Geopolitical shocks do not tend to affect UST yields independent of their impact on oil prices | Deutsche Bank
The results indicate that positive oil price moves and data surprises significantly lift yields, higher policy uncertainty lowers them, and geopolitical shocks have no direct impact.
These findings are robust to running the analysis on daily instead of monthly data, entering the geopolitical and policy uncertainty indexes in levels rather than changes, and including the lagged change in the 10y UST as a regressor to control for any yield-momentum effects. Together, this suggests that, as far as UST yields are concerned, the main mechanism / variable to track on current Iran developments is the price of oil.
References
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