Fixed Income Morning Report 4-21-26

Focus has been on the volatile geopolitical environment, with attention on developments surrounding US-Iran second round talks. Initially, there were reports via a Pakistani source which suggested that the US-Iran delegation teams had arrived in Islamabad, however, Iranian State TV pushed back on these claims calling them “baseless” – they said that Iran “has not yet sent a delegation”. Markets will await how this unfolds, ahead of the expiration of the US-Iran ceasefire on Wednesday.

USTs are lower by around 3 ticks and currently within a 111-17 to 111-22+ range. Ultimately moving at the whim of energy price fluctuations, with a recent bout of pressure in the benchmark after the Iranian side pushed back on reports that a delegation had arrived in Pakistan. Geopols aside, US March retail sales are the main focus (exp. 1.4% M/M, prev. 0.6%), alongside the weekly ADP employment change and the Atlanta Fed GDP. Elsewhere, Fed’s Waller is on the docket, though will not touch on monetary policy given the Bank is on blackout; Kevin Warsh’s senate hearing is also due. From a yield perspective, the curve is a touch steeper this morning; the 2yr currently resides around 3.73%. A positive outcome from the second round of talks could see the 2yr breach back below the 3.70% and approach near-term lows at 3.67%.

on the docket today; 7:30 am U.S. retail sales March 7:30 am Retail sales minus autos March 9:00 am Business inventories Feb. 9:00 am Pending home sales March