Rates Spark Flip the Gaze From China Back to Iran

US and Euro bond markets are in a holding pattern as focus returns to Iran-related geopolitical risks and elevated inflation markers. While technical levels like 4.5% for the US 10Y are acting as 'buy' signals, a breakout could trigger significant upward yield pressure.

Key Takeaways

• 1.US Treasury 10-year yields are testing the 4.5% resistance level, driven by inflation concerns and the geopolitical standoff with Iran.
• 2.Euro rates remain in a tight holding pattern with the 10Y swap rate between 3.0% and 3.1%, though risks to growth remain significant due to geopolitical turmoil.
• 3.Short-end rates are currently decoupled from fundamental policy and are being driven almost exclusively by oil price fluctuations.

Table of Contents

• Rates Spark: Flip the gaze from China back to Iran
• Treasuries on a holding pattern, but still tilted with an upside bias to yields
• Euro rates stable in the very near term but face an uncertain outlook
• Friday's events and market view
• Author
• Disclaimer

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