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

0900 ET - The recent selloff in French government bonds due to fiscal worries makes U.K. assets look comparatively safe, supporting sterling versus the euro, Ebury's Enrique Diaz-Alvarez says in a note. "The pound also continues to be well supported by resilient domestic data, with last week's revised GDP figures showing that the U.K. economy grew at a faster pace than initially anticipated in the second quarter." The October U.K. budget is a key risk for sterling and U.K. government bonds but French developments dominate, he says. The euro falls 0.3% to 0.8469 pounds after earlier reaching an 11-week low of 0.8456, according to LSEG. (renae.dyer@wsj.com)

0848 ET - The cost of insuring high-yield euro credit against default rises to a six-month high amid concerns about France's fiscal situation and after Spain announced snap elections, adding a layer of uncertainty to the eurozone outlook. French bond yields and their spreads against German peers soared to multiyear highs last week after the French government presented a budget proposal. Markets calm a little on Monday but French and Spanish government-bond yields remain elevated. "Europe's political and fiscal backdrop is becoming a more prominent market concern," Tickmill's Patrick Munnelly says in a note. The iTraxx Europe Crossover index of euro high-yield credit default swaps rises 4 basis points to 305bps, S&P Global Market Intelligence data show. (jessica.fleetham@wsj.com)

0821 ET - Friday's weaker-than-expected U.S. nonfarm payrolls report, upcoming Federal Reserve meeting minutes and G-7 measures to release energy supplies could temper the dollar's rise but not reverse it sharply, HSBC's Paul Mackel says in a note. The data argue against the Fed raising rates this month but this was largely priced beforehand and the Fed's focus is more on inflation, he says. The Fed minutes Wednesday could explain why officials voted unanimously to raise rates in September while the G-7's decision to release 100 million barrels of crude and diesel over four months alleviates concern over a proposed U.S. diesel-export ban, he says. The DXY dollar index rises 0.3% to 102.225 after reaching a near 18-month high of 102.535 overnight. (renae.dyer@wsj.com)

0814 ET - Leverage is leaving bitcoin at an orderly pace which should leave the market on firmer ground, says ARP Digital's Yusuf Fakhro. Open interest in Bitcoin derivatives fell by roughly 49,000 BTC over the week-one of the largest drops in two years--but this wasn't accompanied by a price crash, he says. "This tells you that traders were calmly taking profits after a strong September, not being liquidated in a panic," he says. Fakhro says high Treasury yields are the only barrier to another breakout. Bitcoin is 0.3% higher at $86,113. (joseph.wilkins@wsj.com)

0803 ET - The euro's potential to extend its current losses should prove limited if German government bonds remain largely unaffected by the selloff in French bonds on fiscal concerns, Commerzbank's Thu Lan Nguyen says in a note. "One of the euro's key support factors is the safe-haven status of German government bonds," she says. As long as investors have access to a euro-denominated safe asset, worries that the French budget will struggle to get approved remain a problem for French bonds rather than for the euro itself, she says. The euro falls 0.4% to $1.1214 after reaching a 16-month low of $1.1160 earlier, LSEG data show. (renae.dyer@wsj.com)

0717 ET - Spain's snap election is expected to produce a rightward shift, though this is unlikely to materially change the country's economic outlook, Harry Chambers at Capital Economics says in a note. A potential PP-Vox coalition could bring a stricter approach to immigration--a key growth driver for Spain--though restrictions are likely to be limited, he says. Fiscal policy could also loosen. However, proposed tax cuts should be accompanied by spending cuts, keeping fiscal expansion contained. "As a result, we suspect that the bond markets will take the election in their stride," Chambers says, noting that Spanish bonds are expected to hold up relatively well to recent market turmoil. "We expect [Spain] to continue to outperform, keeping the public debt ratio on a downward trend." (don.forbes@wsj.com)

0647 ET - Spanish voters head to the polls for a snap election, and while voting intentions may shift they currently suggest a right-wing PP-Vox absolute majority, J.P.Morgan's Mariana Monteiro says in a note. Growth implications from that outcome would likely be modest overall, with upside and downside risks broadly offsetting each other, she says. A PP-Vox government could have greater emphasis on spending restraint, tax reductions, and potentially higher defense spending. But they also may present a tougher stance on immigration, contributing to slower-than-anticipated labor-force growth, Monteiro says. "Heightened political fragmentation and policy inertia over recent years may have weighed on private investment, although any aggregate effect was likely overshadowed by powerful growth drivers," she says, including immigration expansion and EU-funded investment. (edward.frankl@wsj.com)

0637 ET - The European Central Bank is unlikely to trigger its Transmission Protection Instrument to support France anytime soon, Joerg Kraemer at Commerzbank says in a note. French government bonds are under severe pressure, with the 10-year spread over German Bunds reaching 140 basis points, its highest since 2012. Still, while France could technically qualify for the ECB's TPI, the central bank is unlikely to want to relieve pressure on French policymakers just yet, Kraemer says. Also, without facing a sovereign debt crisis, the move would conflict with the tool's purpose of addressing disorderly market dynamics. Instead, the ECB could first signal willingness to intervene, or redirect maturing PEPP proceeds toward French bonds, the analyst says. A more lasting solution would be fiscal consolidation to stop debt rising faster than nominal GDP, he says. (don.forbes@wsj.com)

0626 ET - Bitcoin's recent rally marks a return to the debasement trade that began with Treasury Secretary Scott Bessent's intervention in Treasury markets, Capital.com's Kyle Rodda says. "That fundamental driver reveals a lot about Bitcoin's function and why it's remained relatively well supported recently," he says. "It's a trade on US policy largesse, an anti-fiat hedge and overall a portfolio diversifier." Rodda adds that bitcoin's prospects are looking increasingly positive and the lows of the cycle may have passed. Bitcoin is 0.3% higher at $86,046. (joseph.wilkins@wsj.com)

0616 ET - Stocks will be buoyed by earnings strength and resilient growth even as higher borrowing costs prompt a weakening in equities sentiment, JPMorgan's Mislav Matejka writes. "Equities got hurt by the spike in bond yields, but we do not think this will persist," Matejka writes. Bond yields will likely pull back from recent highs, while the Federal Reserve's tightening confirmed the strength of the economy. Corporates will continue to meet elevated earnings expectations and inflation will not run out of control, Matejka says. Though French political headwinds will remain, the CAC 40 has already weakened significantly, suggesting the risk is already priced in by markets, they say. The CAC 40 falls 1.1% and is down 4.1% for the year. (josephmichael.stonor@wsj.com)

0550 ET - Snap elections in Spain come at a delicate moment for Europe, writes JPMorgan's Mariana Monteiro. Prime Minister Pedro Sanchez called an early vote for parliament to be held at the end of next month, a move that comes amid protests across Spanish cities against rising housing costs. A change in government to a right-wing coalition would likely have only a limited impact on the trajectory of the Spanish economy and on Madrid's relationship with Brussels, Monteiro says. But the news injects further uncertainty into Europe's macro landscape, she says. Monteiro points to "concerns about political stability in Germany, uncertainty around the French electoral outlook and, more broadly, the implications of higher sovereign yields for debt sustainability." (joshua.kirby@wsj.com; @joshualeokirby)

0549 ET - Stock markets have absorbed rising bond yields, but valuations face a reality check over the next two earnings seasons, Panmure Liberum's Joachim Klement and Francisca Reis write. Earnings resilience and economic growth have so far protected European companies from rising inflation and a jump in government bond yields in the U.S. and Europe, the strategists say. But the upcoming period of third-quarter earnings reports, as well as companies' 2027 guidance in January, will bring the corporate impact of higher borrowing costs into focus, they say. The Stoxx 600 rises 0.2% Monday, and is up 6.8% so far this year.