Daily Market Color April 25, 201810-Year Yield North of 3% Oil Up On Iran Uncertainty Despite an initial selloff on stronger than expected growth of US crude stockpiles in a report from the Energy Information Administration (EIA), WTI crude oil futures closed the day higher at $67.82 a barrel (+0.2%). The EIA report reflected a 2.17 million barrel increase in stockpiles, almost twice the 1.1 million that the American Petroleum Institute reported over the same period. According to the EIA, crude supply was up 429.7 million barrels last week as crude exports jumped to their highest level ever recorded. While French President Macron has been working to save the current Iran nuclear deal, his direct appeal to President Trump on his recent state visit both failed to change President Trump’s position and at the same time, left some of his European allies surprised. May 12th is the due date for the United States to make a decision on renewed sanctions for Iran. Dollar Higher on Rates With the European Central Bank meeting tomorrow and expected to leave rates unchanged, the US Dollar (USD) continued it’s climb. Against other major currencies the dollar rose to a 15 week high, up 0.4%. The Dollar was up 0.5% vs the Euro (EUR), 0.3% vs the Pound (GBP) and 0.5% vs the Yen (JPY). These moves continue to be driven by the fundamental connection between risk-free rates and the foreign exchange market, as the front end of the US Treasury curve is up significantly and nearing levels unrealized since 2008. As this risk-free rate drives borrowing costs higher, it also attracts shorter term investment from overseas and pushes the USD higher when cash is leaving countries with lower risk free rates. 10 Year Remains Above 3% Yield Major US stock indices were mostly unchanged on the day as the market continues to digest the implications of a greater than 3% yield on the 10 year US Treasury note. All three major indices closed within 0.25% of where they opened the day, with the DJIA and S&P gaining 0.25% and 0.18%, respectively, and the NASDAQ losing 0.05. In spite of this, the NASDAQ may have been the biggest winner of the day with Facebook posting stronger than expected earnings after the close, and the stock trading higher after hours. US Treasurys sold off on the day, as yields/swap rates were up 1-3bps across the curve. The 10-year note yield was up on the day (+3 bps) and finished at 3.03% — its highest closing level in four years.