Long-end Treasury yields established fresh multiyear highs on Monday, as traders continued to absorb the higher-for-longer theme for interest rates in the U.S. and abroad.
What happened
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The yield on the 2-year Treasury
BX:TMUBMUSD02Y
rose less than 1 basis point to 5.129% from 5.123% on Friday. Yields move in the opposite direction to prices. -
The yield on the 10-year Treasury
BX:TMUBMUSD10Y
jumped 10.3 basis points to 4.541% from 4.438% on Friday. Monday’s level is the highest for the 10-year yield since Oct. 17, 2007, based on 3 p.m. Eastern time figures from Dow Jones Market Data. -
The yield on the 30-year Treasury
BX:TMUBMUSD30Y
soared 13.7 basis points to 4.658% from 4.521% on Friday. The 30-year rate ended Monday’s session at its highest closing level since March 8, 2011.
What drove markets
Long-end Treasury yields surged on Monday as the higher-for-longer mantra on rates from the Federal Reserve and central banks in Europe continued to reverberate across asset classes. U.S. stocks struggled for momentum into the final hour of trading, while the ICE U.S. Dollar Index
DXY
jumped 0.4%
The data highlight of this week comes on Friday with the release of the Fed’s favorite inflation gauge, known as the PCE, for August. Ahead of that, investors are wrestling with a growing list of risks, including a possible government shutdown.
Read: Stock investors face a wall of worry into year’s end, creating the need for protection
This week, the Treasury Department auction schedule includes the sales of $48 billion in two-year notes, $49 billion in five-year notes, and $37 billion in 7-year notes.
What analysts are saying
“U.S. stocks are lower as global bond yields shift higher on fears that central banks will follow the Fed’s lead and keep rates higher over the long-term,” said Edward Moya, senior market analyst for the Americas at OANDA Corp., in a note.
“Inflation flare-up risks are growing and that still suggests the Fed might have to do more tightening despite the trajectory of the economy,” Moya wrote.
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