The U.S. 10-year Treasury yields broke 2 percent mark Thursday for the first time since January over hopes that the Donald Trump government would spend more on developing the US economy, which could boost growth and inflation.
The yield on the benchmark 10-year Treasury note rose 3 basis points to 2.094 percent, the yield on 5-year bond jumped 5 basis points to 1.509 percent and the yield on short-term 2-year note bounced 3 basis points to 0.923 percent by 12:30 GMT.
The U.S. bond prices dropped on expectations that U.S. President-elect Donald Trump's policies, such as fiscal expansion and protectionism on international trade, will stoke inflation, sending 10-year Treasury yield to the highest in 2016 of 2.09 percent.
Moreover, investors again revised the outlook for the U.S. interest rates after Donald Trump's victory, with the probability of a December rate hike by the Federal Reserve going from as low as 30 percent to as high as 82 percent.
Also, market expects that the Federal Reserve will not witness any difficulty from the victory of Republican candidate Donald Trump in hiking interest rate in December, supported by improving economic conditions.
Trump has indicated he would increase fiscal spending and adopt more protectionist trade policies that could support growth and inflation, analysts said. Rising inflation tends to erode the value of bonds, pushing yields higher, Reuters reported.
Markets now look ahead to a flow of important economic data or events on Thursday, highlighted initial jobless claims, FOMC Member Bullard speech, 30-year bond auction and Federal budget balance for October.
Meanwhile, Meanwhile, the FxWirePro Dollar Spot Index is slightly bullish at 87, above the 0-point threshold benchmark (75 <Dollar Index <100 is considered to be slightly bullish), the S&P 500 Futures traded 9.75 points higher at 2,169.50 by 12:50 GMT.
