Yields narrowly mixed as energy prices ease. Longer-dated treasury yields edged lower today as energy prices declined, with WTI crude futures trading nearly 2% lower around $102 per barrel as markets continued to weigh geopolitical risks stemming from Iran. The 2-year yield closed 1bp higher at 4.78%, while the 10-year yield closed 3 bps lower at 5.11%. Meanwhile, the S&P 500 closed 0.28% higher and the NASDAQ closed 0.02% lower today, though equities are climbing in after hours trading following strong earnings results from SpaceX.
US-Iran talks stall as threats mount. US Secretary of State Rubio today said that the US would continue to exert economic pressure on Tehran until strikes on vessels in the Strait of Hormuz end, adding that reaching a deal with Iran was proving extremely difficult. Rubio also declared that oil flows through the Strait of Hormuz were between 80 and 100% of pre-war levels, a claim which Iran denies. Also today, Iranian Major-General Abdollahi said any renewed strikes by the US would be met with a “more forceful response,” while Iranian President Pezeshkian added that his nation “does not trust America.”
US housing starts reach a four-month low. September housing starts missed expectations today, according to the US Census Bureau, falling 5.2% from last month to 1.22 million. Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis, explains, “Declining housing starts reflect the high borrowing costs and affordability challenges.” Buyer traffic in October fell to its lowest level since April 2012, according to yesterday’s NAHB survey. The slowdown in starts may help, according to Santander’s chief US economist, Stephen Stanley, who said, “Hopefully, the slower pace of starts will prevent the market from getting too far out of balance.”
