The yield on the US 10-year Treasury note hovered near 4.63% on Wednesday, holding around a two-month high as persistent tensions between the US and Iran drove oil prices higher and intensified concerns about inflation and interest rates. President Donald Trump also played down the prospect of near-term talks with Iran, while Iran-backed Houthi rebels in Yemen continued to disrupt shipping in the Red Sea. At the same time, a series of attacks on the Caspian Pipeline Consortium terminal on Russia’s Black Sea coast further stoked worries over crude supply.
On the economic front, ADP data showed that US private employers added an average of 16,500 jobs per week over the four weeks ending July 4, down from a weekly average of 19,250 in the previous four-week period, marking the fourth consecutive slowdown in hiring. Markets largely expect the Federal Reserve to leave interest rates unchanged at next week’s meeting, while futures pricing implies more than a 55% probability of a rate hike in September.
