FX.co ★ Treasury Yields Rise for 4th Session

The yield on the US 10-year Treasury note climbed for a fourth straight session on Thursday, reaching 4.14%, its highest level in about a month, as inflation fears intensified amid the escalating conflict with Iran, with both Tehran and Washington pledging to ramp up attacks. The global bond selloff deepened as energy prices resumed their ascent after a brief pause the previous day, stoking concerns that prolonged disruptions to oil and natural gas supplies could trigger a renewed inflationary spiral.

At the same time, a string of stronger-than-expected US economic data underscored the resilience of the economy. Initial jobless claims came in below forecasts, productivity rose more than anticipated last quarter, announced job cuts fell sharply, and the ISM Services PMI indicated that the sector unexpectedly expanded at its fastest pace since mid-2022.

Against this backdrop, traders further trimmed their expectations for Federal Reserve rate cuts this year. Markets are now pricing in just a single 25-basis-point cut, down from the two cuts anticipated earlier in the week.