10-year UST yield breaches 3.00 psychological level first time in 4-1/2 years on hopes of higher inflation, faster Fed rate hikes

The U.S. Treasuries finally breached the 3.00 psychological mark after a span of 4-1/2 years, hovering around that level in the overnight session. However, it started to jump back again on market expectations of a rising in inflationary pressure in the country and the UST yields are closely watched for between the trading sessions. Expectations of a stronger pace of Fed tightening this year also led to a rise in bond yields.

The yield on the benchmark 10-year Treasuries rose nearly 3-1/2 basis points to 3.01 percent, the super-long 30-year bond yields jumped 2-1/2 basis points to 3.19 percent and the yield on the short-term 2-year traded nearly 3 basis points higher at 2.50 percent by 11:15GMT.

Treasuries remained under pressure amid lingering supply jitters, mounting inflation worries mainly on the back of higher commodity prices and expectations for higher Fed interest rates in the period ahead.

Yesterday the 10-year UST yield finally breached the 3 percent mark for the first time in four years, with higher oil prices providing support. Brent traded above USD75 per barrel for the first time since late 2014. Higher yields together with some unsettling reports on corporate earnings in the US put downward pressure on equities – the S&P 500 ended the day 1.3 percent lower. 

Meanwhile, the S&P 500 Futures rose 0.61 percent to 2,687.00 by 11:15GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained highly bullish at 133.48 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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