Yields rise as Iran peace prospects sour. Treasury yields climbed alongside energy prices today as the US and Iran failed to reach a peace deal to end the war, with Trump saying the ceasefire was in a weak spot. The 2-year yield closed 7 bps higher at 3.95%, while the 30-year yield closed 5 bps higher at 4.99%. Brent crude climbed over 3% to now trade around $104 per barrel. Despite the negative news on the war front, equities inched higher, with the S&P 500 and NASDAQ closing 0.19% and 0.10% higher, respectively.
Trump says US-Iran ceasefire is on “massive life support.” Iran responded to the latest US peace proposal over the weekend with demands for war reparations, an end to American sanctions, and recognition of Iranian sovereignty over the Strait of Hormuz. President Trump called Tehran’s proposal “TOTALLY UNACCEPTABLE,” though he did not elaborate further. Meanwhile, Indian Prime Minister Modi urged his citizens to conserve fuel as US gas prices are now averaging over $4.50 per gallon, roughly $1.50 higher than before the conflict began. Control of the Strait of Hormuz is expected to be a key topic when Trump meets with Chinese President Xi later this week, given China’s heavy reliance on the critical shipping lane.
Existing home sales inch up from nine-month low. Existing US home sales rose to 4.02 million in April on an annualized basis, slightly below expectations of 4.05 million. The print was an increase from 3.98 million in March, which marked a nine-month low. The Midwest and South posted increases in contract closings, while the West dropped to a three-month low. This comes as mortgage rates and selling prices remain elevated, with the median selling price up 0.9% from a year prior. Existing home inventory climbed to 1.47 million, though Lawrence Yun, NAR chief economist noted that, “Even though it’s the highest inventory post-Covid, we are not close to the pre-Covid April inventory of 1.83 million.”
