US Treasury bonds quietly rebound, Trump remains patient with Iran, what secrets are hidden in the employment data

⑴ US Treasuries received buying support during Thursday’s Asian session, with 2-year yields down 3 basis points, 10-year yields down 2 basis points, and long-term bond yields down 1 basis point. Trump signaled patience on the Iran issue, indicating reluctance to re-engage in a broader war, but emphasized that any killing of US soldiers by Iran would end the ceasefire. Despite Iran attacking US military bases and Kuwait Airport, Trump rejected Iran’s latest draft memorandum of understanding, insisted on more substantive concessions, and noted he was not in a hurry to reach a deal. US sanctions may remain in place until after Labor Day.⑵ From a trading psychology perspective, the market interprets Trump’s statements as intent to maintain the maximum pressure strategy: using strategic ambiguity and media guidance to force Iran to reduce regional conflicts while continuing economic sanctions. Currently, the Trump administration appears maximally flexible, balancing limited agreements against continued pressure, with no commitment to diplomatic resolution nor escalation into new conflict. Institutions believe the tactical preference remains two-way range trading but it’s better to sell on rebounds. The expected trading range for 10-year US yields is 4.46% to 4.50%.⑶ Multiple employment figures will be released Thursday: May Challenger corporate layoff report, weekly initial jobless claims, and final Q1 productivity. Initial jobless claims have shown a slight upward trend recently; last week’s initial and continuing claims hit five-week highs of 215,000 and 1.786 million, respectively. The market expects a slight decrease this week to 213,000 and 1.78 million. Challenger layoffs continue to rise—83,387 layoffs announced in April, the second-highest in the past six months. Of these, the tech sector accounted for 33,361 layoffs, and AI-related for 21,490, making up 16% of total layoffs year-to-date. After the downward revision of Q1 GDP, productivity is expected to be revised down from a quarter-on-quarter annualized rate of 0.8% to 0.5%, and unit labor costs revised up from 2.3% to 2.5%.