U.S. Treasuries faced pressure during the American trading session, weighed down by rising oil prices. Traders balanced optimistic expectations of a potential extension to the U.S.-Iran ceasefire against the persistent disruption to shipping from the dual blockade of the Strait of Hormuz. Long-dated bonds led the decline, driving the 2s10s spread and the 5s30s spread wider. Trading volume in futures remained significantly below average levels.

Shortly after 3 p.m. New York time, yields across the U.S. Treasury curve were up by 1 to 3 basis points. The 2s10s spread and the 5s30s spread widened intraday by 1 basis point and 1.2 basis points, respectively. The 10-year Treasury yield approached its session high towards the close, rising approximately 2.5 basis points to 4.31%.

The sell-off in Treasuries developed gradually throughout the day but accelerated after WTI crude oil surpassed $95 per barrel. Although the oil price advance moderated slightly in the afternoon, the downward pressure on Treasuries persisted.

Trading volume in Treasury futures remained low. As of 3 p.m. New York time, volume was approximately 65% of the 20-day average, while SOFR futures volume was about 35% to 60% of typical levels.

As of 3:32 p.m. ET, the 2-year Treasury yield was 3.7716%. The 5-year Treasury yield was 3.9096%. The 10-year Treasury yield was 4.3053%. The 30-year Treasury yield was 4.9285%. The yield spread between the 2-year and 10-year Treasuries was 53.35 basis points. The yield spread between the 5-year and 30-year Treasuries was 101.71 basis points.