Hormuz Ship Ban Lifts Crude, U.S. Yields, and Fed Hike Bets
A new Oman-Iran deal banning U.S. and Israeli vessels from the Persian Gulf pushed crude oil prices higher, triggering a rise in U.S. Treasury yields and fueling expectations for further Federal Reserve rate increases.
U.S. Treasury yields climbed along the curve as a deal between Oman and Iran took effect, prohibiting American and Israeli military and civilian ships from entering the Persian Gulf. The agreement stoked supply concerns in oil markets, sending crude prices higher and adding to inflation pressures.
Higher energy costs come just as traders await the latest U.S. employment data, which could shape the near-term policy path. The combination of geopolitical uncertainty and rising commodity prices has revived bets that the Federal Reserve may need to keep raising interest rates.
Yields on benchmark 10-year notes rose sharply, while shorter-dated yields also advanced, reflecting increased conviction in further rate hikes.
Source: FXStreet Forex News