"Easing geopolitical tensions in the Middle East alleviated immediate inflation concerns and reduced expectations for a more cautious monetary policy, stabilizing Treasury yields ahead of key political developments."
"Continued tensions in Lebanon and persistent disruptions in the Strait of Hormuz highlight the fragility of the current truce, contributing to a cautious market sentiment."
"US growth was revised lower, with the economy expanding at a subdued pace in the final quarter of 2025, reflecting weaker investment and softer consumer spending."
"Attention now turns to today's inflation release, which is expected to show further increases in both headline and core measures, potentially impacting Treasury yields and the dollar."
The dollar index remained steady but is expected to decline weekly due to easing geopolitical tensions in the Middle East, which alleviated inflation concerns. Treasury yields stabilized ahead of significant political developments and economic data. Diplomatic talks in Islamabad involving US and Iranian officials are being closely monitored. Despite this, market sentiment is cautious due to ongoing tensions in Lebanon and disruptions in the Strait of Hormuz. Recent economic data showed lower US growth and firm core PCE inflation, leading to expectations for today's inflation release, which could impact Treasury yields and the dollar.
Read at London Business News | Londonlovesbusiness.com
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