THE 10-year Treasury yield rose Tuesday as renewed volatility in oil markets and lingering tensions in the Middle East kept investors on alert.
The benchmark yield rose more than 4 basis points to 4.38%. THE 30 years the yield added more than 2 basis points to 4.938%, while the 2 years lost 3.893%, up more than 6 basis points.
One basis point is 0.01%, and yields and prices move in opposite directions.
The rise in yields occurred while oil prices rebounded Tuesday, reversing some of the sharp losses seen in the previous session as traders reassessed developments in the Middle East conflict.
Oil initially collapsed on Monday after President Donald Trump said Washington and Tehran had had “very good and productive conversations” toward ending hostilities, adding that he had ordered a five-day pause on planned strikes against Iran’s energy infrastructure.
However, the latest rise in crude prices suggests markets remain unconvinced that tensions will ease quickly, particularly after Iranian officials denied talks were taking place.
Analysts noted that conflicting headlines have heightened uncertainty, keeping energy and rates markets sensitive to developments. Easing tensions and falling oil prices briefly supported Treasuries at the start of the week, but renewed uncertainty is once again weighing on sentiment.
“Overall risk remains particularly high as the war continues without a clear exit,” wrote Ian Lyngen, head of U.S. rates strategy at BMO, adding that U.S. rates would likely take cues from swings in energy prices until the conflict becomes clearer.