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

0545 GMT - U.S. Treasury yields decline in Asian trade, reversing Thursday's increases that saw the 30-year yield hit a 19-year high of 5.244%, according to Tradeweb data. The reversal comes amid fresh signs of efforts for peace in the Middle East. U.S. officials said Hamas and other Palestinian militant groups had agreed to a plan that, if followed, would see the groups disarm and lose power in the Gaza Strip as long as Israel withdraws from the enclave. Falling oil prices also help yields move lower. With Brent last trading 1.7% lower at $87.49 a barrel, the 10-year Treasury yield falls 1.4 basis points to 4.648%, while the 30-year yield declines 1.7 basis points to 5.190%. (emese.bartha@wsj.com)

0537 GMT - The U.S. Treasury is expected to leave nominal coupon and floating rate note issuance sizes unchanged for a 10th consecutive quarter, says HSBC U.S. rates strategist Dhiraj Narula in a note. The Treasury will release details of its borrowing plans at its quarterly refunding announcement on Aug. 5. HSBC also expects the Treasury to maintain its forward guidance that it 'anticipates maintaining nominal coupon and FRN auction sizes for at least the next several quarters', he says. HSBC now expects increases in issuance sizes to begin in May 2027, compared with its previous forecast of February 2027. (emese.bartha@wsj.com)

0535 GMT - The Bank of Japan is likely to stick to Mizuho Securities' baseline scenario of hiking interest rates every six months, which would put its next rate increase at its December meeting, says economist Yusuke Matsuo. While BOJ communication suggests the central bank could potentially move forward its next rate hike to October, a December move remains the most likely, he notes. Sticking to a six-month cadence also offers a political advantage for the BOJ, as garnering support from PM Takaichi would likely be easier, Matsuo adds. Takaichi is generally seen to be reluctant to support rapid monetary tightening. (megumi.fujikawa@wsj.com)

0535 GMT - China's July purchasing managers index data back the case for policy stimulus, say ANZ Research's Vicky Xiao Zhou and Zhaopeng Xing in a note. "The recent pullback of major commodity prices appears to have deteriorated the output price outlook, prompting firms to scale back purchases and production plans," they say. Nonmanufacturing activity also weakened significantly in July, with notably softer demand signaling weaker underlying activity at the start of 3Q, they add. The strategists see a potential window for policy stimulus in September, with the window widening if August data continue to disappoint. Possible measures include deploying around 2 trillion yuan of unused local government bond quotas, they say. (megan.cheah@wsj.com)

0532 GMT - ​The substantial rise in Treasury yields across maturities is likely the most critical factor arguing against any policy moves towards raising coupon [note, bond] supply, or even simply shifting forward guidance, HSBC U.S. rates strategist Dhiraj Narula says in a note. The Treasury will release details of its borrowing plans for August-October at its quarterly refunding announcement on Aug. 5. "Long-dated rates sit at multi-decade highs, and we expect policymakers to remain wary of shifts that would drive up term premium and raise borrowing costs further," he says. When maturity extension does ultimately take place, HSBC expects increases to be concentrated in the front-end and 'belly', or the intermediate segment, Narula says. (emese.bartha@wsj.com)

0527 GMT - Eurozone government bond yield spreads remain near recent highs amid persistent geopolitical tensions and elevated oil prices, with the usual seasonal tightening yet to materialize, Societe Generale rates strategists say in a note. While lower government bond issuance in August--when supply is seasonally lower--could provide some support, "we do not expect a meaningful narrowing in spreads," they say. Hawkish central banks, coupled with expectations of renewed supply and increased political uncertainty after the summer, are likely to keep investors cautious, they say. The strategists continue to favor the front end of eurozone government bond curves where carry remains the most attractive, they say. (emese.bartha@wsj.com)

0520 GMT - Despite three dissents, the Federal Reserve's decision on Wednesday to remain on hold reinforces Societe Generale strategists' view that policy uncertainty and inflation risks will continue to weigh on the long end of the curve, they say in a note. "While investors push out the timing of future hikes, higher real yields and firmer inflation expectations suggest markets are increasingly questioning the Fed's willingness to act," the strategists say. Regarding view on positioning, the strategists have moved from a flattening bias to a neutral curve stance and favor inflation breakevens as a hedge against rising inflation risk premia, they say. (emese.bartha@wsj.com)

0517 GMT - One of Macquarie Group's takeaways or inferences from Federal Reserve Chairman Kevin Warsh's press conference on Wednesday is that "Warsh is trying to intentionally delay raising the Fed's policy rate," says global FX and rate strategist Thierry Wizman in a note. Warsh is using talk as a substitute for action, and to veil or deflect from his inherent 'dovishness', Wizman says. "This would square with our view...that Warsh is 'Trump's twin', but with an evolved vocabulary," Wizman says.