Yields fall on positive US-Iran signals. Treasury yields declined today as President Trump said the US will not attack Iran again before the US midterm elections on November 3. He also cited encouraging talks with Iran, which provided some relief for oil prices. The 2-year yield closed 1bp lower at 4.76%, while the 10-year yield closed 6 bps lower at 5.23%. Meanwhile, equities slid as worries over AI spending dragged chipmaker stocks down, with the technology-heavy NASDAQ closing 1.25% lower.
Trump says the US will not attack Iran before midterms. President Trump posted on social media today that the US will not strike “Iran at any time prior to the midterm elections,” which occur on November 3. He also said that talks with Tehran have been “productive,” as both sides have exchanged proposals to end the war in recent weeks, with the agreements also aiming to reopen the Strait of Hormuz. The post came after Trump suggested earlier in the day that renewed strikes could still take place before the elections, a statement that pushed Brent crude up as much as 4% intraday to $104 per barrel before his later comments partially reversed the move.
Initial jobless claims fall to lowest since July. Initial jobless claims fell to 197k for the week ended October 3, down from an upwardly revised 199k the previous week and below expectations of 200k. The four-week moving average also declined to 198k from 200.5k. The market continues to be what is considered “low-hire, low-fire.” There is currently a shrinking labor pool, which can be attributed to retirement and reduced immigration. However, the labor market remains stable because of historically low layoffs. The FOMC minutes released yesterday said the committee “generally viewed the upside and downside risks to the labor market as broadly balanced.”
