US-Iran Tensions Spark Risk-Off Signals as Treasury Yields Spike

Global financial markets flashed risk-off signals on Monday as escalating U.S.-Iran tensions and heavy selling pressure in U.S. Treasuries caught traders off guard.

The day's developments were marked by a steepening yield curve, with the 10-year Treasury Note yield reclaiming the 5.20% level and the 30-year yield touching 5.50%, both approaching last week's highs.

The U.S.-Iran standoff has been ongoing for seven months, with the Strait of Hormuz remaining a critical chokepoint in global oil supply chains. In a phone interview with Axios on Sunday, President Donald Trump expressed hope that U.S. negotiators could hold more talks with Iran this week and revealed that the United States is helping facilitate substantial oil flows through the Strait.

However, Iranian Foreign Minister Abbas Araghchi maintained that Iran's conditions for reopening the Strait are clear: lifting sanctions on Iranian oil, ending the maritime blockade, and unfreezing assets held abroad. These demands mirror the memorandum of understanding signed in June but have been rejected by the Trump administration.