Iran's Foreign Ministry spokesperson confirmed that Iran and Oman have reached an agreement on navigation routes through the Strait of Hormuz, with the joint announcement now in its final stages pending no third-party interference. According to Axios, the US aimed for an agreement on Hormuz reopening by local time 5th. Under the Iran-Oman arrangement, ships entering the Persian Gulf will use the northern route closer to Iran, while exiting vessels will use the southern route near Oman under consultation with Iran. However, the spokesperson cautioned that if US naval blockades or pressure on Iran continue, the bilateral agreement alone may not guarantee the safety of ships passing through Hormuz. Iranian local media previously clarified that Hormuz-related negotiations were strictly bilateral between Iran and Oman, with no US involvement. The agreement includes a plan for Iran and Oman to complete mine removal from the central channel within 30 days, after which the central route would serve as the permanent passage under a 60-day temporary measure with no tolls or service fees imposed during this period.
Iran and Oman Agree on Hormuz Strait Navigation Routes
The Iranian Foreign Ministry spokesperson stated that Iran and Oman have finalized an agreement on navigation routes through the Strait of Hormuz. The spokesperson noted that the joint announcement has reached its final stages, contingent on no interference from third countries. Under the agreed framework, ships entering the Persian Gulf through Hormuz will utilize the northern route closer to Iran, while vessels exiting will use the southern route near Oman following consultation with Iran.
The spokesperson emphasized that continued US naval blockades or pressure directed at Iran could prevent the bilateral agreement from fully guaranteeing the safety of ships transiting Hormuz. Iranian local media outlets drew a clear distinction, stating that Hormuz-related negotiations involved only Iran and Oman, with no US participation.
According to Axios, the US set a goal of reaching an agreement on Hormuz reopening by local time 5th. The Iran-Oman plan stipulates that both countries will complete the removal of mines installed in the central channel within 30 days. Once mine clearance is finished, the central route will become the permanent passage for Hormuz traffic under the terms of a bilateral agreement. This arrangement will operate as a 60-day temporary measure, during which no tolls or service fees will be charged to transiting vessels.
Reuters reported that the US effectively exhausted its stockpiles of ATACMS long-range precision-guided weapons and next-generation precision-strike missiles during the conflict with Iran. Ammunition reserves have fallen to dangerously low levels, which reportedly forced President Trump to abruptly cancel a large-scale airstrike plan last week. Separately, the US Treasury officially removed two aircraft operated by Iraqi airline Fly Baghdad from its sanctions list. Fly Baghdad had been designated as a Specially Designated Global Terrorist entity due to its links with Iran's Revolutionary Guard Corps.
US July Employment Growth Slows to 44,000 as Services Sector Faces Hiring Pressure
The US services sector, which accounts for approximately two-thirds of the American economy, continues to demonstrate resilience, though it faces mounting pressure on the employment front. The ISM Services PMI for July reached 54.1, a slight improvement from the previous month but below market expectations. Both the new orders index and business activity index showed notable increases compared to the prior month, reflecting the strong recovery momentum in the US services economy. The World Cup effect appears to have contributed significantly to this uptick.
However, the employment index contracted after rebounding in the previous month, marking the largest employment decline since March. Businesses cited sustained cost pressures as the primary reason for postponing hiring decisions. Persistent inflationary pressures continue to weigh on corporate employment strategies.
ADP's July private-sector employment report confirmed the weakening employment trend. Private payrolls increased by 44,000 in July, a sharp deceleration from the 95,000 gain recorded in the prior month. Analysts noted that the World Cup boost, which had supported services sector activity, did not carry over into private employment figures.
A particularly striking data point was the 7% wage growth rate among workers who changed jobs. This suggests that companies are competing more aggressively to secure talent rather than expanding overall headcount, and that labor shortages persist in specific occupational categories. Since labor costs represent a substantial portion of services sector expenses—which constitute a large share of the US economy—rising wages could serve as an additional inflationary catalyst.
Minneapolis Federal Reserve President Kashkari reiterated his hawkish stance in response to the inflation-driven economic indicators. He stated that if inflation continues at its current pace or worsens, three interest rate hikes this year remain possible. Referencing the 1970s, Kashkari warned that the Federal Reserve must not repeat the mistake of tolerating rising prices and emphasized the necessity of bringing inflation down to the 2% target. Regarding a potential September rate hike, he indicated that the decision would depend on forthcoming inflation data.
US Treasury Maintains Mid-to-Long-Term Bond Issuance at $125 Billion
The US Treasury announced plans to issue $125 billion in mid-to-long-term bonds to redeem $96.3 billion in maturing privately held debt and raise $28.7 billion in new funding. The issuance will be allocated as follows: $58 billion in 3-year notes, $42 billion in 10-year notes, and $25 billion in 30-year bonds.
Given the current environment of rising Treasury yields, increased bond issuance could exert additional upward pressure on interest rates. The Treasury stated that it will maintain mid-to-long-term bond issuance at current levels for at least several quarters.
The US is currently refunding approximately $100 billion—roughly 60% of total mutual tariff revenue collected—which is exacerbating the fiscal deficit situation. Increasing bond issuance under these conditions could trigger further volatility in the Treasury market. To mitigate upward pressure on yields, the Treasury has frozen mid-to-long-term issuance volumes while awaiting corporate tax inflows expected in September. In October, the Treasury plans to increase issuance primarily through short-term securities.
To provide additional market relief, the Treasury announced a buyback program—similar to corporate share repurchases—with a total authorization of up to $63 billion. Market participants will be monitoring the impact of this buyback initiative on overall liquidity conditions.
FAQ
What did Iran and Oman agree on regarding the Strait of Hormuz?
Iran's Foreign Ministry spokesperson confirmed that Iran and Oman reached an agreement on navigation routes through the Strait of Hormuz. Ships entering the Persian Gulf will use the northern route closer to Iran, while exiting vessels will use the southern route near Oman. The two countries plan to remove mines from the central channel within 30 days, after which the central route will serve as the permanent passage under a 60-day temporary measure with no tolls imposed.
Why did US private employment growth slow in July?
ADP reported that US private-sector employment increased by only 44,000 in July, down sharply from 95,000 in the prior month. The ISM Services employment index contracted after a prior-month rebound, marking the largest decline since March. Businesses postponed hiring due to persistent cost pressures and inflationary concerns, even as the services sector overall remained resilient.
How much in bonds is the US Treasury issuing and why?
The US Treasury plans to issue $125 billion in mid-to-long-term bonds: $58 billion in 3-year notes, $42 billion in 10-year notes, and $25 billion in 30-year bonds. Of this total, $96.3 billion will redeem maturing privately held debt, while $28.7 billion will provide new funding. The Treasury will maintain issuance at current levels for several quarters to avoid further volatility in the bond market amid rising yields and fiscal pressures from tariff refunds.
