[MARKET ANALYSIS] Treasury futures rebounded and yields softened amid US-Iran peace hopes

The rebound in Treasury futures and the softening of yields signal a risk-on sentiment linked to renewed US-Iran peace discussions.

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[MARKET ANALYSIS] Treasury futures rebounded and yields softened amid US-Iran peace hopes

[MARKET ANALYSIS] Oil retreats on hopes regarding US-Iran talks as the sides could be headed for another in-person meeting this week

UK Deputy PM Lammy meets with US VP Vance in Washington and urges Iran ceasefire to hold, while he stresses free shipping through the Strait of Hormuz

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USTs: +2.5 ticks

  • Marginally extended on yesterday's rebound after yields reversed this week's initial upside, as diplomatic efforts to revive peace talks continued, while US President Trump said the US had been called by the other side, which wants to make a deal very badly.

Bunds: +41 ticks

  • Remained firmer and returned to the 125.00 level after clawing back recent lost ground, while further upside is capped ahead of supply, including EUR 5bln of Bobls later today, followed by EUR 3bln of Bunds tomorrow.

JGBs: +12 ticks

  • Tracked the recovery in global peers but with the gains limited amid a lack of tier-1 data for Japan and as the latest 20yr JGB auction looms.
Context

This development suggests a positive shift in market sentiment, which could influence rate expectations and broader fixed income positioning. Additionally, the uptick in Bunds and JGBs indicates that global bond markets are responding similarly, though capped by upcoming supply concerns in Europe and limited domestic catalysts in Japan.

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