FX.co ★ US 10-Year Treasury Yield Ticks Higher

The yield on the US 10-year Treasury note rose to around 4.48% on Monday, as investors weighed developments in US-Iran peace talks and looked ahead to a key US inflation reading. Media reports indicated that Washington and Tehran had agreed on a roadmap aimed at reaching a final agreement within 60 days, easing some market anxiety after both sides recently issued renewed threats over the conflict in Lebanon.

Market focus now shifts to this week’s release of the US PCE price index, the Federal Reserve’s preferred inflation gauge. At its meeting last week, the Fed kept interest rates unchanged but struck a more hawkish tone. Nine of the 19 Fed policymakers now anticipate at least one rate hike before year-end, and futures markets are increasingly pricing in the possibility of a move as early as September. These heightened rate expectations have continued to underpin Treasury yields.