30-year US Treasury yield hits 19-year high on oil spike
Brent crude reached a four-month high of $109.97. This oil surge pushed the 30-year US Treasury yield to 5.3803%, a level last seen 19 years ago. Inflation fears are rising globally.
Brent crude rose to a four-month high of $109.97 per barrel. The price jumped 6% overnight. It is on track for a weekly gain of nearly 13%.
Shipping disruptions in the Strait of Hormuz and the Red Sea are constraining oil flows. Investors are reassessing inflation risks. The 30-year US Treasury yield climbed to 5.3803%. This is the highest level in 19 years.
US rates hit multi-year peaks
The 10-year US Treasury yield rose 2 basis points to 4.9708%. This marks a three-year high. It sits just below the 5% threshold. The 2-year yield also increased by 2 basis points to 4.5835%.
Markets are pricing in a 70% probability of a Federal Reserve rate hike this month. A US Treasury buyback program fell short of the expected $6 billion. This shortfall contributed to the bond selloff.
Global central banks tighten policy
Australia's three-year government bond yield surged 18 basis points to 5.047%. This is a 15-year high. Japan's 10-year yield rose 6 basis points to 2.97%.
JPMorgan analysts expect eight of nine developed-market central banks to raise rates by year-end. The European Central Bank raised rates for the second time this year. Further tightening is possible in October.
Equities fall on higher discount rates
Rising bond yields increased discount rates for equities. The MSCI Asia-Pacific index fell 1.8%. Japan's Nikkei dropped 2.8%. China's CSI300 index declined 1.2%.
US stock futures remained under pressure. Nasdaq futures fell 0.2%. The US dollar strengthened to 99.04. Gold edged up 0.3% to $4,328 per ounce. GN auto markets/bonds reported these moves in their bond trading analysis.
