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US Treasury yields rise as oil jump and CPI jitters lift rates
The US 10-year note rose nearly 6 basis points to 4.705%, while the Fed is now priced for a 65% chance of holding rates steady in September.
US Treasury yields climbed on Monday as traders prepared for upcoming inflation data later this week, with sentiment pressured after a worse-than-expected Nonfarm Payrolls report last Friday, according to FXStreet. Energy prices also moved higher after headlines about Iran reducing prospects for near-term Strait of Hormuz talks, helping lift yields across the curve.
The US 10-year benchmark note rose nearly 6 basis points to 4.705%. West Texas Intermediate crude surged more than 6.7% to $82.29, and the dollar index was up 0.2% at 99.81.
Markets are looking for July CPI to ease slightly, with expectations for headline CPI to fall from 3.5% to 3.4% year over year, and core CPI to decline from 2.6% to 2.5% year over year. FXStreet also noted traders will watch the Producer Price Index, which is expected to cool the following day, as well as Initial Jobless Claims for the week ending August 8 and the University of Michigan Consumer Sentiment reading.
After the jobs report showed the economy cutting 23K jobs and downward revisions of 100K to prior months, traders trimmed hawkish expectations for the Federal Reserve. Prime Terminal data cited by FXStreet indicated a 65% chance the Fed keeps rates unchanged at the September meeting, versus a 35% chance of a 26 basis-point hike.
Latest closeWTI crude $82.30 ▲5.3%|Dollar index 99.81 ▲0.2%