The US Treasury front end saw a slight easing in yields on Friday, with the 10-year note ending the half session around 4.57%. Meanwhile, the 5s30s curve flattened by approximately 4 basis points (bps). This development can be attributed to optimism surrounding the ongoing US-Iran nuclear talks.

The recent volatility in the long end of the yield curve has been a cause for concern, with the 30-year yield reaching its highest level since mid-2007 (5.20%) on May 19th. However, investors appear to be taking a breather today, as gains from the previous session were maintained.

Kevin Warsh’s swearing-in as Fed Chair on Friday was met with little market movement, as his remarks were light on policy and his confirmation was largely non-market moving. However, markets have fully priced in a Fed rate hike this year, following Governor Waller’s statement that the next policy move is as likely to be a hike as a cut, citing persistent inflation pressures linked to the Iran conflict.

Looking ahead, the Treasury will face a heavy auction slate next week, including $69 billion in 2-year notes, $70 billion in 5-year notes, and $44 billion in 7-year notes. Flows were generally quiet into the long weekend, with modest selling of long-end spreads and some buying interest in the front end. Hedge funds were primarily paying in 5s10s30s.