Bonds & Rates
Home›Bonds & Rates›Economy›Middle East tensions drive U.S. 30-year Treasury yield…
Middle East tensions drive U.S. 30-year Treasury yield near two-decade high
The 30-year yield rose to 5.3264%, while traders trimmed the odds of a Fed hike for September to 36.6% from 48.4% a week earlier.
A selloff in U.S. government bonds accelerated on Tuesday as fears of escalation in the Middle East renewed inflation concerns, pressuring stocks alongside a third straight rise in oil. Reuters said the move sent the 30-year Treasury yield to a near two-decade high, with investors also watching upcoming Federal Reserve materials for clues on the rate outlook.
The yield on the U.S. 30-year Treasury rose 1.64 basis points to 5.3264%, its highest level in almost 20 years, while the 10-year yield increased 1.59 basis points to 4.7399%. Reuters reported that the pressure spilled into other major government bond markets, with Japan’s 10-year bond nearing 3% and euro zone yields hovering near multi-year highs.
Across Europe and U.S. equity markets, STOXX 600 fell 0.52% to 652.99, and Reuters said futures tied to the S&P 500 and Nasdaq 100 slipped 0.54% and 1.05%, respectively. The CBOE Volatility Index rose to its highest level in more than a week, reflecting increased concern among investors.
Traders also focused on Fed expectations, with Reuters citing CME FedWatch data showing a 36.6% chance of a hike at the September meeting, down from 48.4% a week earlier. Reuters added that strategists at Gramercy Funds Management said investors should maintain hedges against renewed oil and inflation volatility, and noted markets awaited minutes from the Fed’s most recent policy meeting due on Wednesday.
Latest closeS&P 500 7,785.76 ▼0.2%|Nasdaq Comp. 26,729.16 ▼0.3%