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U.S. Treasury yields rose slightly on Monday after a dramatic weekend in which a two-week cease-fire was set to expire on Tuesday and the Strait of Hormuz was reopened and then blocked by Iran.
The yield on the 10-year Treasury note, a key measure of U.S. government borrowing, rose more than 1 basis point to 4.262%.
The yield on the two-year Treasury note, which is more closely tied to the Federal Reserve’s short-term interest rate policy, rose more than 2 basis points to 3.725%. The yield on the 30-year Treasury note rose less than 1 basis point to 4.892%.
One basis point equals 0.01%, and yields and prices move in opposite directions.
On Friday, Iran declared the Strait of Hormuz fully open to commercial traffic, and oil prices fell by more than 10%. Hopes that the artery would be fully opened quickly collapsed as Iran regained control of the choke point by Saturday after President Trump refused to allow the US to lift the blockade of Iranian ports.
After a tumultuous weekend, US President Donald Trump said US and Iranian negotiators would resume talks in Islamabad, Pakistan, on Monday. However, Esmail Bacaei, a spokesman for Iran’s foreign ministry, said, according to Reuters, “There are currently no plans for a second round of negotiations with the United States.”
“Last week’s market excitement over the reopening of the Strait of Hormuz appears to have been premature,” said Russ Mold, investment director at AJ Bell. “The events of the weekend have made the ceasefire between Tehran and Washington more fragile than ever.”
Later this week, investors will monitor weekly crude oil inventories and unemployment claims.
—CNBC’s Anniek Bao also contributed to this report.
