Bond Market Update

Iran Retaliates

• Treasuries have benefited from a safe-haven bid and some rate-cut hopes after Fed Governor Bowman said she could support a rate cut in July if inflation pressures remain contained.
• Recent press reports indicate Iran has fired missiles at a U.S. base in Qatar. President Trump said previously that if Iran struck back at U.S. forces, it would face more force than what it faced with the strikes on its nuclear facilities.
• It is now a wait-and-see situation to see how the U.S. responds.
• Notably, WTI crude futures are down 2.3% to $72.14/bbl, presumably on the belief that Iran's choice to strike bases in Qatar means it is not thinking of clising the Strait of Hormuz
• Yield check:
  • 2-yr: -7 bps to 3.84%
  • 3-yr: -7 bps to 3.79%
  • 5-yr: -7 bps to 3.89%
  • 10-yr: -7 bps to 4.31%
  • 30-yr: -5 bps to 4.84%