The yield on the US 10-year Treasury note declined for a third straight session on Tuesday, slipping to 4.62%, its lowest level in about a week, as softer oil prices continued to bolster demand for government bonds. A ceasefire between the US and Iran appeared to be holding, while ongoing talks involving Saudi Arabia and Oman about the future of the Strait of Hormuz remained in focus.
Attention is also shifting to the Federal Reserve’s two-day FOMC meeting, which begins today. The Fed is widely expected to leave the federal funds rate unchanged at tomorrow’s policy decision, with markets assigning roughly a 35% probability to a rate cut. Traders will closely watch the distribution of votes for signals on the likelihood of a September cut, which is currently priced in at around 80%.
