Treasury yields jump to highest level since November

The 10-year Treasury yield rose to its highest level since mid-November 2023, increasing by more than 13 basis points to 4.632%. Additionally, the two-year Treasury yield grew by almost 6 basis points and now is at 4.938%. Prices and yields move in opposite directors, with one basis point equal to 0.01%.

Investors are reacting to a news of an increase of 0.7% in retail sales, higher than the 0.3% gain that was predicted by the Dow Jones consensus forecast. Last week’s report of a higher-than-anticipated increase in the consumer price index for March had an effect, too, as well as the potential market impact of growing Middle East tensions.

“The escalation of the conflict in the Middle East has contributed further to the inflationary angst that is defining the U.S. rates market at the moment,” said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets. “The stickiness of realized inflation demonstrated via the Q1 data has only served to reinforce concerns that there is another leg higher in the offing.”