US Treasury Yield Hits 19-Year High as Oil Prices Keep Markets on Edge
The cost of US government borrowing climbed to a fresh 19-year high on Tuesday as rising oil prices and renewed Middle East tensions intensified inflation concerns.
The 10-year US Treasury yield briefly hit 5.02%, its highest level since 2007, while Japan’s benchmark 10-year government bond yield moved back above 3%, reaching a 30-year high.
Oil remained the main macroeconomic concern after fresh attacks involving Yemen’s Houthis and threats to Saudi Arabia’s east-west pipeline raised fears of disruption to global supply. Brent crude traded around $107 a barrel, while US crude was above $102.
Higher energy prices are adding to pressure on central banks, including the Federal Reserve and Bank of England, as markets reassess the likelihood of further interest-rate increases.
Wall Street closed lower overnight, with the S&P 500 down 0.5%, the Nasdaq Composite falling 0.6% and the Dow Jones losing 0.3%. Nvidia dropped around 3.4% amid continued weakness in AI-related stocks.
Asian markets were mixed on Tuesday. Japan’s Nikkei was broadly steady to higher, helped by a strong rebound in SoftBank, while Australia’s ASX 200 fell around 0.9% and Hong Kong’s Hang Seng traded lower.
With oil prices elevated and government bond yields pushing to multi-year highs, investors remain cautious ahead of this week’s key central-bank decisions.
