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

1048 GMT - 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)

1040 GMT - 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)

1011 GMT - 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)

0956 GMT - 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)

0943 GMT - 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)

0935 GMT - 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)

0919 GMT - 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. (miriam.mukuru@wsj.com)

0916 GMT - AI investment is among a number of factors that are accelerating a rise in long-term bond yields, BlackRock Investment Institute says in a note. AI adds to the impact of prolonged supply shocks and heavy government borrowing, it says. "The structural forces behind higher bond yields have been building for several years but intensified this year." In this environment, government bonds provide less ballast--implying that they act as less of a stabilizing asset--but provide more income, "expanding the opportunity for durable income," the asset manager says. (emese.bartha@wsj.com)

0854 GMT - Federal Reserve Chair Kevin Warsh's approach to monetary policy could prove detrimental to the dollar in the medium to long term, Commerzbank's Antje Praefcke says in a note. Warsh hinted last week that the market will do the work for him by pricing in higher long-term interest rates, she says. This suggests financing conditions will tighten without having to raise rates, dampening inflation. However, this is a "dangerous tactic" as a central bank's credibility depends on how decisively it acts against price risks, she says. If inflation exceeds the target for five years and a rate rise fails to materialize, the market will punish the currency, she says. The DXY dollar index rises 0.1% to 100.014.(renae.dyer@wsj.com)

0818 GMT - The steepening of the U.S. 2-30-year Treasury yield curve after last week's Federal Reserve meeting reflects growing inflation worries and uncertainty over how the Fed will respond, BlackRock Investment Institute says in a note. This isn't anything new but a continuation of thebroader macro regime over several years, it says. "The fastest AI investment buildout in history is unfolding in a world shaped by supply scarcity, where energy constraints, tight labor markets and geopolitical fragmentation are shifting the focus from efficiency to resilience." Meanwhile, governments and hyperscalers are drawing on the same pool of savings, intensifying competition for capital and these forces are pushing investors to demand higher returns to lend for longer, it says. (emese.bartha@wsj.com)

0812 GMT - The March 2032 gilt could record improved performance going forward as the supply of new short-dated gilts is expected to slow, RBC Capital Markets strategists say in a note ahead of an auction of the bond. The Debt Management Office is due to sell 4.25 billion pounds in the March 2032 gilt at 0900 GMT. The pace of short-term gilt sales by the DMO could decelerate in the second half of the fiscal year 2027 as the agency has already completed 12 of its 20 planned auctions of short-dated gilts, the strategists say. This should be supportive for U.K. 5-year government bonds, they say. The March 2032 gilt yield last trades up 2.1 basis points at 4.601%, Tradeweb data show. (miriam.mukuru@wsj.com)

0803 GMT - The euro could struggle to rise against the dollar as it looks modestly overvalued, ING's Francesco Pesole says in a note. ING's short-term fair model suggests the euro versus the dollar is overvalued by about 0.5%-1.0%, he says. The euro needs a favorable shift in short-term rate differentials to take another leap higher, driven by a repricing of expectations for U.S. interest-rate rises, he says. "Our baseline for this week is for euro-dollar to edge back below $1.150 on a more supported dollar, but unless U.S. jobs figures come in particularly hot, we don't see a return to $1.140 in the near term." U.S. nonfarm payrolls data are due Friday. The euro trades flat at $1.1511.