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

0600 GMT - JGBs were mixed in the afternoon Tokyo session after the Japanese Finance Ministry's auction of 40-year sovereign debt. The bid-to-cover ratio stood at 3.10, higher than the 2.82 at the prior 40-year JGB sale in July, indicating solid demand. However, JGB prices may have been somewhat weighed by rising oil prices that lead to higher inflation in Japan and could prompt a fast pace of BOJ rate increases. The two-year JGB yield was down 0.5 bps at 1.960%, the 10-year yield was little changed at 3.085%, and the 30-year yield was unchanged at 4.170%. (ronnie.harui@wsj.com)

0554 GMT - The Reserve Bank of Australia Governor Michele Bullock is clearly keeping the door open for an interest rate rise in November. At her press conference following the central bank's decision to hike rates, she pointed the finger at the Middle East conflict, saying, "it has made us all poorer...it is making things much worse." Still, she was quick to add that domestic demand is also too high.(james.glynn@wsj.com; @JamesGlynnWSJ)

0534 GMT - U.S. Treasury yields rise in Asia trade but remain slightly below the fresh multiyear peaks reached Monday. President Trump's rejection of Iran's proposal for demands to reopen the Strait of Hormuz triggered the latest selloff, pushing oil prices higher, even as more oil tankers cross the waterway. The 10-year Treasury yield rises 1.3 basis points on the day to 5.254%, hovering close to Monday's peak of 5.274%--the highest level since June 2007, according to Tradeweb. The 30-year Treasury yield is up 0.4 basis points at 5.565%, below Monday's 5.583%, a level last seen in 2002. (emese.bartha@wsj.com)

0529 GMT - As geopolitical pressures and uncertainties persist, First Abu Dhabi Bank anticipates that the dominant macro risk this week will again be the Middle East conflict and its impact on energy markets, inflation expectations and the global rates outlook. Markets will also be on watch for any Federal Reserve communication that might help to clarify the rates path going forward, says chief economist Simon Ballard. "The latter would now be particularly important for portfolio position given the (12-0) unanimous nature of FOMC's rate hike decision earlier this month," he says in a note. (emese.bartha@wsj.com)

0520 GMT - The rise in the 10-year U.S. Treasury yields to approximately 5.25% reflects higher oil prices and a strong U.S. economy more than AI debt issuance or fiscal concerns, according to Capital Economics' James Reilly. Capital Economics sees the Treasury selloff as overdone, and continues to forecast that the 10-year yield will fall this year and drop all the way to 4.25% by the end of 2027 as the Fed fails to tighten by as much as investors are discounting. "The selloff mainly seems to reflect changes in near-term expectations," he says, adding that these rate expectations have largely been driven by energy prices. The other key driver has been investors pricing in stronger U.S. economic growth and more persistent inflation. (emese.bartha@wsj.com)

0512 GMT - ​Emerging market fixed income has not been immune to the global bond yield sell-off, but it has outperformed ​developed markets since August, says ​Guillaume Tresca​ at Generali Investments in a note. Emerging market sovereign spreads have also been broadly stable, the senior emerging market strategist says. "This outperformance confirms our long-held view of the resilience of EM countries, which is supported by structural macroeconomic improvements​," he says. In addition, EM central banks are ahead in the hiking cycle, thus providing a degree of anchoring at the long end​, he says. This resilience can persist as long as the U.S. dollar does not strengthen meaningfully​, Tresca says. (emese.bartha@wsj.com)

0507 GMT - The Federal Reserve is expected to hike interest rates two more times after the September raise, to be delivered in December and March, though markets continue to be pricing in a more aggressive cycle, Morgan Stanley rates strategists say in a note. "Market uncertainty around the Fed, growth, corporate issuance, and oil are all contributing to rising expectations of monetary tightening over the next 12 months," they say. The strategists do not see the Fed delivering that much tightening, as the fundamental drivers of the Fed path will only become more visible later in the year, they say. Money markets currently price in 100 basis points of rate hikes over the next 12 months, according to LSEG. (emese.bartha@wsj.com)

0500 GMT - Australian Treasurer Jim Chalmers says the Reserve Bank of Australia's latest rate rise is squarely due to the war in the Middle East. "Australian workers didn't choose this war, but they are paying a hefty price for it. The war has been a disaster for the global economy," Chalmers said in a statement after the central bank delivered yet another rate hike, citing inflation pressures. Market participants are pricing in multiple rate rises in every major advanced economy, Chalmers added.