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

1016 GMT - The question everyone is wondering is whether Federal Reserve Chair Kevin Warsh will use his Jackson Hole speech to provide more clarity on monetary policy, Franklin Templeton Fixed Income's Sonal Desai says in a note. "I think he will not," the CIO says. Warsh has abandoned forward guidance and wants financial markets to assess the economic outlook rather than take their cues from a Fed that signals its moves ahead of time, Desai says. However, Warsh has faced pushback from analysts who want him to clarify the Fed's 'reaction function,' namely what data it will react to and how, Desai says. "But I don't think Warsh will do this, because it would be the same as providing forward guidance." (emese.bartha@wsj.com)

0947 GMT - The climb in the Ifo business-climate index to its highest in a year is a "huge surprise", KfW Research economist Sebastian Wanke says. "After all, despite all the challenges, this marks the fourth consecutive increase," he says. The economy is therefore showing resilience to the war in Iran and more recently the low water levels on the River Rhine. The increase in manufacturing orders had already hinted at this, and Ifo survey's data suggests the positive trend is continuing, Wanke says.KfW Research now expects GDP growth of 1.1% for this year and 1.5% for 2027, 0.4 and 0.2 percentage points higher, respectively, than in the last forecast in May, he says. (edward.frankl@wsj.com)

0946 GMT - Eurozone bond yields remain caught between higher energy prices and the limited evidence of the second-round effects required to justify the amount of tightening now embedded in market pricing, Mizuho's Evelyne Gomez-Liechti says in a note. Neither Tuesday's German Ifo data nor the German Schatz auction should materially change the broader European Central Bank debate, the multi-asset strategist says. The 10-year Bund yield falls 2.0 basis points to 3.231%, according to Tradeweb. (emese.bartha@wsj.com)

0942 GMT - Recent resilience suggests the German economy is on track for its best GDP growth performance since the 1.9% of 2022, ING's Carsten Brzeski says in a note. The Ifo business-climate index rose to 88.8 in August from 86.6 in July, and data showed second-quarter growth was revised upward to 0.3% from 0.2%. "While it's still too early to call this a self-sustained economic recovery, growth above potential in the first and second quarters of the year, together with four consecutive months of increasing sentiment, are promising," he says. Still, the short-term outlook includes high energy prices, alongside low water levels stymieing river transport for German industry. However, order books have started to recover in recent months, pointing to some positive momentum, Brzeski says. (edward.frankl@wsj.com)

0942 GMT - The Hungarian forint falls against the euro as analysts widely expect the country's central bank to cut interest rates by 25 basis points to 5.50% in a decision at 1200 GMT, Commerzbank's Tatha Ghose says in a note. The communication will be more important than the decision itself, he says. The forint could stay under pressure if the central bank signals further rate cuts as soon as September, he says. However, the central bank is likely to sound more cautious on policy easing, he says. "A more conditional tone will reassure investors that [Hungary's central bank] may soon ditch the rate-cutting cycle if inflation risks were to stay elevated. " The euro rises 0.5% to 362.45 forints. (renae.dyer@wsj.com)

0938 GMT - U.S. Treasury yields edge lower in European mid-morning trade while the dollar is steady as investors digest the Treasury's decision to increase long-end debt buybacks and its plan to economically isolate Iran. "Financial markets are heading into a heavy run of catalysts following their reaction to Treasury Secretary Scott Bessent's moves on long-dated Treasury buybacks and the latest sanctions against Iran," says the The Revacy Fund's Zaheer Anwari in a note. Treasury yields remain at elevated levels as markets await the next round of U.S. economic data, he says. The 10-year Treasury yield falls 1.6 basis points to 4.886%. The DXY index is stable at 99.028. (emese.bartha@wsj.com)

0929 GMT - Concerns about the prospect of dollar debasement in the wake of the U.S. Treasury's decision to buy back more long-term bonds might be overdone, MUFG Bank analysts say in a note. Dollar debasement involves investors seeking alternative assets due to the concerns about the currency being devalued. "While fiscal concerns, Treasury buybacks and record debt levels continue to support the debasement narrative, historical experience suggests caution in extrapolating to U.S. asset selloff," the analysts say. As long as yields remain elevated, the more likely outcome is that the dollar stabilizes, they say. The DXY dollar index trades steady at 99.016, having reached a three-month low of 98.557 on Thursday.(renae.dyer@wsj.com)

0928 GMT - This year's Federal Reserve Jackson Hole symposium is particularly keenly awaited, Julius Baer's David Kohl and Dario Messi say in a note. Fed Chairman Kevin Warsh's speech will come after the central bank's communication in July offered investors little clarity on the policy outlook, they say. "Historically, Jackson Hole has only occasionally been a major market mover, but when it has been, the impulses have often been sizeable and long-lasting," they say. The event, running between Thursday and Saturday, comes at a declicate time for bond markets, which are still digesting last week's signal from the surprise Treasury buy-back announcement, Kohl and Messi say. (emese.bartha@wsj.com)

0923 GMT - Asian equities closed mixed Tuesday and oil dropped. Investors were cautious ahead of the Jackson Hole economic symposium as well as coming Nvidia earnings. South Korea's Kospi rebounded from earlier losses to end 0.7% higher, Hong Kong's Hang Seng Index ended flat and China's Shanghai Composite gained 0.2%. Front-month West Texas Intermediate crude oil futures fell 2.0% to $83.33 a barrel, while front-month Brent crude oil futures were 1.8% lower at $90.49 a barrel. Bitcoin topped $80,000 for the first time since May and was last 1.2% higher at $79,853.78 as fresh investor interest in the so-called debasement trade brought growing support for the cryptocurrency as a dollar hedge. Spot gold was relatively stable after the recent rally, last shedding 0.5% to $4,627.82 a troy ounce (sherry.qin@wsj.com)

0851 GMT - The cost of euro credit default protection declines as markets stabilize ahead of Nvidia's earnings report due on Wednesday. The tech giant's earnings are likely to influence market sentiment around AI investments, Tickmill Group's Patrick Munnelly says in a note. "The market's tolerance for anything less than a flawless report is extremely limited," he says. The iTraxx Europe Crossover index of euro high-yield credit default swaps falls 1 basis point to 248bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)

0850 GMT - Rising competition for funds by AI companies and governments is causing investors to demand higher yields on their investments, Nuveen's Laura Cooper says in a note. Many of the long-dated bond yields of major economies are close to multiyear highs as investors absorb increased bond issuance both from corporates and sovereigns, she says. Concerns about fiscal sustainability are also contributing to rising government bond yields, Cooper says. "As existing debt rolls over, higher borrowing costs feed into interest expense, putting more pressure on deficits and requiring more issuance." Ten-year German Bund yields climb 0.1 basis point to 3.253%, staying close to a 15-year high of 3.275% reached last week, Tradeweb data show. (miriam.mukuru@wsj.com)

0847 GMT - Sterling rises to a one-week high against the euro, recovering to levels seen before the U.S. Treasury announced increased buybacks of long-term securities. This signals that the positive premium in the euro has been scaled back, ING's Francesco Pesole says in a note. "If calm is indeed restored in the bond market, expect the pair to return to tracking short-term rate differentials closely." Sterling is likely to turn lower against the euro in coming months as expectations for interest-rate rises by the Bank of England look excessive, he says. The euro falls to as low as 0.8544 pounds and ING expects it to reach 0.8700 over the next few months.