Yields decline on renewed peace deal optimism. Treasury yields fell overnight as a conditional ceasefire between Israel and Lebanon created hope that the US and Iran are closer to a peace deal of their own. Yields ultimately closed 2-4 bps lower across the curve, with the 2-year yield at 4.04% and the 10-year yield at 4.47%. Meanwhile, equities were mixed today, with the NASDAQ down 0.09%, as Broadcom Inc. plunged 12.6% on a weak outlook, while the DJIA closed up 1.73% at a new all-time high.
US-Iran ceasefire remains in flux. The US and Iran continue to give conflicting signals on negotiations, with President Trump saying talks were in the “final” stages and Iranian Foreign Minister Araghchi citing “no tangible progress.” Separately, the US helped broker an Israel-Lebanon ceasefire announced last night, though it was rejected by Hezbollah shortly thereafter and strikes in the region continue. An enforced Israel-Lebanon ceasefire is a crucial step toward a US-Iran deal, as an end to Israeli fighting in Lebanon is one of the conditions Iran has set. Despite this, oil prices eased today, with WTI crude trading around $93 per barrel.
Initial jobless claims rise above expectations. Initial jobless claims came in at 225k for the week ending May 30, above estimates of 215k and the prior week’s downwardly revised 212k, marking the highest level since February. The four-week moving average rose to 215k from 208k in the prior period, also the highest since February. Continuing claims fell to 1.78 million for the week ending May 23, slightly below expectations. Today’s print follows the Memorial Day holiday, which often introduces volatility into jobless claims data.
