Analyst: The breakdown of US-Iran talks has rooted uncertainty, and the US dollar will strengthen in the short term

Golden Ten Data reported on April 12 that Pepperstone strategist Dilin Wu stated that the failure of the US and Iran to reach an agreement has kept uncertainty firmly entrenched. In a very short period of time, the strengthening of the US dollar accompanied by a slight decline in US Treasury yields is a fairly reasonable pricing result. Once the initial impact from the news subsides, the reaction in US Treasuries could become more complex. Short-term yields may still edge lower due to safe-haven demand, but if oil prices continue to rise, higher inflation expectations will soon be re-anchored, generating new upward pressure on long-term yields. On Monday, it is also likely that the energy and defense sectors will outperform the market, with a significant upward gap at the opening. The energy sector is the most direct beneficiary of supply-side tightening, while the defense sector reflects a rise in geopolitical risk premiums and their more persistent nature. However, the volatility of the market trend will depend on two key factors—the sustainability of higher oil prices and whether the market confirms that this is a lasting supply shock rather than just a brief, sentiment-driven reaction.