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

0612 GMT - Australia's property market remains depressed thanks in part to higher interest rates and changes to tax arrangements for property investors, but there are some signs of life returning. The preliminary combined capitals auction clearance rate nudged up a little last week to 56.5%, its highest early success rate in 12 weeks, says property research group Cotality. This came despite falls in the two largest markets, where Sydney eased 1.4 percentage points and Melbourne 3.4 percentage points, it adds. The gains were concentrated in smaller markets, such as Adelaide, Brisbane and Canberra, Cotality says. (james.glynn@wsj.com; X @JamesGlynnWSJ)

0605 GMT - The Australian dollar is trading above 71.00 U.S. cents for the first time since June, supported by the Reserve Bank of Australia's "hawkish hold" of official interest rates last week, says Tony Sycamore, market strategist at IG Markets. Cooler-than-expected U.S. economic data are also weighing on the U.S. dollar, he adds. During the press conference that followed the RBA's decision last week, Governor Michele Bullock kept the door open to further tightening if inflation risks materialize. That hawkish bias has provided a solid undercurrent of support for the Aussie dollar, Sycamore adds. (james.glynn@wsj.com; X @JamesGlynnWSJ)

0601 GMT - The Japanese government is unlikely to declare an end to deflation this fiscal year ending in March 2027, given Monday's release of sluggish growth data, says Daiwa Securities economist Kento Minami. The Takaichi administration has said that it is closely examining whether the economy is strong enough to avoid returning to deflation before declaring an official end to it. The timing of the announcement is closely watched as it could affect the government's stance toward the Bank of Japan's monetary tightening. Strengthening economic fundamentals and key indicators--including inflation, the output gap, and unit labor costs--suggest that there is a low risk of Japan lapsing back into persistent deflation, Minami says.(megumi.fujikawa@wsj.com)

0550 GMT - As the holiday season in the eurozone is nearing its end, the government bond syndication season after the summer holidays may already get under way, Commerzbank's Erik Liem says in a note. Finland is usually the first country after the summer to carry out a syndicated transaction and Commerzbank expects this pattern to be repeated this year. "A new five-year RFGB [Finnish government bond] may already be launched this week," the rates strategist says. Meanwhile, a syndicated tap of Germany's 30-year Bund could follow next week, Liem says. (emese.bartha@wsj.com)

0546 GMT - German Bund yields are back at the upper end of their recent trading range, as the Iran ceasefire looks set to expire, Commerzbank's Erik Liem says in a note. That said, as ranges look set to hold, 10-year Bund yields should find a support at 3.20%, the rates strategist says. "Overall, energy prices and headline risks look set to remain the key drivers for Bunds," he says. "Ranges look set to hold and 10-year Bunds look attractive at levels above 3.20%." On Friday, the 10-year Bund yield closed at 3.20%, according to LSEG. (emese.bartha@wsj.com)

0539 GMT - U.S. Treasury yields decline across maturities, though stay at elevated levels, as Brent oil is largely stable, while market expectations of Federal Reserve interest-rate hikes are weakening. "Expectations of Fed hikes are being reduced," Danske Bank's Filip Andersson says in a note. The market is currently pricing in 35 basis points of Fed rate hikes for the next 12 months, less than Danske's call of two hikes of 25 basis points each. The Middle East situation remains fluid, with little progress in talks to reopen the Strait of Hormuz. The two-year Treasury yield falls 1.5 basis points to 4.155%, while the 10-year yield is down 1.4 basis points at 4.681%, according to Tradeweb. (emese.bartha@wsj.com)

0531 GMT - Given the recent rise in long-end bond yields in major markets, including the U.S., Japan and the U.K., analysts at Bank of America say they do not see any single driver. "There is not a single driver to point to, but excessively loose fiscal policy is generally a common factor," they say in a note. In the U.S., the rise in long-end rates has happened despite the fact that the Treasury has kept coupon auction sizes stable, essentially pivoting more and more to shorter-term funding, the analysts say. (emese.bartha@wsj.com)

0530 GMT - The price of newly listed homes for sale fell 2% in August, the largest drop for the month since 2018 in a traditionally quiet time for the market, property website Rightmove says. The average price was 364,999 pounds, 1% lower than at this point last year. The number of homes on the market for sale is also at a 12-year high for the time of year, Rightmove says. "Buyers have the widest choice of homes for sale at this time of year in more than a decade, so standing out on price for the right reasons is hugely important," Rightmove's Colleen Babcock says. (ian.walker@wsj.com)

0522 GMT - Malaysia's inflation should remain manageable, with targeted subsidies continuing to cushion households from near-term swings in global fuel prices, Kenanga economists say in a note. However, higher crude oil prices following stalled U.S.-Iran talks on reopening the Strait of Hormuz could raise transport, food and production costs, and prolonged disruptions could feed into consumer prices, they say. El Nino-related weather disruptions could also pressure up food inflation, they add. Kenanga maintains its 2026 Malaysia inflation forecast at 2.1%, compared with 1.4% in 2025. It expects Bank Negara to keep the policy rate at 2.75% through 2026, as underlying inflation remains contained and domestic demand resilient.(yingxian.wong@wsj.com)

0520 GMT - The pace of Japan's economic growth slowed in the April-June quarter due to weak corporate and household spending, government data showed Monday. However, there is little reason to be overly pessimistic about the results, says Daiwa Securities economist Kento Minami. Real incomes continue to improve in the household sector, while corporate investment appetite for labor-saving, artificial intelligence, and digital transformation remains resilient on the back of strong profits. "With signs of improvement emerging in both consumer and business sentiment, the recovery momentum for the Japanese economy appears intact," he says. (megumi.fujikawa@wsj.com)

0516 GMT - The growing disconnect between geopolitical uncertainty and asset-price volatility has been a puzzling feature of markets in recent months, says Federated Hermes's John Sidawi in a note. Event risk has remained notably elevated since late February, driven largely by the conflict in the Middle East and an increasingly unpredictable policy backdrop from the U.S., but "this does not appear to be reflected in either implied or realized volatility," says the fixed income portfolio manager. The most compelling explanation for the current volatility puzzle is not that investors have become complacent, but that they have become exhausted, he says. For now, markets appear willing to tolerate a significant amount of uncertainty without demanding higher risk premiums, while this equilibrium is unlikely to be permanent, he says. (emese.bartha@wsj.com)

0516 GMT - For U.S. Treasurys, Morgan Stanley is betting on a seven- to 30-year steepener and it also sees the historically stronger half of August still to come, its strategists say in a note. "Over the past 25 years, the U.S. Treasury index returned 0.64% in August in excess of T-bills, its best month, and the result clears the 95% significance threshold," they say. Since 2011, the August pattern has concentrated in the second half of the month. U.S. Treasury delivered negative second-half excess returns in only two of the past 14 years, they add.