US Yields Slide on Mexico Trade Optimism and Falling Oil Prices

Key Facts

In a move reflecting shifting inflation expectations and trade policy dynamics, financial markets witnessed a notable decline in US yields alongside a potential breakthrough in regional trade relations. 10-year US Treasury yields slid lower by more than 9 basis points, a move largely driven by a sharp decline in crude oil prices. According to reports, a trade deal is on the horizon between the United States and Mexico following positive communications between President Donald Trump and President Claudia Sheinbaum.

These developments occur amid significant volatility in the energy sector, where Brent crude oil prices sank by $3.5 to intraday lows below $102 per barrel before retracing to $104. Per market data, this drop in energy costs has helped cool inflation expectations, leading to a bull-flattening of the US yield curve as 2-year yields were dragged lower by nearly 7 basis points. While US-Canada trade relations face increasing friction, the progress with Mexico is viewed as a constructive driver for the resilience of the Mexican Peso (MXN).

As of September 18, 2026, markets are monitoring whether Treasury levels will stabilize following the recent post-FOMC retracement. With current instrument prices unavailable in this snapshot, investors are looking to upcoming catalysts to define the macro trajectory. Recent historical data, such as the NY Empire State Manufacturing Index which printed at 7.6 on September 15, suggests a cooling industrial environment, making official confirmation of the US-Mexico trade progress a critical factor to watch for market direction.