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

1711 ET - U.S. public pensions' funded ratio rose to an estimated average of 86% at the end of September, the highest level in nearly 20 years, according to Equable Institute, a bipartisan research provider focused on the public-pension sector. A booming stock market has boosted the metric, which is the ratio of pensions' assets to the present value of their liabilities, but this also makes pensions more vulnerable to an economic downturn, Equable says. "If there is a sharp market correction-whether from an AI bubble or other macroeconomic factors-recent gains could reverse quickly." Equable adds, however, that U.S. pensions could make their gains more sustainable by taking advantage of rising interest rates. "The flip side is that pension funds now have the opportunity to lock in higher bond yields for years to come." (luis.garcia@wsj.com; @lhvgarcia)

1445 ET - Municipal bonds in the U.S. continue to offer advantages relative to Treasurys despite recent choppiness, according to a Nuveen report. Yields have risen as investors harvest losses and swap into ETFs, among other factors, Nuveen says. Supply keeps rising, but new issues have been largely absorbed. "We believe the recent underperformance, largely due to volatility and technical pressures, continue to present a compelling opportunity for investors with cash on the sidelines to lock-in elevated yields and attractive valuations." the firm says. Nuveen estimates the tax equivalent yield in a 10-year AAA muni reaches 6.93%, compared to 5.23% in a 10-year Treasury. (paulo.trevisani@wsj.com; @ptrevisani)

1417 ET - Gold futures settle lower amid U.S. dollar gains and a rise in oil futures as Middle East tensions persist. The firmer dollar and high oil prices "reinforced concerns that persistent energy-driven inflation could keep the Federal Reserve on a hawkish policy path," Kaynat Chainwala of Kotak Neo says in a note. The market will be looking to this week's U.S. inflation data--CPI on Wednesday and PPI on Thursday--as well as comments by Fed Chairman Kevin Warsh for more clarity on the interest-rate outlook, she adds. Front-month gold settles down 0.6% in New York at $4,165.80 a troy ounce and silver falls 0.9% to $60.141 a troy ounce. (anthony.harrup@wsj.com)

1345 ET - The estimated funding level of pension plans sponsored by S&P 1500 companies increased by 1 percentage point in September to 113% as a result of an increase in discount rates slightly offset by a decrease in equity markets, according to professional-services firm Marsh. As of the end of September, the plans' estimated aggregate surplus increased by $6 billion, to $181 billion, compared with a $175 billion surplus at the end of August, Marsh says. "Pension funded status for the S&P 1500 rose 1% percent in September after interest rates climbed to 17-year highs," said Marsh partner Matt McDaniel. "Persistent inflation and high energy costs kept pressure on rates, prompting the Fed to raise them by a quarter point in September." (jennifer.williams@wsj.com; @jenkayw)

1323 ET - France's A+ rating is weighed down by high and rising debt and low potential growth, Fitch Ratings says. The nation is also experiencing a political and social backdrop that makes fiscal consolidation difficult, Fitch added. The country's proposed budget for 2027 "highlights the growing difficulty of reducing the fiscal deficit and stabilizing public debt amid weak growth, higher interest costs and persistent political fragmentation," Fitch says. Failing to reduce the debt could lead to a revision of the country's stable outlook to negative, Fitch says, adding "a further substantial rise in government debt could then lead to a downgrade." The latest budget proposal aims to reduce the deficit to 5% of GDP and comply with EU's net expenditure rule, Fitch says. (stephen.nakrosis@wsj.com)

1302 ET - Bitcoin treasury firm Strategy Inc., which holds the largest bitcoin reserves in the world, announced a new purchase of bitcoin to start the day. The firm buying 250 BTC, bringing its total ownership to 848,250 coins, at an average buying price of $75,444 across its treasury. This is the second purchase the bitcoin treasury made since the start of the month, according to Strategy's data. Strategy's purchases are often a catalyst for how bitcoin moves in a given trading day. Bitcoin falls 1%, ethereum is 0.2% lower, and XRP is down 2.2%. (kirk.maltais@gmail.com)

1239 ET - Bitcoin's next big test is Wednesday's CPI report, says analysts with Bitfinex in a note. "The question for this week is whether Wednesday's U.S. Consumer Price Index (CPI) report changes the rate and yield outlook enough to give bitcoin room to move, and whether spot demand is there to carry it," says the firm. An upward movement in prices would potentially demonstrate improved spot demand, as would an improvement of net inflows into bitcoin ETFs, says Bitfinex. Last week was net negative for ETF flows, according to data from Coinglass -- landing at a net outflow of $678.9 million. Bitcoin is down 1% to $82,816. (kirk.maltais@wsj.com)

1234 ET - Gold futures are lower with the U.S. dollar gaining, while oil futures rise. Strong central bank demand and inflows into gold-backed ETFs have provided support for the metal amid shifting interest-rate expectations, geopolitical tension and global market uncertainty, says Paul Hoffman, a data analyst at BestBrokers.com, in a note. Prices have responded to changing expectations around monetary policy, movements in the U.S. dollar and shifts in investor positioning, "while September's correction demonstrated how quickly sentiment can turn even during a broader period of strong demand," he adds. Gold for December delivery is off 0.6% in New York at $4,189.30 a troy ounce. Silver is down 0.8% at $60.555 a troy ounce. (anthony.harrup@wsj.com)

0826 ET - Governments are increasingly dependent on yield-demanding private-sector investors for long-term borrowing, adding to fixed-income turbulence. "Global bond markets are adjusting to a less forgiving buyer base," TS Lombard's Alexandros Xenofontos write. They say insurers, asset managers and leveraged investors such as hedge funds are stepping into a void left by central banks. While government institutions buy and hold bonds for structural reasons, the new crop of buyers tend to purchase only when the relative value and financing cost are attractive enough. "Governments will still fund themselves, but increasingly at prices set by more discretionary investors," TS Lombard says. (paulo.trevisani@wsj.com; @ptrevisani)

1226 ET - Gold futures are lower with the U.S. dollar gaining and oil futures rising. Strong central bank demand and inflows into gold-backed ETFs have provided support for the metal amid shifting interest-rate expectations, geopolitical tension and global market uncertainty, says Paul Hoffman, a data analyst at BestBrokers.com, in a note. Prices have responded to changing expectations around monetary policy, movements in the U.S. dollar and shifts in investor positioning, "while September's correction demonstrated how quickly sentiment can turn even during a broader period of strong demand," he adds. Gold for December delivery is off 0.6% in New York at $4,189.30 a troy ounce. Silver is down 0.8% at $60.555 a troy ounce. (anthony.harrup@wsj.com)

1220 ET - Governments are increasingly dependent on yield-demanding private-sector investors for long-term borrowing, adding to fixed-income turbulence. "Global bond markets are adjusting to a less forgiving buyer base," TS Lombard's Alexandros Xenofontos write. They say insurers, asset managers and leveraged investors such as hedge funds are stepping into a void left by central banks. While government institutions buy and hold bonds for structural reasons, the new crop of buyers tend to purchase only when the relative value and financing cost are attractive enough. "Governments will still fund themselves, but increasingly at prices set by more discretionary investors," TS Lombard says. (paulo.trevisani@wsj.com; @ptrevisani)

1059 ET - Material shortages in the German manufacturing sector rose somewhat in September, Germany's Ifo Institute says. A total of 14.6% of companies reported shortages of intermediate products, up from 13.3% in August, although there is still no sign of a broad-based rise in supply, it says. "In individual industries, however, shortages of intermediate products are once again becoming a bigger problem," says Klaus Wohlrabe, head of surveys at Ifo. Supply remains strained in particular among manufacturers of data-processing equipment and electronic and optical products, where the share of companies with material shortages rose from 33.2% to 37.8%, Ifo says. "In parts of the electronics industry in particular, strong demand is running up against tight material supplies," Wohlrabe says.