Trump Rejection of Iran Proposal Sends Oil Higher, Treasury Yields Rise
Oil advanced in Asian trading after Trump rejected Iran’s plan to reopen the Strait of Hormuz, while Treasury selling resumed amid renewed inflation concerns.
Oil prices moved higher in Asian trading Monday after President Donald Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, renewing selling in U.S. Treasuries and raising inflation concerns.
The two-year Treasury yield, which is sensitive to interest-rate expectations, climbed 5 basis points to 4.90%. The 10-year yield rose 4 basis points to 5.20%.
Government bonds in Japan and Australia also declined during the session, extending a broader fixed-income selloff. U.S. Treasury yields had already reached multiyear highs last week as markets focused on recent Federal Reserve policy signals and decisions.
Oil prices remaining above $100 a barrel were identified as a key factor behind bearish sentiment toward bonds, alongside the Federal Reserve’s continued hawkish signals. Higher energy costs can add to inflation pressure and complicate expectations for interest rates, keeping attention on the relationship between developments around the Strait of Hormuz and U.S. markets.
