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

0851 ET - Treasury yields decline ahead of U.S. labor data and as Treasury Secretary Bessent indicates in a CNBC interview that a deal with Iran to reopen the Strait of Hormuz could come "today or tomorrow." Oil prices extend their decline, with WTI at $78 a barrel. The June trade deficit of $73.3 billion is wider than expected in a WSJ consensus. The JOLTS report at 10 a.m. ET is expected to show job openings slipping to 7.4 million in June from May's 7.6 million. The WSJ Dollar Index is steady, as the dollar strengthens 0.2% against the yen following the recent pro-yen intervention. The 10-year yield is at 4.665%, down from 4.684% yesterday. The two-year slips to 4.219% from 4.255%. (paulo.trevisani@wsj.com; @ptrevisani)

0838 ET - Record-low water levels along Germany's Rhine river could shave 0.3 percentage points off the country's economic growth this year, Carsten Brzeski at ING says in a note. Water levels along the Rhine--which carries around 80% of Germany's inland waterway freight--have fallen to a record low. This threatens supply chains and industrial production, as ships are operating with sharply reduced loads, he says. Research from the Kiel Institute found that the 2018 drought cut inland shipping by about 25%, reduced industrial output by roughly 1%, and shaved around 0.3 percentage points off German GDP growth. "The risk is high that this time around, the economic impact will be larger," although the country should avoid recession, Brzeski says. (don.forbes@wsj.com)

0732 ET - Sterling could fall slightly over the remainder of the year if the Bank of England refrains from raising interest rates and the U.K. economy weakens, Metzler analyst Leon Ferdinand Bost says in a note. "This is even more true against the euro if the European Central Bank raises interest rates again in September and the eurozone economy continues to perform solidly, as we expect." However, fiscal concerns shouldn't prove a structural burden for the cu8rrency, he says. Prime Minister Andy Burnham probably won't overstep the fiscal rules, instead delivering a gradual reduction in the budget deficit, he says. Metzler expects the euro to rise to 0.88 pounds by year-end from 0.8464 currently. (renae.dyer@wsj.com)

0708 ET - Yields on U.K. government bonds rise as oil prices rise. Reports that a vessel was struck in the Strait of Hormuz contribute to higher oil prices. Iran also on Monday said there were no planned talks with the U.S., after President Trump's announcement that the U.S. and Iran were due to hold negotiations. Uncertainty is high surrounding the direction of the Middle East conflict and the full impact of the war. Ten-year gilt yields rise 2 basis points to last trade at 4.972%, Tradeweb data show. (miriam.mukuru@wsj.com)

0648 ET - Companies will need earnings growth which outpaces the current rise in bond yields in order for their stocks to perform well, BlackRock Investment Institute says in a note. With government-bond yields rising, higher borrowing costs "raise the bar for equities," it says. This could mean investors will need to be more selective when deciding which stocks to buy. "We expect greater dispersion across companies, strengthening the case for active investing," it says. (emese.bartha@wsj.com)

0648 ET - Supply of new euro-denominated senior preferred bonds slowed in July due to a summer slump, ING's Marine Leleux says in a note. Senior preferred bonds are debt securities issued by banks which combine bond features and equity-like features. French issuers led the supply of new senior preferred bonds in July, issuing 2 billion euros ($2.3 billion), Leleux says. European banks supplied a total of 3.5 billion euros in senior preferred bonds over July, she says. (miriam.mukuru@wsj.com)

0640 ET - Middle Eastern investors are turning toward domestic priorities amid the conflict in the region, reducing financing sources for governments outside the region, BlackRock Investment Institute says in a note. "Greater sovereign borrowing and persistent fiscal deficits, alongside a shift in Middle Eastern investment toward domestic priorities, have reduced capital available for overseas investment and further intensified competition for capital," it says. Scarcity-driven inflation, amplified by the Middle East energy and commodity shock, has driven a sharp repricing of markets' Federal Reserve rate expectations from easing to tightening, prompting a global rise in bond yields, BlackRock says. Market uncertainty about the Fed's reaction function under the new Chairman Kevin Warsh has also pushed the term premium higher, the asset manager says. (emese.bartha@wsj.com)

0611 ET - India's central bank is likely to keep its policy repo rate at 5.25% on Wednesday, according to 12 out of 13 economists polled by The Wall Street Journal. "Rising inflation has reduced the scope for policymakers to remain on the sidelines, while the renewed weakness in the rupee will be a factor too," said Shilan Shah of Capital Economics, who expects the Reserve Bank of India to raise its repo rate by 25 bps to 5.50%. However, HSBC economists believe that India is in a "sweet spot" given better growth, inflation and external finances data recently, and that RBI may prefer to see firmer inflation prints before making a move. (kimberley.kao@wsj.com)

0556 ET - Taiwan's July exports likely remained strong on continued AI-related demand. Exports likely gained 40.2% on year last month, after rising 40.3% in June, according to a WSJ poll of six economists. As Big Tech continue to raise their AI investment, Taiwan's hardware makers, led by TSMC, have been the biggest beneficiaries. Thanks to its robust tech exports, the island's economy grew 12.92% in 2Q, topping market expectations. Still, economists caution that the recent tech sell-off is causing jitters and it is unclear how long the tech capital expenditure cycle will continue. DBS economists think that the AI-driven export supercycle has peaked and Taiwan could see a more normalized growth trajectory. The trade data are due Friday. (sherry.qin@wsj.com)

0543 ET - The recent joint intervention by U.S. and Japanese authorities to strengthen the yen might not have a lasting impact, MUFG Bank's Lee Hardman says in a note. "While joint intervention may prove more effective at helping to provide support for the yen in the near term, we still believe that it can only buy time." There needs to be a change in fundamentals to encourage a sustainable reversal of the yen's weakening trend, he says. More U.S. pressure on Japan to accelerate interest-rate rises as part of the joint intervention arrangement would be an important step, he says. The dollar rises 0.4% to 157.86 yen after reaching a three-month low of 155.21 Monday, LSEG data show. (renae.dyer@wsj.com)

0535 ET - U.S. Treasury yields and the dollar rise in European trade as oil prices increase. Iran on Monday said there were no planned talks with the U.S., creating uncertainty after the U.S. recently cancelled planned attacks against Iran in order to allow discussions to proceed. Discrepancy between U.S. and Iranian messaging could sustain safe-haven demand and keep oil prices supported, feeding inflation concerns, says BankPro's Paolo Broccardo in a note. Geopolitical uncertainty is providing the dollar with underlying support, he says. The 10-year Treasury yield rises 2.2 basis points to 4.705%, according to Tradeweb. The DXY dollar index increases 0.1% to 100.013. (emese.bartha@wsj.com)

0519 ET - The cost of insuring euro-denominated credit against default stays steady due to uncertainty around the Middle East conflict. The U.S. cancelled planned attacks against Iran and said the two nations would hold talks to end the conflict. However, Iran on Monday said the were no planned talks with the U.S., creating uncertainty around the possible end to the conflict. The iTraxx Europe Main index of euro investment-grade credit default swaps is unchanged at 52 basis points, S&P Global Market Intelligence data show.