262. (emese.bartha@wsj.com)

0907 GMT - Malaysia's 2027 budget will likely be a pre-election budget on a compressed timeline, with greater focus on cost-of-living relief and household support, Kenanga economists say in a note. The government is expected to maintain gradual fiscal consolidation while prioritizing spending on AI, semiconductors, digitalization and infrastructure. The economists expect the fiscal deficit to narrow to 3.5% of GDP in 2027 from an estimated 3.8% in 2026, supported by economic growth and lower subsidies. Malaysia is unlikely to introduce broad-based tax reforms, with efforts focused instead on improving tax compliance and collection, they say. The budget is expected to target 2027 GDP growth of 4.5%-5.5%, driven by domestic demand, structural reforms and projects under the five-year development plan, they add. (yingxian.wong@wsj.com)

0904 GMT - The U.S. dollar has scope to rise further in the near term if markets assign a higher probability of the Federal Reserve raising interest rates again next month, ING's Francesco Pesole says in a note. Stronger upcoming U.S. data and further gains in energy prices would potentially encourage markets to add to the 13 basis points of tightening currently priced for next month, he says. Meanwhile, President Trump is due to meet Chinese President Xi Jinping in Washington on Thursday. "While this shouldn't be a major market event, positive trade headlines could provide some support to the dollar," Pesole says. The DXY dollar index rises 0.1% to 100.277, having reached a seven-week high of 100.564 Friday. (renae.dyer@wsj.com)

0853 GMT - The cost of default protection for U.S. dollar investment-grade credit stays steady as market sentiment improves. Falling oil prices have calmed concerns about inflation and contributed to improved risk sentiment. In addition, optimism around the U.S.-China talks has boosted tech sector assets. The CDX North America IG index for dollar investment-grade credit default swaps is steady at 51 basis points, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)

0848 GMT - The German Finance Agency is expected to keep its funding plans for 1Q unchanged from the preliminary plans when it announces a review on Thursday, the Investment Institute by UniCredit's Francesco Maria Di Bella says in a note. "Germany will publish its 4Q 2026 guidelines, which, in our view, will broadly confirm the annual funding plan published last December," the fixed income strategists says. In December last year, the German Finance Agency penciled in 59 billion euros in government bond issuance, excluding green bonds, and also planned 47 billion euros in treasury bill issuance. (emese.bartha@wsj.com)

0833 GMT - High U.K. government bond yields or gilt yields could pile pressure on public sector finances ahead of the budget on October 28, Morningstar DBRS' Julia Specht says in a note. The gilt market has faced structural shifts, including reduced demand for long-dated gilts, increased corporate debt supply, and higher sensitivity to fiscal risks, which have led to rising yields, she says. "With the government's fiscal headroom already limited, elevated yields could constrain policy flexibility ahead of key budget decisions." (miriam.mukuru@wsj.com)

0757 GMT - The prospect of further currency interventions to prop up the Japanese yen should help curtail its losses after Friday's Bank of Japan policy decision, MUFG Bank's Lee Hardman says in a note. Reports that the BOJ conducted a rate check signal policymakers are prepared to intervene again, he says. "The rate check should help to dampen market expectations for how much the yen will be allowed to weaken in the near-term as the dollar-yen moves closer to the 160.00-level." The BOJ raised rates on Friday as expected but the communications failed to meet aggressive market expectations for future rate increases, he says. The dollar rises 0.2% to 157.21 yen after reaching a two-week high of 158.05 Friday, according to LSEG.(renae.dyer@wsj.com)

0734 GMT - The losses suffered by Germany's ruling Christian Democratic Union in state elections should have a limited impact on the euro, ING's Francesco Pesole says in a note. The results of the election mostly reflect local dynamics rather than a verdict on Chancellor Friedrich Merz's reforms, he says. Still, delivering that agenda could become more challenging with CDU support falling and the political landscape becoming increasingly fragmented, he says. "These developments add some clouds to the euro, but are not enough to displace rate differentials and oil as its primary drivers." The euro falls 0.1% to $1.1474.(renae.dyer@wsj.com)

0713 GMT - Yields on U.K. government bonds, or gilts, fall as oil prices decline, calming inflation concerns. Brent crude is down 1.9% at $101.87 a barrel. Focus is also on the U.K. public finances data for August due to be released on Tuesday. The data is expected to show the level of government borrowing ahead of the budget on October 28. Ten-year gilt yields fall 7.4 basis points to last trade at 5.235%, Tradeweb data show.