US yields hit 24-year highs after economic data and rising oil prices
TLT•The 10-year Treasury yield reached 5.3445%, its highest level since early April 2002, while the 30-year yield hit its highest since late May 2002. Traders priced in an 88% chance of a 25-basis-point Fed rate hike in December, and Brent crude rose around 2%.
1. Treasury yields rise
Longer-dated US Treasury yields reached highs last seen in 2002 after economic data gave investors little reason to stop selling bonds. The 10-year yield touched 5.3445%, while the 30-year yield reached 5.6935%; the two-year yield fell 4.16 basis points to 4.845%.
2. Data and oil prices
US manufacturing activity was little changed in September, while prices for inputs surged amid strong demand. New applications for unemployment benefits fell last week and layoffs decreased in September. Brent crude rose around 2% after China suspended exports of oil products.
3. Fed rate expectations
Traders priced in a roughly 69% chance that the Fed would hold rates steady at its October 27-28 meeting and an 88% chance of a 25-basis-point hike at its December 8-9 meeting. Investors were watching for Friday’s September nonfarm payrolls report and public comments from Fed officials.
