Fixed Income Morning Ecconomic Report, 6-15-26

Fixed Income Markets rise as the US and Iran agree to a framework peace deal, which has led to continued and sustained pressure in the crude complex. In brief, the US and Iran have reached a framework peace agreement; the US will lift its naval blockade, and Iran will reopen the Strait of Hormuz. However, a full text has not yet been released, which has stemmed some uncertainty on a few key points.

USTs +9 ticks at 109-25+ are currently off the overnight highs having been in a 109-24+ to 111-00 range, while SFRZ6 is up 2.5bp at 96.13 having been in a 96.13 to 96.165 range but still implying a 94% chance of a hike by the year end.

Action has been facilitated by the easing of inflationary implications associated with lower energy prices along with confidence boosting SpaceX IPO which in turn, helped the stock market. From a yield perspective, there is a clear bull steepening. The US 2yr (4.03%) is eyeing the round 4.00% mark but still remains well above the levels seen pre-Iran war (3.47%). The path yields take will be subject to: a) developments heading into Friday’s signing, b) the signing itself, c) the time it takes for stockpiles to be rebuilt.

On the docket today; 7:30 am Empire State manufacturing survey June 8:15 am Industrial production May 8:15 am Capacity utilization May 9:00 am Home builder confidence index June

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