Will the United States and Iran reach a formal nuclear agreement by the end of Q4 2026?
What moved
Energy price surge has pushed US 10-year borrowing costs to their highest since 2023 as fears of Iran conflict rise; bond yields moved higher alongside elevated gas prices.
The market transmission
A broad energy shock is transmitting into rates through inflation expectations. European gas reached three-year highs, signalling tight supply and energy-driven cost pressures. This is pulling UST10Y higher, compressing valuations in duration. The conflict risk around Iran matters primarily as a supply tail risk into oil and gas rather than as a safe-haven bid into bonds, since nominal yields are already pricing inflation concern. Gold would face headwinds here: when real rates are rising, the safe-haven bid weakens relative to the yield opportunity cost.
What would change this
Energy inflation feeding through to nominal yields is the operative channel here, not geopolitical risk-off. A supply shock that persists will keep upward pressure on yields; if the Iran risk materializes into actual disruption, that amplifies the channel. If supply concerns ease, the yields can reverse quickly since much of the move is priced around expectations rather than realised outages.
Directional leans
UST10Y ▲ highTTF ▲ moderateBRENT ▲ moderate