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Bonds

10-Year Treasury Yield Approaches 4-Week High

The yield on the US 10-year Treasury note rose to 4.42% on Monday, hovering near the four-week highs reached last week, as traders assessed escalating tensions in the Middle East and a further increase in oil prices. Investors are also looking ahead to the Treasury Department’s announcement of its borrowing plans for the next three months, alongside several speeches from Fed officials and key economic data releases this week, including the jobs report. The US Treasury is widely expected to maintain the size of its quarterly refunding at $125 billion. On the data front, the US economy is projected to have added around 60,000 jobs in April, marking a sharp slowdown from 178,000 in March, while the unemployment rate is likely to have held steady at 4.3%. Markets currently anticipate that the Fed will keep the federal funds rate unchanged for the remainder of the year, although the probability of a 25 basis point rate hike in December stands at around 15%.

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