US Treasury yields retreat as Iran deal hopes pull WTI lower

US Treasury yields edged lower on Tuesday, following news that Washington and Tehran may be nearing a deal, while another report said that US-Iran talks are ongoing and that a deal is not yet finished.

US 10-year yields ease toward 5.12% as diplomatic optimism and weak housing data weigh

US bond yields edged lower, weighed by the recovery of the US equity market. The US benchmark note, the 10-year Treasury yield, dives nearly 2 basis points to 5.123%, initially dragged lower by geopolitical news that pushed energy prices lower. West Texas Intermediate (WTI), the US crude Oil benchmark, loses 0.67% at $97.58 per barrel.

The US Dollar Index (DXY), which measures the buck’s performance against a basket of its peers, is down 0.32% at 101.66.

US Pending Home Sales in September tumbled -7.3%, below estimates of -0.5%, blamed on rising mortgage rates. Looking ahead, the US economic docket will feature the release of Initial Jobless Claims data on October 22, followed by S&P Global Flash PMIs on October 23.

The US 2-year Treasury yield, which is the most sensitive to interest rate expectations, is flat at 4.789%.

Money markets priced in the Federal Reserve holding interest rates at its October meeting. However, for the December meeting, it remains at 89%, according to Prime Terminal.

US 10-year Treasury note yield chart – Daily