Short-dated yields rise on elevated oil prices. The yield curve flattened today, with the front-end of the curve climbing alongside energy prices on continued geopolitical concerns. Pakistan expects that Tehran will submit an updated proposal over the next few days following the previous edition that the White House reviewed yesterday. The 2-year yield closed 4 bps higher at 3.84% while the 30-year yield closed 1bp lower at 4.93%. Brent crude is now trading above $111 per barrel, rising for the seventh consecutive session. Meanwhile, equities slid on renewed AI-spending concerns, following a report that OpenAI missed its sales goals. The S&P 500 and NASDAQ closed 0.49% and 0.90% lower, respectively.
Consumer confidence inches higher on jobs outlook. The Conference Board gauge of consumer confidence came in at 92.8 in April, above the 89.0 forecast and March’s upwardly revised 92.2. This marks the highest level of 2026 and likely reflects signs of a stabilizing labor market, as hiring ticked up in March. The share of survey respondents who expect employment opportunities to improve over the next six months rose to a four-month high, while consumers also grew more optimistic about their income prospects. Despite the unexpected increase in headline consumer confidence, overall levels remain historically subdued and follow last week’s University of Michigan consumer sentiment report, which posted an all-time low.
BOJ holds rates steady on split vote. The Bank of Japan voted 6-3 to keep its benchmark rate steady at 0.75% today, the biggest divide seen under Governor Kazuo Ueda. In the post-meeting press conference, Ueda explained that he sees less likelihood that Japan will meet the BOJ’s previous economic projections. He said, “If I were to sum up the main reason for stand-pat in one sentence, it’s that the certainty of meeting our baseline outlook has declined quite significantly at this time.” The BOJ decreased its economic growth forecast by 50% to 0.5%, though Ueda left the door open for future rate hikes if inflation risks increase and Japan avoids an economic downturn. Futures markets are currently pricing in a ~66% chance of a rate hike at the BOJ’s next policy meeting in June.
