FX.co ★ US 10-Year Yield Holds Decline

The yield on the 10-year US Treasury note hovered around 4.6% on Thursday, roughly 10 basis points lower for the week, as the partial reopening of the Strait of Hormuz weighed on oil prices, easing inflation worries and dampening expectations for more aggressive Federal Reserve tightening. Iran and Oman agreed to establish a shipping corridor through the strait, lifting hopes for stronger energy flows from the Middle East. In turn, markets scaled back forecasts for Fed rate increases this year, now pricing in just one additional hike by year-end, compared with two as recently as last week. On the data front, ADP reported that the US private sector added only 44,000 jobs in July, the weakest increase since January and well below the 70,000 expected. Separately, Fed Governor Lisa Cook reiterated that she remains ready to raise interest rates if inflation fails to continue its downward trend.