US Yields Edge Lower as Iran Hopes Persist

US Treasury Yields Edge Lower on Iran Hopes

U.S. Treasury yields were little changed on Wednesday, holding on to the prior day's declines amid continued hopes that Washington and Tehran are moving toward an agreement ending their three-month-old conflict.

5-Year Note Auction and Economic Data

The U.S. Treasury auctioned $70 billion in 5-year notes in the afternoon, with investor demand up marginally but in keeping with longer-term trends at 2.34 times the notes on sale.

Investors are also awaiting Thursday's releases of key U.S. economic data on inflation, durable goods and first-quarter economic growth. Several members of the Fed's policy setting committee were due to speak later Wednesday.

Iran Deal and Market Impact

U.S. and Iranian negotiators have been meeting discussing a potential end to the three-month war that has constrained the global oil market, lifting fuel costs and inflation around the world. However, U.S. President Donald Trump on Wednesday dismissed Iranian state television's reports of a framework deal to restore shipping through the Strait of Hormuz within a month and lift a U.S. naval blockade.

Treasury Market Indicators

The yield on the benchmark U.S. 10-year Treasury note was last down 1.4 basis points to 4.477%. The yield on the 30-year bond fell 1.6 basis points to 5.009%. The two-year U.S. Treasury yield fell 1.7 basis points to 4.033%.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes was at a positive 44.2 basis points.