US Treasury yields climb as energy prices remain high, amid US President Donald Trump's rejection of a peace agreement with Tehran.

Federal Reserve Governor Lisa Cook, in a speech in Oakland, California, said that the number and magnitude of future adjustments to the Fed funds rate would depend on inflation and labour market data.

Al Jazeera reported that US President Donald Trump is prepared to ease sanctions on Iran and to unfreeze its assets in exchange for progress on nuclear talks.

ECB President Christine Lagarde said the bloc's economy continued to expand broadly across countries and sectors, with manufacturing and the labour market holding up well.

Brown Brothers Harriman’s Elias Haddad notes that rising global bond yields, driven by a rebound in Oil prices and uncertainty around US-Iran talks, are making Treasuries more attractive than equities.

TD Securities economists Oscar Munoz and Eli Nir see an October Federal Reserve hike as increasingly likely, with Fedspeak remaining hawkish and officials “expecting more hikes.” They highlight strong PCE inflation, modest ISM Manufacturing gains, and a softer September NFP with higher unemployment.

The United States (US) and Iran are expected to resume indirect talks as early as Monday or Tuesday, according to an official briefed on the negotiations cited by Reuters.

United Kingdom (UK) Chancellor of the Exchequer John Healey said during the European trade on Monday that the administration will maintain control of Britain's finances while speaking about the upcoming fiscal budget this year.

The Deutsche Bank Early Morning Reid details a sharp rise in US Treasury yields, with the 10-year reaching its highest level since 2007 and the 30-year touching levels last seen in 2004. The move is driven by strong data and increased odds of a Federal Reserve hike in October.

Bank of England (BoE) Deputy Governor Dave Ramsden said on Monday that risks to the inflation outlook have become increasingly tilted to the upside, according to Reuters.

Kit Juckes at Societe Generale notes that EUR/USD forecasts have been repeatedly revised down as Dollar strength persists. While consensus has moved from 1.20 to 1.16 and Societe Generale now sees 1.15, client discussions suggest markets are even more Dollar-bullish.

Deutsche Bank’s Jim Reid notes that global equities, including the S&P 500, held up well despite a notable rise in bond yields and hawkish rate expectations. The S&P 500 gained over 1% on the week and remains close to record highs, supported by optimism on growth and strong PMI data.

Societe Generale’s Kit Juckes argues that while the longer-term outlook for the Dollar is deteriorating due to US politics and changing global savings patterns, the short-term picture remains constructive.

Rabobank’s RaboResearch Global Economics & Markets team flags potential historic tightening by the Bank of Japan (BOJ). Former BOJ director Momma sees another 25 basis point hike as a real possibility, which would be the first back-to-back move in decades.

Japan's top currency diplomat Atsushi Mimura said on ​that markets should take at face value the "very ‌clear" message Tokyo and Washington delivered last week on the Yen, signalling his resolve to act against excessive falls ​in the currency, Reuters report.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, inched lower after opening at a bullish gap, remaining in the positive territory and trading around 101.10 during European hours on Monday.

RaboResearch Global Economics & Markets notes the Reserve Bank of Australia (RBA) must decide on policy with strong construction growth and historical parallels to past Oil shocks and inflation spikes.

Societe Generale’s Kenneth Broux describes a difficult week for global bonds as rising Oil prices deter duration buying. US Treasuries and Bunds have repeatedly broken into higher yield ranges, with next US 10-year projections at 5.24% and 5.36% and Bund at 3.70%/3.74%.

EUR/CAD extends its gains for the third consecutive day, trading around 1.6110 during the European hours on Monday.

Italy Trade Balance non-EU down to €2B in August from previous €2.55B

Austria UniCredit Bank Manufacturing PMI climbed from previous 54.4 to 54.9 in September

MUFG’s Lloyd Chan warns that the Indonesian Rupiah remains exposed as US yield increases erode Indonesia’s rate support.

DBS Group Research strategist Sherilyn Chew contrasts India’s domestic backdrop with Indonesia, arguing India is deeper into a tightening phase. Markets are pricing a possible Reserve Bank of India (RBI) hike in October, with liquidity surplus falling after RBI draining measures.

USD/IDR recovers its recent losses from the previous trading day, trading around 17,980 during the Asian hours on Monday.

Asian equities mostly trade in negative territory on Monday, pressured by rising oil prices and higher US Treasury yields. Traders doubt that the United States (US) and Iran will reach a ceasefire agreement soon. 

Singapore Industrial Production (YoY) climbed from previous 6.8% to 15.4% in August

Singapore Industrial Production (MoM): -0.5% (August) vs previous 2.3%

Gold prices fell in India on Monday, according to data compiled by FXStreet.

Gold (XAU/USD) attracts fresh sellers at the start of a new week and weakens below the $4,200 mark, hitting its lowest level since August 5 during the Asian session amid a bearish fundamental backdrop.

China’s Commerce Ministry said on Monday that the United States (US) and Chinese officials confirmed that the bilateral trade truce has been extended by two months, moving the expiration date from November 10 January 10, 2027.