The session was dominated by the verbal escalation between Trump and Iran over the Strait of Hormuz. Trump demanded compensation for victims of attacks involving improvised explosive devices and extended the claim to include damages in Lebanon, Syria, Yemen, and Gaza, dampening expectations of a quick agreement to reopen the waterway. Iran, for its part, made the reopening conditional on the cessation of what it calls “illegal actions” by the U.S. and the payment of reparations. Oil took center stage, with WTI rising 5.1% to $82.1 and Brent 4.8% to $87.6, extending the rally seen in recent sessions following attacks on refineries in Saudi Arabia and Russia, which also sent diesel futures soaring in Europe. As expected, the move in crude oil directly impacted Treasuries, resulting in a bear flattener (rising yields with the long end lagging behind the short end): the 10-year yield rose 5.2 bps to 4.70%, the 2-year yield rose 4.1 bps to 4.24%, and the 30-year yield rose 4.3 bps to 5.24%. In Europe, the 10-year Bund rose 4.6 bps to 3.18% and the Gilt rose 6.8 bps to 4.99%. U.S. equities closed with slight and mixed movements, with the Nasdaq and the S&P 500 edging lower, while Asia had a more favorable session, with the Nikkei rising 2.1% and the Kospi 0.7%. In metals, gold rose 1.1% and silver 3.4%, while the DXY rose 0.3% to 99.8 and the VIX rose 0.6 points to 15.5.

The sovereign yield curve fell by an average of about 0.4 percentage points, with slightly more pressure in the medium- and long-term segments. PDVSA remained virtually flat, with slight declines of around 0.1 percentage points across the entire curve. Elecar closed unchanged, and PDV'20 also remained virtually flat. Trading volume was low.

Latin American yield curves closed under widespread pressure in line with the rise in benchmark rates. Argentina led the declines with a drop of 0.9 points, followed by Pemex and El Salvador, both down 0.4 points. Mexico and the Dominican Republic fell 0.3 points, while Brazil, Ecuador, and Colombia fell 0.2 points. Average volume.