Bonds & Rates
Home›Bonds & Rates›Economy›US Treasury yields slip as Hormuz developments ease in…
US Treasury yields slip as Hormuz developments ease inflation worries
The 2-year T-note yield fell nearly 5 basis points to 4.193%, while oil dropped more than 3% after US sanctions on 60 Iran-linked entities.
US Treasury yields edged lower across the curve on Tuesday as improving developments in the Middle East reduced market concerns about inflation, with traders also digesting the US Treasury Department decision to extend its bond buyback program aimed at curbing the US 30-year yield, according to FXStreet.
Oil prices pressured lower alongside the rate move, falling more than 3% after the US imposed sanctions on 60 entities linked to Iran on Monday. FXStreet also noted reports of a US offer relayed through Pakistan’s army chief regarding stopping proxy attacks and halting the blockade in the Strait of Hormuz, which Iran denied, while the White House said mines were removed in the Strait of Hormuz.
In the US data backdrop, FXStreet pointed to a stronger jobs picture based on ADP Employment Change’s 4-week average, plus an improvement in July building permits. At the same time, it said household confidence regarding financial and economic conditions weakened.
Markets are now focused on Wednesday’s release of the Federal Reserve’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, along with additional jobs and growth data, and remarks from Fed Chair Kevin Warsh. FXStreet cited the US 2-year T-note yield down nearly five basis points to 4.193%, and the US 10-year benchmark note down six basis points to 4.635%.