U.S. Treasury yields climbed again on Friday, capping a volatile week driven by hawkish Federal Reserve commentary and stronger-than-expected economic data. The benchmark 10-year note touched its highest level since June 2007, while a global bond sell-off pushed yields in Japan, the U.K., Germany and elsewhere in the eurozone to fresh highs.
The 10-year Treasury note rose 3 basis points to 5.192% on Friday, a day after touching its highest rate since June 2007. The 30-year Treasury bond climbed more than 4 basis points to 5.507%, a level last seen in 2004. The 2-year note yield fell more than 2 basis points to 4.874%. One basis point equals 0.01%, and yields move opposite to prices.
Global bond markets sell off together
The selling pressure was not confined to the U.S. Japanese government bonds, U.K. gilts, German bunds and other eurozone bonds hit fresh highs this week, though eurozone and Japanese yields edged lower on Friday.
Fed comments and economic data drive the move
Treasury yields have been driven higher by hawkish comments from Federal Reserve Governor Michael Barr, who said in a Wednesday speech that further steps can be expected to bring inflation down to target. Stubbornly high oil prices and a purchasing managers' index reading at its highest level in more than four years added to the pressure. Traders were last pricing in a 66% chance of a rate hike in October, according to the CME FedWatch tool.
On the data front, durable goods orders in August came in relatively unchanged, while economists polled by Dow Jones had expected a 0.3% decline. Consumer sentiment plummeted in September.
Source: CNBC
Trading involves risk.
Risk Disclaimer
