Treasuries fell after a gauge of US job openings exceeded economist estimates, an indication of labor market strength with the potential to give the Federal Reserve leeway to raise interest rates to curb inflation. The selloff lifted yields across maturities by three to five basis points as traders priced in somewhat higher chances of at least two Fed rate increases over the coming months.
Earlier Tuesday, Election Day in the US, volatility in oil prices in response to Middle East war headlines briefly drove yields lower. The US 10-year yield rose more than five basis points at one point to 4.97%, reaching session highs minutes after the release of JOLTS job openings data for September that signaled strong demand for labor. The US Labor Department's October employment report is slated for release on Friday and is expected to show improvement from September.
"The JOLTS numbers for September are firm," said Padhraic Garvey, head of research for the Americas at ING Groep NV. "The edge higher in yields looks about right against this."
Yields reached session lows as the price of US benchmark West Texas Intermediate crude oil futures fell below $94, a three-week low, after a 7.4% drop on Monday, the biggest since July. A surge in oil prices, unleashed when the US attacked Iran in late February and reducing Middle East supply, reignited US inflation and led the Fed to raise interest rates in September for the first time since 2023. The Fed left rates unchanged at its October meeting, though two of the committee's 12 voters dissented in favor of a hike.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing