U.S. bonds fall for second day as oil weighs and 30-year auction looms
TLT•U.S. Treasury prices fell for a second consecutive session on Thursday as higher oil prices fueled inflation concerns and investors watched a $22 billion 30-year bond auction. The 10-year yield rose 2.8 basis points to 5.305%, while the two-year yield gained 5.7 basis points to 4.821%.
1. Yields move higher
Treasuries weakened on Thursday, pushing yields higher for a second consecutive session. The 10-year yield rose 2.8 basis points to 5.305% after reaching a 24-year high on Wednesday; the 30-year yield was flat to slightly higher at 5.666%, and the two-year yield rose 5.7 basis points to 4.821%.
2. Oil and auction focus
Rising oil prices stoked inflation concerns, with Brent crude up 4.7% to $104.87 a barrel and U.S. crude up 4.6% to $92.30. Investors watched a $22 billion 30-year bond auction after a strong 10-year note sale the previous day; 30-year yields had risen more than 30 basis points since the prior auction in September.
3. Fed comments weigh
The two-year/10-year yield spread narrowed to 48.9 basis points from 51.4 basis points. Federal Reserve Governor Christopher Waller said additional rate hikes would likely be needed to lower inflation to the Fed’s 2% target, while noting flexibility over the pace of increases.
