Yield curve flattens on near-term price shocks. Short-dated Treasury yields soared today after oil prices spiked on escalating tensions with Iran. President Trump reiterated that preventing Iran from having nuclear weapons is “of far greater interest and importance to me” than the cost of oil, while Iran’s supreme leader Khamenei pledged to keep the Strait of Hormuz closed. The 2-year yield closed 9 bps higher at 3.74%, while the 10-year yield closed only 3 bps higher at 4.26%. Meanwhile, Brent crude futures closed above the $100 price level for the first time since 2022. Equities sold off today, with the S&P 500 and NASDAQ down 1.52% and 1.78%, respectively.
White House begins trade probes in effort to rebuild Trump’s global tariffs. US Trade Representative Jamieson Greer announced that his office will begin investigations into over a dozen economies for excess manufacturing capacity under Section 301 of the Trade Act. These probes are required for Trump to place one-sided duties on countries determined to be using unfair trading practices. This process typically takes months to complete, though Greer shared that they plan to hold a public hearing in early May, and soon after can propose corrective policies, such as tariffs. The countries under the first round of probes include China, South Korea, India, the EU, and Mexico. In response, Chinese Foreign Ministry spokesman Guo Jiakun said, “So-called overcapacity is a false narrative, and China opposes using it as a pretext for political manipulation.”
Initial jobless claims land as expected. Unemployment benefit applications totaled 213k for the week ending March 7, coming in slightly below estimates of 215k and 1k lower than the week prior. Today’s Labor Department data also showed the four-week moving average, which smooths out weekly volatility, declined to 212k, down from the previous week’s upwardly revised 216k. Meanwhile, continuing claims, a proxy for the number of individuals receiving benefits on an ongoing basis, came in at 1.850mm, just above estimates of 1.849mm. The tame release comes after last week’s nonfarm payrolls report showed a notable and unexpected decline in US employment in February.
