Middle East Conflict Resolution Could Impact U.S. Treasury Yields

Daiwa Securities strategist Shun Otani suggests that if a resolution is reached in the Middle East conflict, the yield on the U.S. 10-year Treasury could decrease from its current 4.30% to approximately 4.20%. According to Odaily, Otani highlights that once hostilities subside, market attention may shift towards ensuring safe navigation through the Strait of Hormuz and repairing relations between Iran and Gulf countries, which have deteriorated during the conflict. He views the meeting of foreign ministers from over 40 countries regarding the situation in the strait and reports of negotiations between Iran and Oman as positive signals towards de-escalation.