US Treasury yields climb as Oil spike revives CPI jitters
US Treasury yields rose on Monday as traders braced for the release of US inflation figures this week, following a worse-than-expected Nonfarm Payrolls report last Friday.
On Monday, US Treasury yields climbed as traders anticipated the release of inflation data for the week, following a disappointing Nonfarm Payrolls report. The prospect of talks between Iran and the Trump administration waned with the statement that Iran would wait until 2029 to discuss the Strait of Hormuz. Energy prices surged, pushing yields up across the spectrum.
The 10-year Treasury note increased nearly six basis points to 4.705%, while West Texas Intermediate crude prices rose over 6.70% to $82.29. July's Consumer Price Index (CPI) was expected to dip slightly from 3.5% to 3.4% year-over-year, and the core CPI was projected to decrease from 2.6% to 2.5% year-over-year. On August 13, the Producer Price Index was also anticipated to ease.
Job losses were reported, with the economy shedding 23K positions, and May and June figures were revised downward by 100K. Investors adjusted their expectations for the Federal Reserve, now projecting a steady interest rate range of 3.50%-3.75% by year-end. The Fed's chances of maintaining rates unchanged at the September meeting stood at 65%, while a 26-basis-point rate hike had a 35% probability.
The US Dollar Index rose 0.20% to 99.81. Traders kept an eye on Initial Jobless Claims for the week ending August 8 and the University of Michigan's Consumer Sentiment.
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