U.S. Treasury yields fell after stronger-than-expected economic data signaled a potential recovery in job markets, despite concerns over the Iran nuclear deal's impact on inflation and global uncertainty. The 10-year T-bond surged to 4.687%, reflecting market optimism amid renewed interest in fiscal policy, while the 30-year bond saw a 5.197% peak, signaling heightened geopolitical risks. Analysts noted that the 2-year T-note declined by 4.2 bps, underscoring mixed signals between inflationary pressures and economic growth expectations. A closely watched part of the yield curve, measuring the gap between 2- and 10-year notes, reached 50.9 bps, indicating elevated risk sentiment. Investors are now weighing the likelihood of a Fed rate hike in December (56.3% chance) against maintaining rates in June (94.2% chance), with Molly Brooks from TD Securities highlighting a cautious outlook. The upcoming $19 billion TIPS auction promises further stabilization in inflation-linked securities.
