US Treasuries fell as an earlier surge in oil prices fanned concern about inflation, with tensions between Israel and Iran escalating over the weekend. US Treasuries are down since tensions between Israel and Iran turned into a direct conflict on Friday, and selling pressure is likely to have a lasting effect if past episodes of clashes are any guide. Iran’s direct strikes in April 2024 and another flare-up between the two nations in October had also pushed up US yields rapidly and kept them elevated over the next 30 days. While the respective moves aren’t trend-altering by any means, they are likely to be enough to support the $US Dollar around its 3-year lows, weighing on some commodity prices in the process, like Gold.
- We can see elevated US bond yields supporting the $US Dollar and weighing on gold prices over the coming weeks.
MM is bullish US 10s (bearish yields) in the $US long term
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