FX.co ★ US 10-Year Yield Holds Decline

The yield on the US 10-year Treasury note hovered around 4.47% on Friday, after falling about 10 basis points in the previous session. The decline followed comments by President Donald Trump, who said a peace agreement with Iran could be signed as early as this weekend in Europe. His remarks triggered a sharp drop in oil prices, easing worries about stubborn inflation and the likelihood of further interest rate hikes by central banks.

At the same time, data released on Thursday showed that US producer prices rose 6.5% year-on-year in May, the highest level since November 2022 and slightly above the consensus forecast of 6.4%. The figures underscore the mounting impact of the Middle East energy shock. Combined with earlier data indicating that consumer inflation has accelerated to a three-year high, the latest PPI reading is expected to strengthen market expectations that the Federal Reserve may raise interest rates this year.