Live Updates > Live Update Details
2026-04-08 20:02:21
[Iranian Ceasefire Triggers Market Rollercoaster, US Treasuries Surge Amid Hedging Pressure] ⑴ Iran and the US reached a two-week ceasefire agreement, just two hours before a potential large-scale US attack. This news caused a sharp drop in US Treasury yields across the board. The 2-year yield plummeted 11.6 basis points to 3.717%, and the 10-year yield fell 10.9 basis points to 4.234%. The yield curve continued to steepen, with the spread between the 2-year and 30-year yields widening by 4 basis points to 112.8 basis points. ⑵ The swap market opened with violent fluctuations, with spreads across all maturities widening significantly. The 2-year swap spread was at -17.25 basis points, and the 10-year swap spread was at -43.75 basis points. The steepening of the yield curve coincided with the plunge in money market rates. Investors in a Fed rate cut were significantly reduced, with SOFR futures leading the market, further exacerbating the steepening of the swap spread curve. (3) Oil prices plummeted by over 13%, marking the largest single-day drop since the pandemic began. Brent crude oil closed at $94.17, gold plunged over 16%, the US dollar index fell 1.04% to 98.823, and global stock markets rebounded sharply, with the Nikkei 225 surging 5.39% and the German DAX rising 4.72%. (4) The rally in US Treasuries encountered resistance in the London afternoon session, as the overnight rebound attracted traders to hedge against today's $39 billion 10-year Treasury bond rollover, leading to a selling bias in the morning. However, large short covering by CTAs before the CME opened quickly pulled prices back up, and the continued decline in oil prices provided support for the bond market. If yields remain low, large borrowers who have already released their Q1 earnings reports may take advantage of the situation to issue bonds, increasing swap purchases.
