US 10Y Bond Yield Hits 12-week Low

The yield on the US 10-year Treasury note fell to 4.35% on Friday, approaching the two-week lows touched earlier in the week, as developments in the Middle East continued to dominate investor sentiment. Uncertainty persists over how quickly the US and Iran can reach an agreement to end the conflict, with US Secretary of State Marco Rubio saying Washington expects a response from Tehran on Friday regarding a proposal to end the war. Although President Trump said the ceasefire remains in effect, both the US and Iran have reportedly exchanged fire in the Strait of Hormuz. Meanwhile, the latest jobs report showed the US economy added 115K jobs last month, nearly double market expectations of 62K. In addition, the Michigan Consumer Sentiment survey showed confidence fell to a record low. Markets continue to expect the Fed to keep interest rates largely unchanged through the rest of the year, while pricing in roughly a 40% chance of a rate hike by April 2027.

The yield on the US 10-year Treasury note was little changed around 4.38% on Friday, as traders continued to monitor developments in the Middle East while the latest jobs report had limited impact on markets. Uncertainty remains over how quickly the US and Iran can reach an agreement to end the conflict, after US forces struck missile and drone launch sites, along with other military assets in Iran, which Washington said were linked to attacks on three US warships transiting the Strait of Hormuz. Still, President Trump said the ceasefire remains in effect. Meanwhile, the jobs report showed the US economy added 115K jobs last month, nearly double market expectations of 62K. The unemployment rate held steady at 4.3% while wage growth remained at 0.2% month-over-month, below expectations of a 0.3% increase. Markets expect the Fed to keep interest rates largely unchanged through the rest of the year, while pricing in roughly a 40% chance of a rate hike by April 2027.

The yield on the US 10-year Treasury note hovered around 4.39% on Friday, following an advance of about 3 basis points in the previous session, as renewed US-Iran clashes in the Strait of Hormuz reduced expectations for an imminent peace deal and reignited inflation concerns. Three US Navy destroyers transiting the strategic waterway reportedly intercepted Iranian attacks and carried out defensive strikes, although President Donald Trump said the ceasefire remains in effect. The Trump administration is still awaiting Iran’s response to a proposal aimed at reopening Hormuz and bringing an end to the nearly 10-week conflict, with reports suggesting Tehran is expected to reply via Pakistan within the next two days. Meanwhile, investors are also focused on the upcoming April jobs report, which is forecast to show the US economy added 62K jobs last month, down from 178K in March, while the unemployment rate is expected to hold steady at 4.3%.