US-Iran Negotiations Stall, Oil Prices and Yields Climb

Oil prices and US government bond yields climbed on Tuesday as investors assessed that the negotiations between Washington and Tehran have stalled.

The US president demanded payments from Iran covering American citizens killed or injured in attacks linked to Tehran over several decades, including the USS Cole bombing in 2000. Iranian representatives maintain that the Strait of Hormuz will remain closed until Washington removes its naval blockade, lifts sanctions, and unfreezes Iranian assets.

The nearest-dated Brent contract hovered near $89.8 per barrel, while West Texas Intermediate traded around $84.2, each gaining roughly 2.5%. The US debt market mirrored this sentiment, with yields advancing across the curve during a modest global sell-off: the two-year note surpassed 4.25%, the ten-year exceeded 4.7%, and the thirty-year topped 5.27%.

Futures markets now assign nearly even odds to a Federal Reserve rate hike in September, with July inflation figures scheduled for release on Wednesday. The deliberate slowdown in US-Iran talks reflects President Donald Trump's apparent preference for a more measured strategy recently, describing it as 'low-key' and indicating that Washington is willing to let Iran's inflation and depleted finances exert pressure.