Geopolitical tensions continue to concern markets

Published Date 4/19/2024

Israel retaliated against Iran last night. Tit for tat may have run its course, the Israeli response killed no one, the damage appears to be light and may cool things down between the two countries. Iran downplayed the attack. An Iranian military official signaled Tehran doesn’t feel compelled to react to the blasts. The reaction in markets given the soft response sent US rates lower in early trading, yesterday the 10 year note yield increased 5 bps on concerns that a serious response from Israel would come over the weekend. This morning the note yield saw volatility, on the initial report of the response the 10 year yield dropped to 4.50%, -14 bps but it lasted just a minute or two before the yield increased to 4.61% -2 bps from yesterday’s close. At 9 am MBS prices were up 9 bps from yesterday. Crude oil and gold initially spiked but by 9 am ET back to yesterday’s closing levels.

There are no economic reports today.

At 9:30 am the DJIA opened +54, NASDAQ -82, S&P -9. 10 year at 9:30 am 4.61% -3 bps. FNMA 6.0 30 year coupon at 9:30 am +5 bps from yesterday’s close and -18 bps from 9:30 am yesterday, the 6.5 coupon at 9:30 am -20 bps from 9:30 am yesterday.

The rest of the day looks to be quiet, there is a slight fear Israel will do more than it did last night but that isn’t likely. Both countries now appear to have concluded the dust up that sent markets reeling early this week. Stock indexes, gold, and crude oil all generally unchanged at 10 am as markets assess the that conflict between Israel and Iran is now completed.

Source: TBWS

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