Treasury yields fell across the curve on Monday after the U.S. and Iran halted hostilities in the Middle East over the weekend. Oil reversed course, with Brent crude down 5.77% after approaching $100 per barrel last week. Traders now look ahead to the Federal Reserve's rate decision on Wednesday.
Treasury yields fell on Monday after the U.S. and Iran halted hostilities in the Middle East over the weekend, pushing energy prices lower. The slide in borrowing costs came after the two sides held fire for the third consecutive night.
The yield on the 10-year Treasury note — the main benchmark for mortgages, auto loans and credit card debt — was more than 3 basis points lower at 4.6406% in early trade. One basis point equals 0.01%, and yields and prices move inversely to one another.
Shorter- and longer-term yields also moved lower. The 2-year Treasury note, which typically tracks short-term Federal Reserve interest rate decisions, dropped 2 basis points to 4.3030%. Meanwhile, the 30-year yield, which traditionally moves in response to geopolitical events, was down more than 3 basis points to 5.1260%.
Oil prices rapidly reversed course as the fighting paused. U.S. West Texas Intermediate futures slid 5.34% to $84.55. Brent crude, which last week had approached the $100 per barrel level, was last seen 5.77% lower, at $91.20.
The moves come as traders look ahead to the Federal Reserve's latest interest rate decision, due Wednesday. Consensus forecasts indicate the rate-setting Federal Open Market Committee will leave rates unchanged at 3.75%.
Investors are also weighing how the evolving Middle East picture is likely to shape the Fed's rate call. Other data releases scheduled this week include June's core PCE price index, the latest quarterly GDP print, and new orders data for U.S.-made durable goods.
Source: CNBC
Trading involves risk.
Risk Disclaimer
