Investing.com - Higher oil prices on Thursday drove the yield on the benchmark, 10-year Treasury note to a 16-month high during intraday trading. But the bond price settled down on Thursday at -15/32 yield, or 2.441%.
The Organization of the Petroleum Exporting Countries (OPEC) agreed to trim the world's oil supply. The yield was 2.464% and earlier was 2.448%, as compared with 2.365% yesterday. Yields rise when bond prices fall. Crude Oilcontinued its gains from yesterday during trading this morning in the U.S.
The oil move drove investors to sell Treasury debt and buy Treasury inflation-protected securities today on Wall Street, and this sent the 10-year Treasury note’s yield over the 10-year TIPS to 1.98%, the highest since Oct 2014.
This suggests investors anticipate that U.S. inflation will run at an annual rate of 1.98% on average over the next 10 years. This 10-year break-even rate has climbed by 1.36%. The last-time the break-even rate was at 2%—the Fed’s target—was September 2014.
Also on Thursday, new manufacturing output numbers increased short-term optimism for U.S. growth outlook, convincing more investors to sell Treasury debt, which is typically a haven when the economy stalls. A U.S. jobs report is due Friday, and is one of the most important monthly economic statistics, and investors say a positive report on U.S. hiring trends may ignite more selling in the bond market.