U.S. bonds sell off as 10-year and 30-year yields hit 24-year highs
TLT•The 10-year Treasury yield reached 5.364% and the 30-year yield also hit a 24-year high as oil rose above $100 a barrel. SpaceX was reportedly seeking $40 billion in financing, adding to concerns about competition for investor capital.
1. Yields climb
U.S. Treasuries came under renewed selling pressure on Wednesday. The 10-year yield rose to 5.364%, its highest in 24 years, while the 30-year yield also touched a 24-year high and was last up 5.5 basis points at 5.696%. Brent crude rose 1.1% to $101.69 a barrel, and U.S. crude gained 1.34% to $90.64.
2. Borrowing competition
SpaceX was reportedly seeking $40 billion in financing to fund purchases of Nvidia chips, including about $10 billion in bank loans and $30 billion in investment-grade debt. Analysts said potential SpaceX bond issuance could renew concerns that corporate borrowing is competing with long-dated Treasuries for investor capital.
3. Auction and Fed minutes
The U.S. Treasury planned to sell $39 billion in reopened 10-year notes on Wednesday. The Federal Reserve was also due to release minutes from its September meeting, which could offer more clarity on policymakers’ views of rising long-term yields. The spread between two-year and 10-year yields widened to 52.2 basis points from 48.1.
