The ceasefire between Israel and Lebanon triggers a buying spree in US Treasuries, while employment data is ignored by the market.

汇通财经2026/06/04 13:39

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The US Treasury market held onto the buying interest built overnight as Israel and Lebanon agreed to a ceasefire. This news raised hopes for progress in the US-Iran peace agreement, with Trump hinting that a deal could be reached soon. Oil prices and yields both declined and remained at these levels.
Data released on Thursday showed an increase in layoffs, with initial jobless claims unexpectedly rising to 225,000. First-quarter productivity growth was revised down to 0.3%, but the 1.8% rise in unit labor costs indicated no wage inflation pressure. Treasury market participants reacted mildly to these figures.
Interest rate expectations shifted, with the probability of a 25 basis point rate hike in September falling from 26% to 22.0%, and the probability of a December hike dropping from 41.3% to 48%. Short covering by commodity trading advisors dominated trading activity, and hedge funds moderately bought after the data release.
At the front end of the curve, there was buying from bank proprietary desks, while longer-duration cash and futures saw mortgage-related selling. In addition, six new investment-grade bond issues led to rate-hedging related paying/selling, but overseas spec accounts and real money accounts absorbed and adjusted positions against these sell orders ahead of Friday's employment report.

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The ceasefire between Israel and Lebanon triggers a buying spree in US Treasuries, while employment data is ignored by the market.

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