Mixed US-Iran news fuels choppy session. Treasury yields traded within a 6 bp range today as markets digested conflicting messaging regarding US-Iran peace negotiations. The 2-year yield fell 5 bps into the close and ultimately declined 3 bps on the session to 4.04%, while the 30-year yield closed 1bp higher at 5.12%. Meanwhile, equities declined, though the move partially reversed on reports that the US will not attack Iran tomorrow, with the S&P 500 and NASDAQ down 0.07% and 0.51%, respectively.
Trump calls off strike as Gulf states urge diplomacy. President Trump said on social media today that he called off tomorrow’s planned strike on Iran after Saudi Arabia, Qatar, and the UAE appealed for more time to pursue a diplomatic solution. Trump added that “serious negotiations are now taking place,” but said the US would strike if a deal is not reached, though he did not set a deadline. Oil prices eased from intraday highs on Trump’s comments and hopes of renewed negotiations. However, both Tehran and the White House rejected each other’s latest peace proposals. According to the White House, Iran’s proposal did not include detailed steps for giving up its enriched uranium stockpiles. Tehran, meanwhile, maintains that the US should pay reparations for the war.
China reaches agreement to purchase US farm goods, set up investment board. Following President Donald Trump’s meeting with Chinese leader Xi Jinping last week, Trump announced that China has agreed to buy at least $17 billion of American farm products each year through 2029 and set up trade and investment boards. The boards will work together to “optimize” trade and oversee issues related to “non-sensitive goods.” On Saturday, Beijing’s Commerce Ministry also said that both nations have agreed to a series of measures, such as cutting tariffs on certain products, though the specifics remain unclear as the two sides are still finalizing negotiations.