Ten-Year Yield Jumps To Highest Closing Level Since June 2007
(RTTNews) - Treasuries showed a significant move to the downside during trading on Monday, extending the downward trend seen over the past several sessions.
After coming under pressure in morning trading, bond prices regained some ground in the afternoon but remained firmly negative. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 6.0 basis points to 5.240 percent.
With the increase, the ten-year yield closed higher for the fifth consecutive session, reaching its highest closing level since June 2007.
The early weakness among treasuries came amid a significant rebound by the price of crude oil, with U.S. crude oil futures spiking by as much as 4.5 percent after tumbling by 2.3 percent during last Friday's trading.
Crude oil prices surged early in the day after President Donald Trump rejected Iran's conditional proposal for reopening the Strait of Hormuz.
Iran's proposal would have purportedly reopened the strait and resumed nuclear talks in return for the U.S. lifting its blockade of Iranian ports.
A report from the Wall Street Journal citing U.S. officials said Trump has told aides he expects to resume bombing Iran after the November midterm elections.
While the price of crude oil has pulled back well off its highs of the session since, elevated energy prices continue to contribute to concerns about the outlook for inflation and interest rates ahead of the Federal Reserve's next monetary policy meeting late next month.
CME Group's FedWatch Tool is currently indicating a 70.3 percent chance the Fed will raise rates by another quarter point at its October meeting.
On Wednesday, the Commerce Department is scheduled to release its report on personal income and spending in the month of August, which includes the Fed's preferred inflation readings.
