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2026-07-18 00:42:12
U.S. Treasury futures fell as the yield curve continued its flattening trend, following reports that the U.S. had deployed dozens of additional aerial refueling tankers to Israel ahead of a potential escalation of military action. The decline was concentrated at the front of the yield curve, narrowing the spread between 2-year and 10-year Treasury yields by approximately 3 and 2 basis points respectively, both hitting intraday lows. The 2-year Treasury yield rose about 2 basis points from Thursday's close, while longer-term yields fell slightly. Overnight index swaps (OIS), linked to the Fed's meeting date, showed the market had priced in a 4-basis-point premium for a rate hike at the July meeting, roughly unchanged from earlier in the day; the market expects a cumulative rate hike of about 30 basis points by December, higher than the 27 basis points estimated at Thursday's close.
