Bond yields jump, oil extends gains as US-Iran ceasefire expires

US bond yields surged to record highs on Tuesday after the expiration of a US-Iran ceasefire, while oil prices continued their upward trend for the third consecutive day. The yield on the US 30-year Treasury bond reached an intraday high of 5.321%, its highest in almost 20 years, while the 10-year bond increased by 0.4 basis points to 4.724%.

Analysts noted that such a move above 4.65% for the 10-year bond has historically been followed by statements from the Trump administration about resolving the Iran war, but this time there were no such assurances. The 60-day truce between the US and Iran ended, leading markets to lose early gains in Asian trade as stocks in Taiwan and China weighed on the benchmark.

Brent crude futures rose 0.4% to $91.20 a barrel, with the focus on the increase and persistence of longer-end developed market yields, particularly a steady sell-off in US Treasuries. The S&P 500 slipped 0.5% and the Nasdaq Composite edged 0.3% lower as US economic data, including a drop in retail sales, led traders to reduce expectations of an imminent Federal Reserve interest rate move.

Gold prices dropped 0.3% at $4,402.89, ending a two-day winning streak, and Bitcoin and Ether both declined 0.3% at $64,159.76 and $1,899.34, respectively.