Treasuries Edge Higher but Remain in Negative Territory Amid Geopolitical Tensions

Treasuries faced early pressure on Monday but managed to recover some ground by the close of trading, though they still ended the session in negative territory. The benchmark ten-year note yield rose 2.2 basis points to 4.335 percent as bond prices fluctuated near the unchanged line before closing lower. The initial decline in Treasury prices was driven by a stronger-than-expected March jobs report, which showed non-farm payrolls increasing by 178,000 jobs, far exceeding the anticipated 51,000. This followed a revised 133,000 job loss in February, which had been initially reported as 92,000. The unemployment rate also dipped to 4.3 percent from 4.4 percent, contrary to expectations of no change. As the session progressed, uncertainty surrounding the U.S. conflict with Iran helped Treasuries regain some value. Tensions escalated after President Donald Trump issued new threats against Iran on Easter Sunday, vowing to target the country's power plants and bridges unless the Strait of Hormuz was reopened by Tuesday. While crude oil prices initially surged in response, they later retreated as reports emerged of indirect ceasefire discussions between the U.S. and Iran. Axios and Reuters both reported ongoing talks involving regional mediators, though Iran has resisted reopening the Strait as part of a temporary ceasefire. Despite these developments, the market remained cautious, with the ten-year yield closing at 4.335 percent. The mixed signals from both economic data and geopolitical events left Treasuries in a state of uncertainty, with investors closely watching for further developments in the jobs market and the Middle East.