US Treasuries attempted a brief rally in after-hours trade on Tuesday after oil prices suddenly surged on rumours of an Iran strike on a US ship, but came right back after the White House and the US navy denied any incidents. After the US denial, 10-year notes turned flat again and were yielding 4.61 percent.
"Navy has nothing to substantiate that report right now," a Navy official said. "At this juncture, there is no validity to it." "We have no information at this time that indicates any incident taking place," said White House National Security Council spokesman Gordon Johndroe.
Crude oil prices briefly shot up over $5 to $68.09 but came back down to around $64.48. "The US Navy is conducting extensive maneuvers in the Gulf region, including two aircraft carriers and their strike group," said Lou Brien, a strategist with DRW Trading Group in Chicago. "Chatter has it that there was some kind of incident involving these forces and Iran. I still see no news.