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

0215 GMT - Malaysia's fiscal deficit is forecast to narrow to 3.4% of GDP in 2027 from an estimated 3.6% in 2026, as revenue growth supports gradual fiscal consolidation, BMI says in a note. The government is targeting a deficit of 3.3% next year. Higher oil prices and stronger economic activity are expected to boost petroleum-related income and tax collections. However, elevated energy costs and household assistance will keep spending high, with subsidies and social assistance budgeted at 72.7 billion ringgit in 2027, BMI says. Development spending is projected to fall for a third consecutive year, potentially weighing on longer-term productivity and innovation, it adds. A prolonged U.S.-Iran conflict could increase subsidy costs and widen the deficit, BMI says, adding that severe El Nino conditions may require additional agricultural support. (yingxian.wong@wsj.com)

0200 GMT - A comprehensive strategy to guarantee supply-side resilience will be key for economies to navigate an environment marked by adverse weather and geopolitically induced disruptions, says Silvana Tenreyro, chief economist at the IMF. A well-designed approach must encompass both public and private sectors, aiming not only to help economies cope with the aftermath of shocks but also to reduce exposure. She calls for building stronger supply buffers in critical sectors and increasing investment in key technologies that have few alternatives, such as energy. For most countries, reshoring is not a viable solution, Tenreyro notes, urging more diversified trade relationships instead to limit exposure to individual suppliers and buyers. (fabiana.negrinochoa@wsj.com)

0200 GMT - India stands out in the IMF's latest World Economic Outlook, at a time when downward revisions have become more widespread, with about 47% of economies downgraded. India remains one of the fastest-growing major economies, with fiscal-year growth projected at 7.0%. "This reflects stronger-than-expected momentum, supported by resilient domestic demand and robust services activity." Growing evidence of stronger economic potential is supported by favorable demographics, a large and expanding domestic market, and continued structural reforms, it adds. The IMF raises its economic growth forecasts for the current fiscal year ending March 2027 and the next fiscal year for India by 0.6 percentage points and 0.3 percentage points to 7.0% each. (fabiana.negrinochoa@wsj.com)

0200 GMT - Extreme weather exacerbated by the ongoing El Niño episode could further undermine commodity markets, worsening the impact of high fertilizer prices and disrupting other climate-sensitive sectors like transportation, the IMF warns. Past episodes have shown that El Niño typically drives up food and commodity prices while weighing on activity, especially in economies where food is a major share of the consumer basket. Such risks are particularly acute for energy importers, especially emerging and developing economies with limited fiscal space and external buffers. Persistently higher commodity prices could widen current account deficits and intensify exchange-rate pressures. Higher inflation could meanwhile require tighter monetary policy, further dragging growth.(fabiana.negrinochoa@wsj.com)

0200 GMT - Fiscal policy must be restrained and help put a lid on demand pressures amid heightened inflationary risks, says Silvana Tenreyro, chief economist at the IMF. "While monetary policy tightened significantly after the pandemic, primary deficits have remained elevated and, in many countries, are significantly higher than before," she says. The rise in borrowing costs and its implications for fiscal sustainability make it all the more urgent for authorities to rebuild fiscal space. The interaction of higher financing costs with elevated debt levels exposes a vulnerability. Strong action is required to restore fiscal buffers and shore up capacity to withstand future shocks. (fabiana.negrinochoa@wsj.com)

0200 GMT - Monetary policy should remain firmly focused on price stability as inflationary risks persist, says Silvana Tenreyro, chief economist at the IMF. Central banks' policy stances need to be restrictive enough to return inflation to target in a timely manner, preventing a second-round impact. So far, pass-through to core inflation has been contained, but policymakers need to stay on alert, she says. Where commodity price increases and tech-related investment fan pressures, banks need to tighten further. "The appropriate stance will differ across countries, but the objective is the same: to ensure price stability. Central bank independence remains vital in achieving that goal." (fabiana.negrinochoa@wsj.com)

0200 GMT - The global economy could soon test the limits of resilience, says Silvana Tenreyro, chief economist at the IMF. Dwindling energy inventories could cause geopolitical shocks to be transmitted more forcefully to prices, while other commodity markets face risks from weather events and disruptions. The tech-related investment that is buffered against the energy shock has made growth reliant on select economies and sectors, she adds. Borrowing costs are climbing, public debt is high and fiscal buffers depleted. In a scenario where higher commodity prices and fiscal concerns spur reassessment of borrowing risks, global growth in 2027 could be much slower and inflation higher. "Keeping public debt on a durably sustainable path can prevent such a scenario."(fabiana.negrinochoa@wsj.com)

0155 GMT - Inflation worries keep the Reserve Bank of Australia in a hawkish monetary policy stance, Capital Economics' Abhijit Surya says in commentary. Minutes of the RBA's September meeting released earlier, "confirmed that the decision to hike rates was underpinned by the Board's view that some of the upside risks to inflation it had previously identified were materializing," the senior APAC economist notes. However, "the Board did briefly consider the case for leaving rates unchanged, citing the weakening housing market and the possibility that earlier tightening could weigh more heavily on activity than expected," the economist says. These factors will likely keep the RBA from raising rates further in coming months, Surya adds.(ronnie.harui@wsj.com)

0142 GMT - Confidence levels across the Australian economy remain deeply depressed. National Australia Bank's September survey of firms shows its measure of confidence is 18 points below its long-term average and 22 points lower than a year ago. Meanwhile, NAB's employment index declined to its lowest level in five years, while purchase costs stayed elevated. The combination of weak confidence, cost pressures, above-average capacity utilization and softer profitability is unusual, and may suggest a further softening in activity in the final quarter of 2026, NAB says. (james.glynn@wsj.com; @JamesGlynnWSJ)

0115 GMT - Bitcoin slips in early Asian trade. Last week was negative for ETF flows, according to data from Coinglass, with a net outflow of $678.9 million. "This weakened a major source of demand and showed less willingness to maintain short-term exposure," says Antonio Di Giacomo at XS.com in a note. Bitcoin could remain under pressure if institutional outflows continue, particularly amid expectations of higher-for-longer U.S. interest rates, he adds. Bitcoin is down 1.7% at $81,590.02.(amanda.lee@wsj.com)

0056 GMT - Asian currencies consolidate against the dollar, but may be weighed by safe-haven demand for the greenback amid tensions between Russia and Ukraine. Russia continued striking Ukraine's energy infrastructure despite U.S. President Trump's announcement of an "energy ceasefire", CBA's Kristina Clifton says in a research report. Also, "Ukraine's President Zelenskyy confirmed that Russia had not honoured the truce, and Ukraine would continue retaliating," the senior economist and senior currency strategist notes. The U.S. Dollar Index is likely to trade higher this week because of higher energy prices, Clifton adds. The U.S. Dollar Index is little changed at 102.566, LSEG data show; dollar is down 0.1% at 159.44 yen, but is up 0.1% at 1,336.20 won. (ronnie.harui@wsj.com)

0045 GMT - JGBs edge lower in price terms in the early Tokyo session amid concerns over elevated oil prices that could be sustained by tensions in Europe and the Middle East. The Russia-Ukraine energy ceasefire is proving to be "illusive", NAB's Rodrigo Catril says in commentary. "In the Middle East, the Iranian-backed Houthis continued attacks on Saudi Arabia after striking airports over the weekend, with energy infrastructure also targeted," the senior FX strategist adds. Rising oil prices tend to cause higher inflation in Japan, which could lead to quicker pace of BOJ rate increases. The five-year JGB yield is up 1.5 bps at 2.350%.