Overview
- U.S. government bond yields edged lower Tuesday after Monday’s jump, with the 10-year near 4.42% and the 2-year around 3.94% in early trade.
- Monday’s surge followed President Trump’s ‘Project Freedom’ plan to guide commercial ships through the Strait of Hormuz and Iran’s vow to respond to U.S. threats.
- Conflicting reports about an Iranian strike on a U.S. warship added to the risk premium, as Iranian media claimed a hit and a U.S. official quoted by Axios denied it.
- Oil prices, which rose Monday, traded near $103.63 Tuesday after a 2.6% drop, reflecting shifting views on supply risks in the Hormuz choke point for global crude shipments.
- Investors now turn to the JOLTS report, the ISM services gauge, and Friday’s payrolls for signals on growth, inflation pressures, and the likely direction of Federal Reserve policy.