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

1037 ET - Investment-grade bonds look attractive considering their current elevated yields, UBS Global Wealth Management strategists Matthew Carter and Jon Gordon say in a note. "High-quality bonds offer three potential benefits: income generation, portfolio diversification, and possible capital appreciation," they say. Nonetheless, investors should diversify their investment to manage risks, the strategists say. "Emerging market bonds, for example, can offer appealing yields and diversified return potential." (miriam.mukuru@wsj.com)

0957 ET - The dollar index higher in morning trade, pairing with highs reached in Treasury yields putting pressure on grain futures and other commodities. A stronger dollar makes U.S. grain exports less competitive on the world market. "Outside markets are increasingly important -- and mostly negative for grains," says Jim Wiesemeyer of Ag Bull in a note. Uncertainty stemming from wars in the Black Sea and Middle East add to inflation concerns. CBOT corn falls 0.7% in early trading, while soybeans slide 0.6% and wheat is up 0.1%. (kirk.maltais@wsj.com)

0955 ET - Hungary could be the next potential candidate in central and eastern Europe to adopt the euro, UniCredit's Eszter Gargyan says in a note. Hungary's new pro-EU government plans to meet the criteria for adopting the euro by 2030. Markets will be closely watching the government's medium-term fiscal plans as it has pledged to lower the deficit to enable euro adoption, she says. Romania is likely the next candidate after Hungary, she says. Euro adoption could reduce vulnerabilities related to Romania's twin deficits, although political instability could complicate necessary fiscal adjustments, she says. Political fragmentation and weak public support could hold back euro adoption in Poland while public support in the Czech Republic is also low. (renae.dyer@wsj.com)

0948 ET - September was a very tough month for global fixed income, given the challenging performance for the asset class, MFS Investment Management's Benoit Anne says in a note. It was particularly tough for long-duration indexes--those most sensitive to the sharp spike back to triple-digit territory for the MOVE index, an indicator of rate volatility, says the head of market insights. Tax-exempt municipal bonds produced a minus 4.36% negative return for the month, their worst monthly performance since September 2008, he says. Given the substantial rise in U.S. rates, U.S. indexes underperformed, including the U.S. Treasury index which was down 2.24% for the month, he says. Euro indexes outperformed, with euro investment grade only down 1.33% for the month, Anne says. (emese.bartha@wsj.com)

0940 ET - Alternative assets such as hedge funds look more attractive given high market volatility in stocks and bonds, UBS global wealth management strategists Matthew Carter and Tony Petrov say in a note. Alternative assets depend less on stock and bond moves, they say. In the current environment, "the goal could be to seek either returns that depend less on stock and bond markets or assets that are less volatile in turbulent times." Nonetheless, investments in alternative assets, including hedge funds, carry risks such as illiquidity and complexity, they say. (miriam.mukuru@wsj.com)

0939 ET - The European Central Bank's September rate increase had broad support according to minutes of the meeting, Carsten Brzeski at ING says in a note. However, the discussion was more balanced than ECB President Christine Lagarde's post-meeting comments suggested, meaning an October hike looks unlikely, he says. Some officials noted that the energy shock could be less persistent than assumed, while others questioned the narrative that the economy was proving resilient to the energy shock. Meanwhile rising bond yields are adding to opinions that a hike may be unnecessary, Brzeski adds. "With bond markets doing the ECB's job, some officials might be less keen to continue hiking than they were at the September meeting." (don.forbes@wsj.com)

0936 ET - Further euro weakness looks likely but bets against the single currency are probably best expressed against the Australian dollar and Swiss franc, Morgan Stanley strategists say in a note. French debt concerns have weighed on the euro via increased risk premium and lower European Central Bank interest-rate rise expectations, they say. Morgan Stanley recommends selling the euro versus the high-yielding Australia dollar with a target of 1.53 and stop loss of 1.69. It also advises selling the euro versus the safe-haven franc with a target of 0.90 and stop loss of 0.96 to help investors hedge for potential further regional volatility. The euro rises 0.2% to 1.6112 Australian dollars and is steady at 0.9331 francs.(renae.dyer@wsj.com)

0934 ET - The Romanian leu could weaken further after reaching record lows against the euro recently, Raiffeisen Research analysts say in a note. Romania has failed to form a new government following the May collapse of the previous cabinet. However, a new government should be sworn in soon and it is likely to secure sufficient parliamentary support to continue the fiscal consolidation process, the analysts say. "However, these supportive factors are offset by Romania's sizeable macroeconomic imbalances, which, in our view, continue to argue for a gradual depreciation of the leu in the near-term." The euro falls 5.3440 leu after reaching a record high of 5.3550 on Friday, LSEG data show. Raiffeisen expects it to reach 5.40 by year-end. (renae.dyer@wsj.com)

0847 ET - U.S. Treasury yields hover near multiyear highs as investors monitor comments from Federal Reserve officials and an auction of 30-year bonds. The 10-year Treasury yield currently hovers at 5.324% and rose as high as 5.353%. The 2-year Treasury yield reached 4.820% Thursday and currently hovers around 4.812%. Fed governor Christopher Waller said he could see additional rate increases ahead, but noted flexibility on when they could occur. The 30-year Treasury yield hovers around 5.696%. (jessica.coacci@wsj.com)

0846 ET - The Czech koruna could extend recent declines if the dollar maintains its strength, Raiffeisen Research's Martin Kron says in a note. Risk aversion and expectations of higher U.S. interest-rate rises have supported the dollar, pushing the euro above 24.40 koruna, he says. "The interest rate advantage should stay positive for the koruna, but it may narrow, as we expect one more rate hike from the European Central Bank, while the Czech National Bank is unlikely to raise rates further." Raiffeisen raises its forecast for the euro to 24.30 koruna by year-end but sees risks skewed towards a weaker koruna. The euro trades flat at 24.404 koruna, having reached a near six-month high of 24.488 last week, LSEG data show. (renae.dyer@wsj.com)

0841 ET - Political instability and rising debt costs in Europe leave the euro vulnerable to further falls, XS.com's Simon-Peter Massabni says in a note. European fiscal stability faces growing headwinds as the WSJ reports that France is considering issuing more short-term debt after foreign investors showed reluctance to hold longer-dated paper, he says. The report "indicates that market participants fear deep political paralysis in Paris will prevent the government from executing necessary public spending cuts," he says. Persistent energy inflation risks stemming from the Middle East conflict also weigh on the euro, he says. The euro falls 0.1% to $1.1184, having hit $1.1160 on Monday, its lowest level in more than 16 months, LSEG data show. (renae.dyer@wsj.com)

0757 ET - Two down and one to go. After this week's successful auctions of 3-year and 10-year notes, $22 billion in 30-year bonds is set to be auctioned today. Charlie Ripley, Senior Investment Strategist for Allianz Investment Management, says the 30-year bond reopening should act as another litmus test for investor demand for duration and if the auction goes anything like the 10-year auction, it should be well received. Ripley called the 10-year auction results "unambiguously strong across the board." He says, "The auction cleared 1.8 basis points through the pre-auction yield with strong bid to cover and strong absorption by end investors with non-dealer bidding of 97.5%. With dealer takedown of 2.5% the market should feel some comfort that dip-buyers are beginning to emerge."