Yields rise as inflation worries linger. Treasury yields edged higher, alongside oil prices, following attacks on energy infrastructure in Saudi Arabia over the weekend and American attacks on Iran’s Kharg Island today. The 2-year yield closed 3 bps higher at 4.39%, while the 10-year yield closed 1bp higher at 4.79%. WTI crude closed nearly 2% higher, settling around $93 per barrel. Meanwhile, equities fell on the renewed attacks, with the S&P 500 and NASDAQ closing 0.58% and 0.32% lower, respectively.
US and Iran exchange strikes. The US military struck five oil tankers tied to Iran’s Revolutionary Guard today, following unsuccessful Iranian attempts to strike a US warship over the past several days. US Central Command said crews on the targeted vessels were directed “to abandon ship before the vessels were struck and rendered inoperable.” In response, Tehran vowed to continue targeting US bases in the Middle East. Separately today, Iran-backed Houthi militants struck oil facilities in Saudi Arabia, which retaliated with strikes of its own. The renewed tensions in the region sent oil prices climbing, with Brent crude hitting $97 a barrel, marking a seven-week high.
Canadian counter-tariffs take effect. Canada’s retaliatory tariffs on American goods went into effect today, following the 50% levies on $20 billion of Canadian goods that the US implemented on August 22nd. Canadian Prime Minister Mark Carney released a statement today, saying, “our tariffs are necessary to protect our workers, protect our companies and protect our communities.” The tariffs include a 15-50% increase on a variety of American goods, from steel to dairy to furniture and appliances. A spokesperson for the Canadian minister responsible for bilateral US trade shared, “Canadian and American officials have maintained ongoing discussions on a range of issues, although formal trade negotiations are not taking place at this stage.”
