Key insights
- The 10-year Treasury yield rose amid ongoing monitoring of the Iran war developments and economic data assessment. Trump's extension of the pause on energy facility attacks provided a temporary reprieve, but oil prices continued to climb. Consumer sentiment data was slightly below expectations. The slight rise in yields and oil prices could exert mild upward pressure on inflation expectations, potentially influencing future Fed policy decisions.
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The 10-year Treasury yield traded higher on Friday as investors continued to monitor developments in the Iran war and assess economic data.
The yield on the benchmark 10-year Treasury was more than 3 basis points higher at 4.45%. The 2-year Treasury yield was more than 1 basis point lower at 3.965%, while the yield on the 30-year Treasury was up by 4 basis points to trade at 4.976%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
In a Thursday Truth Social post, President Donald Trump said he would extend a pause on energy facility attacks by a further 10 days to allow time for talks on a peace deal. The suspension will now expire on April 6, Trump said, adding that "talks are ongoing and … they are going very well."
Oil prices continued to rise on Friday, with Brent crude futures gaining 2% to trade above $110 a barrel, while West Texas Intermediate futures rose by 3% to above $97 a barrel.
In a Friday morning note, Deutsche Bank's Jim Reid said a "kneejerk reaction" in oil markets after Trump's post on Thursday had been fleeting, with Brent now trading "within touching distance of the level it was at before Trump's post."
"While the delay might reduce some of the immediate escalation risk, it offers no new visibility on the path towards resolution, given Iran's denials over talks, and while the Strait of Hormuz remains largely closed," he said.
Meanwhile, consumer sentiment data from the University of Michigan was nearly in line with expectations, as the Survey of Consumers for the end of March showed a reading of 53.3. Economists polled by Dow Jones had estimated 54.0.