US 10-Year Yield Rises for Second Session

The yield on the US 10-Year Treasury note rose to around 4.35% on Tuesday, advancing for a second straight session as President Trump’s threat to escalate attacks on Iran overshadowed optimism surrounding ceasefire talks. Trump warned of strikes on Iranian power plants and bridges unless his conditions, including reopening the Strait of Hormuz, are met by 8 p.m. Eastern Time, though he noted that ongoing discussions with Tehran are progressing. Meanwhile, reports on Monday indicated that the US, Iran, and regional mediators are working toward a potential 45-day ceasefire and that more vessels are transiting Hormuz. Investors now turn to US durable goods orders data due Tuesday, along with inflation figures and the latest FOMC minutes later this week for further insight into economic conditions. Markets have fully priced in that the Federal Reserve will keep the federal funds rate unchanged later this month, with borrowing costs expected to remain steady through the rest of the year.

The yield on the US 10-year Treasury note hovered around 4.33% on Monday, the highest level in about a week, as traders returned from an extended holiday and continued to assess the impact of the war with Iran, now in its sixth week, while oil prices hovered near 2022 highs. President Trump threatened to target Iran’s power plants starting Tuesday, while Iran continues striking energy infrastructure in neighboring Gulf countries. Still, reports that Iran, the US, and a group of regional mediators are discussing a potential 45-day ceasefire that could pave the way toward ending the war and news indicating that more ships are passing through the Strait of Hormuz offered some temporary relief. Meanwhile on the data front, the ISM Services PMI prices index soared to 2022-highs dur to the effects of the war with Iran. Markets have fully priced the Fed will leave the federal funds rate steady later this month and expect borrowing costs to remain unchanged throughout the year.

The yield on the US 10-year Treasury note rose to 4.36% on Monday, the highest level in about a week, as traders returned from an extended holiday and continued to assess the impact of the war with Iran, now in its sixth week, while oil prices hovered near 2022 highs. President Trump threatened to target Iran’s power plants starting Tuesday, while Iran continues striking energy infrastructure in neighboring Gulf countries. Still, reports that Iran, the US, and a group of regional mediators are discussing a potential 45-day ceasefire that could pave the way toward ending the war and news indicating that more ships are passing through the Strait of Hormuz offered some temporary relief. Investors now await a series of releases that will provide further insight into the health of the economy, including the CPI and the FOMC minutes. Markets have fully priced the Fed will leave the federal funds rate steady later this month and expect borrowing costs to remain unchanged throughout the year.