Yields climb as oil rally continues. Treasury yields rose across the curve, with the move led by the long-end as energy-driven inflation worries and US government spending concerns lingered. The 2-year yield closed 3 bps higher at 4.92%, while the 10-year yield closed 8 bps higher at 5.20%. WTI crude closed nearly 3% higher on the day, at $94.61 per barrel. Meanwhile, equities ended the day roughly unchanged, with the S&P 500 and NASDAQ down 0.02% and up 0.01%, respectively.
Trump and Xi have a “great meeting” as trade truce is extended. US President Trump and Chinese President Xi met in Washington today for the first day of their summit.The two leaders discussed AI and trade, with US Treasury Secretary Bessent also announcing an extension of the existing trade truce through January 10, 2027. Despite progress on the trade front, tensions remain surrounding technology, critical minerals, and Taiwan. Bessent later said that “some deliverables…have not been perfect on the Chinese side,” adding that he hopes to see if they “could be a bit more fulsome in enacting the agreement” going forward.
Talks resume on Strait of Hormuz reopening. The US and Iran are reportedly continuing negotiations to reopen the Strait of Hormuz in exchange for the US lifting its current blockades on Iranian ports. The conversations are taking place alongside the UN General Assembly in New York, with mediation from Qatari officials. Reopening the strait is a central topic at the General Assembly, as its closing continues to threaten oil prices and international trade. In a joint statement, a coalition of 80 countries called for the restoration of maritime navigation, with Bahrain’s Foreign Minister Abdullatif bin Rashid Al Zayani stating, “We call for the full restoration of navigational rights and principles without delay.”