US Treasury futures have declined, with the yield curve continuing its flattening trend. This movement comes amid reports that the US is deploying dozens of additional aerial refueling tankers to Israel ahead of a potential escalation in military operations.

The day's losses were concentrated at the front end of the yield curve, pushing the 2-year/10-year and 5-year/30-year Treasury yield spreads to narrow by approximately 3 basis points and 2 basis points, respectively, both reaching intraday lows. The yield on the US 2-year Treasury note rose by about 2 basis points from Thursday's close, while yields on longer-term bonds saw a slight decrease.

Overnight index swaps (OIS) tied to Federal Reserve meeting dates indicate the market is pricing in roughly 4 basis points of rate hike premium for the July meeting, largely unchanged from earlier in the day. Market expectations now point to cumulative rate hikes of about 30 basis points by December, an increase from the 27 basis points anticipated at Thursday's close.