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

0539 GMT - The U.S. Treasury yield steepens, with short-end yields falling and intermediate- and long-end yields rising in Asian trade as the bond selloff continues. Long-end yields are up on the day but remain below Monday's multidecade highs as the price of Brent oil hovers around $100 per barrel. The two-year Treasury yield declines 0.4 basis points to 4.828%, according to Tradeweb, as expectations of a Federal Reserve rate hike in October have retreated in recent days. Money markets currently price in a 24% probability of a 25-basis-point Fed rate hike this month, well below the 70% level seen Monday last week. The 10-year yield is up 0.4 basis points at 5.314%, while the 30-year yield is up 9 basis point at 5.672%, according to Tradeweb. (emese.bartha@wsj.com)

0531 GMT - U.S. three-year yields have risen by 48 basis points since the last auction and if they clear at this level, it would be the highest yielding three-year auction since May 2006, J.P. Morgan strategists say ahead of Tuesday's three-year note auction. The U.S. Treasury will auction $58 billion in three-year notes and the strategists expect the offer to be well received. "Given a more supportive macro and technical backdrop, we think tomorrow's [Tuesday's] auction will be digested smoothly," they write in a note. The three-year Treasury yield declines 0.2 basis point to 4.958%, according to Tradeweb. (emese.bartha@wsj.com)

0519 GMT - The low level of domestic participation in the government bond market in France speaks to a structural weakness in the buyer base, says RBC BlueBay Asset Management's Mark Dowding. "Paris would be well advised to look to policies designed to encourage a greater share of domestic investment to be channeled towards its bond market," the fixed income CIO says in a note. The re-domestication of portfolio allocation could be an increasingly important theme more broadly in global markets in the years ahead, he says. (emese.bartha@wsj.com)

0510 GMT - The U.S. Treasury curve has seen a broad steepening move recently as longer-dated Treasury yields have continued setting multidecade highs, says HSBC's Dhiraj Narula in a note. "The surge in volatility, coupled with a lack of any clear technical resistance at these levels from recent history has, in our view, kept many investors on the sidelines despite the growing optical appeal of elevated long-end rates," the U.S. rates strategist says. HSBC retains its view that the 5-30-year segment of the U.S. Treasury yield curve will steepen. (emese.bartha@wsj.com)

0505 GMT - The selloff in French government bonds is overdone relative to the state of public finances in the first half of 2026, but it is consistent with rising domestic political uncertainty over next year's fiscal plans, Pantheon Macroeconomics' Claus Vistesen and Melanie Debono say in a note. "French government bonds are in a world of pain, caught in a perfect storm of rising domestic political uncertainty and social tensions and a sell-off in global bonds, adding to risk premiums in developed markets," the economists say. The fiscal trajectory alone does not justify an OAT-Bund spread at 140 basis points, but political uncertainty does; investors are unlikely to give lawmakers the benefit of the doubt ahead of presidential and likely legislative elections next year, so pressure on OATs will persist, they say.