FX.co ★ US 10-Year Yield Holds Decline

The yield on the US 10-year Treasury note hovered near 4.11% on Tuesday, after climbing as high as 4.21% in the previous session, as falling oil prices helped ease concerns about a renewed pickup in inflation. The US crude benchmark slipped back below $90 a barrel after President Donald Trump indicated that the Iran war is nearing its end and outlined plans aimed at keeping oil prices contained.

G7 finance ministers said the group “stands ready” to release oil from strategic reserves if necessary, though no concrete steps have been taken so far. The pullback in inflation fears has revived expectations that the Federal Reserve could lower interest rates in July and again in September, with markets currently pricing in roughly two 25-basis-point cuts this year.

Looking ahead, investors are focused on Wednesday’s release of the February CPI report and Friday’s publication of January’s PCE price index for further signals on the inflation trajectory, although neither data set is expected to fully capture the economic impact of the Iran war.