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

0720 GMT - Bitcoin continues to perform well, remaining comfortably above $80,000, after rising to a three-month high overnight. The cryptocurrency has continued to rally in the wake of last week's U.S. Treasury announcement about increasing buybacks of long-term bonds and President Trump pushing for the passage of the Clarity Act crypto legislation. Short covering, where investors close out earlier bets against an asset as it rises, has helped bitcoin's rally, Charles Schwab's Joe Mazzola says in a note. Bitcoin rises 2.3% to $80,732, having hit as high as $81,237 overnight, LSEG data show. Ether gains 1.4% to $2,509, near the six-month high of $2,545 reached on Saturday. (renae.dyer@wsj.com)

0709 GMT - Eurozone government bond yields decline in opening trade as U.S. Treasury yields stabilize after rising during Asian trade. Oil prices decline even as the Middle East situation is turning more complex after U.S. Treasury Secretary Scott Bessent launched a campaign to isolate Iran and warned countries and companies against making business with the country. Tuesday's eurozone government bond supply comes from Germany which sells 5 billion euros in the September 2028 Schatz. The 10-year Bund yield falls 1.1 basis points to 3.241% and declines are similar in other 10-year bonds, though 10-year Italian government bonds slightly outperform, according to Tradeweb. (emese.bartha@wsj.com)

0655 GMT - The dollar rises to a one-week high against a basket of currencies after Treasury Secretary Scott Bessent announced new sanctions aimed at Iran. Bessent warned that countries and companies that do business with Iran will face retaliation from the U.S. However, he didn't outline any specific steps the U.S. would take against individual countries, including China. The threat of exclusion from the dollar-based financial system stoked speculation that some countries and banks might buy dollars pre-emptively, lifting the dollar, IG analysts say in a note. The DXY dollar index rises to as high as 99.106. (renae.dyer@wsj.com)

0635 GMT - The neutral rate--the level that is neither stimulative nor restrictive to the economy--is one of the key risks to the Japanese government bond market, says Sony Financial Group economist Takayuki Miyajima. If financial conditions stay accommodative even as rate hikes take effect, views on the neutral rate could rise above the 1.50%-1.75% projected by bond market experts, he says. That shift could push the market's terminal rate expectation above the current 2.25% level and lock the 10-year JGB yield firmly above 3%, he adds. The 10-year JGB yield is last up 1 basis point at 2.890%. (megumi.fujikawa@wsj.com)

0613 GMT - One of the biggest risks surrounding the Japanese government bond market remains Prime Minister Sanae Takaichi's expansive fiscal policy, says Sony Financial Group economist Takayuki Miyajima. "As the U.S. government has signaled caution over the weak yen and rising Japanese bond yields, the Takaichi administration is unlikely to push ahead with fiscal expansion while ignoring the markets and Washington," he says. "If that expectation proves wrong, the fiscal risk premium could rise once again, potentially driving [the 10-year JGB] yield well past 3%," he adds. The 10-year JGB yield is last up 1.0 bp at 2.890%. (megumi.fujikawa@wsj.com)

0610 GMT - Goldman Sachs analysts revise their forecast for the Bank of Japan's policy rate, now expecting the Japanese central bank to hike rates in September, rather than in January 2027, as previously expected. "Thereafter, we expect a rate hike in January 2027, assuming confirmation of strong momentum in the 2027 Shunto wage negotiations, and July 2027, leaving the policy rate at 1.75%," they say. The BOJ is becoming increasingly vigilant against the risk of underlying inflation exceeding 2%, which raises the possibility of earlier rate hikes, the GS analysts say. They add, however, that the BOJ is maintaining its stance that monetary policy hasn't fallen behind the curve at this point, citing underlying inflation below 2% as the reason. (emese.bartha@wsj.com)

0603 GMT - The geopolitical escalation adds a new layer of complexity heading into Jackson Hole, Danske Bank's Jesper Fjarstedt says in a note, referring to the Kansas City Fed's annual symposium Thursday through Saturday. Federal Reserve Chairman Kevin Warsh will deliver a speech on Friday, "with consensus expecting him to avoid a definitive policy signal and unlikely to address Treasury's market intervention directly," the senior analyst says. Meanwhile, Treasury Secretary Scott Bessent said Monday that the U.S. is launching a campaign to isolate the Iranian regime and also warned that countries and companies doing business with Iran will face U.S. retaliation. (emese.bartha@wsj.com)

0557 GMT - History suggests the current slump in Australian house prices could stretch to a fall of at least 7-8%, lasting just over a year, says David Bassanese, chief economist at Betashares. But recent government tax changes making investment properties less attractive and very poor affordability will likely result in a larger decline than seen in recent cycles, he adds. The slide could be in the order of 10-12%, Bassanese says. If inflation fails to ease and the Reserve Bank of Australia is required to raise rates and slow economic growth further, then the price decline could be even larger, he adds. (james.glynn@wsj.com; X @JamesGlynnWSJ)

0549 GMT - There was active discussion at the Reserve Bank of Australia's August board meeting about a further tightening of monetary policy, minutes of the gathering show. There were also a number of phrases used at the meeting that in the past have led to policy action within three months, including "upside risks," "for the time being" and "at this meeting," says Ivan Colhoun, consultant at Marex. In addition, there was a specific reference to important additional information available by the next meeting, Colhoun adds. This suggests the September policy meeting is live, but data dependant, he says. (james.glynn@wsj.com; X @JamesGlynnWSJ)

0549 GMT - Any buybacks will increase the U.S. Treasury's risk profile, no matter how they are financed, Commerzbank's Christoph Rieger says in a note. "The cash balance cannot be drawn down to earlier levels in light of the political risks and increased outlays, while the Treasury will soon be facing an interest bill of above $100 billion each month," the head of rates and credit research says. Longer term, the measures thus need to be accompanied by a coherent credible fiscal consolidation plan to keep the market tame, Rieger says. The U.S. Treasury said last week it plans to double its long-end securities buybacks, while reports emerged Monday that the Treasury was considering using its general account as an option to finance the buybacks. (emese.bartha@wsj.com)

0547 GMT - Japan's nominal GDP growth is looking relatively firm around 3%, and that could support a move by the 10-year Japanese government bond yield above 3%, says Sony Financial Group economist Takayuki Miyajima. Miyajima expects the benchmark 10-year JGB yield to fluctuate near 3% for the time being, compared with 2.890% on Tuesday. However, even if it moves past 3%, the 10-year yield is unlikely to stay there for long, as the economy is expected to slow later in the year. Because the Bank of Japan is expected to raise interest rates in the near term, fears that the central bank is falling behind on inflation are easing, which should also help put a ceiling on long-term yields, he adds.(megumi.fujikawa@wsj.com)

0538 GMT - Thirty-year U.S. Treasurys remain vulnerable to further selling pressure at current levels, even as yields are currently trading below the recent 19-year high, J.P. Morgan strategists say in a note. "The 30-year bond remains vulnerable to further selling pressure while it is still trading cheaper than the 5.14-5.20% key resistance area," they say. A rally through the latter would derail the bearish near-term trend momentum, the strategists say. The 30-year Treasury yield rose to a 19-year high of 5.337% last week and last trades 0.8 basis point higher at 5.238%, according to Tradeweb.