Trump's Comments Ease Pressure on Bond Yields, Boost Stocks
US President Donald Trump's suggestion that US attacks against Iran would be short-lived has eased pressure on bond yields, boosting stocks and oil prices.
The move, which came after a hawkish speech by Federal Reserve boss Kevin Warsh, sent crude prices rallying as much as 10 percent in the Strait of Hormuz. However, with Trump's comments indicating that the latest round of strikes could be over soon, oil prices snapped their recent rally to drop more than one percent.
Yields on 10-year US Treasuries and Japanese government bonds of the same length both dipped, while the yen extended gains after a spike Wednesday fueled speculation of fresh intervention by authorities. The currency strengthened to 158.22 per dollar, having sat above 160 earlier in the day.
The soft US economic data, including August private jobs creation coming in below expectations, also provided support and gave the bond market a reason to ease up on hiking borrowing costs. However, investors are still keeping tabs on Tokyo after a spike in the Japanese yen stoked speculation of more intervention by authorities.