Yields rise as US-Iran tensions flare. Longer-dated treasury yields rose today as energy-driven inflation concerns took focus, with oil prices rallying as strikes between the US and Iran restarted for the first time in a month. The 2-year yield closed nearly flat at 4.34%, while the 10-year yield closed 3 bps higher at 4.75%. WTI crude closed nearly 3.50% higher, settling at around $86 per barrel. Meanwhile, equities fell on the renewed geopolitical tensions, with the S&P 500 and NASDAQ closing 0.33% and 0.12% lower, respectively.
Attacks in the Middle East resume. Over the weekend, the US struck two Iranian missile launchers, with the US military stating it was in response to “minelaying forces posing an imminent threat in the Strait of Hormuz.” Iran then launched retaliatory attacks on military bases belonging to the US and its allies in Jordan and the United Arab Emirates. Anwar Gargash, a senior diplomatic adviser to the UAE president, wrote, “The state of neither war nor peace cannot be a sustainable solution, just as the policy of targeting the Arab Gulf states and Jordan has proven to be a failure…What is needed today are realistic and sustainable political solutions…” Gargash went on the explain that solutions for the conflict should involve “returning navigation in the Strait of Hormuz to its normal state.”
July JOLTS data expected to show third straight month of declining vacancies. JOLTS data releasing tomorrow morning is forecasted to show job openings at 7.31 million, down slightly from the prior period’s 7.36 million. If the print lands as expected, it would mark the third consecutive monthly decline. The JOLTS quits rate, measuring people who voluntarily leave their jobs, is expected to remain at 2%, while the layoffs rate is forecasted to hold steady at 1.1%. The report follows recent jobless claims data that have remained low, a sign that companies are struggling to hire workers. Tomorrow’s data comes ahead of Friday’s August nonfarm payrolls report, which will be closely watched ahead of the September FOMC meeting.
