Treasury Yields Climb as Markets Brace for Fed Minutes

The 10-year Treasury yield climbed 4 basis points to reach 5.310%, while the 30-year yield rose 4.6 basis points to 5.686%, holding near multidecade peaks. Commerzbank rates strategist Erik Liem attributed the movement to rising oil prices, noting that 10-year Bunds are poised to open above 3.50%. Meanwhile, the two-year Treasury yield ticked up 2.1 basis points to 4.811%.

Market sentiment regarding an October rate hike has cooled significantly; current data from LSEG suggests only a 22% probability of an increase, a sharp decline from the 70% chance priced in just last week. Analysts at Danske Bank warn that the long end of the yield curve remains vulnerable. Chief analyst Jens Peter Sorensen cited both supply concerns and the influence of hyperscalers, cautioning that 10-year and 30-year yields could reach 6% as investors demand higher premiums for long-term debt.