By U.S. Treasury yields edged higher on Friday after falling sharply the previous session, while oil prices fell, as traders monitored the prospect of a resolution to the Middle East war.
The 10-year Treasury note yield — the main benchmark for mortgages, auto loans and credit card debt — was up more than 1 basis point at 4.483%.
The yield on the 2-year Treasury note, which typically moves in line with short-term Federal Reserve interest rate decisions, rose more than 1 basis point to 4.087%. The 30-year Treasury yield, which tends to track geopolitical events, advanced 2 basis points to 4.972%.
One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.
Oil prices pared losses after President Donald Trump signaled that a potential peace deal between the U.S. and Iran might not come to fruition. U.S. crude oil futures closed down 3.2% at $84.88 per barrel, while Brent crude, the international price benchmark, dipped 3.4% to close at $87.33.
“The terms that Iran leaked out to the Fake News have NOTHING to do with the terms that were agreed to, in writing. What they said, including their weak and pathetic statement on having a deal, bears no relation to the truth,” he wrote in a Truth Social post. “They better get their act together, and FAST!”
Pakistan Prime Minister Shehbaz Sharif said later Friday that a “final, agreed upon text” of a deal between the two countries “has been reached.”
This comes after Iran’s state-run Mehr News Agency on Friday reported details of the draft 14-point memorandum of understanding between the U.S. and Iran. The proposed deal includes a reopening of the Strait of Hormuz “with Iranian agreements”, the lifting of oil sanctions and an end to all hostilities in the region, including Lebanon.
Borrowing costs fell sharply on Thursday, with 10-year Treasury yields down as much as 8 basis points, with yields on the 2-year and 30-year also firmly lower, after Trump called off plans for fresh strikes against Iran. He also said that Washington had made a “settlement,” subject to a “finalization of documents.”
The prospect of a peace deal also pulled energy prices sharply lower and sent global bond yields tumbling.
The reversal in U.S. Treasury yields comes as investors digested a higher-than-expected rise in May’s producer price index, a key indicator of wholesale inflation.
The index was up a seasonally-adjusted 1.1% for the month, pushing the annual rate to 6.5%, as per the Bureau of Labor Statistics data reading. Economists polled by Dow Jones had expected a monthly print of 0.7%.
View Source Above content are taken from external website. If original source wants to remove content please contact us.
