U.S. bond yields rose on Wednesday after new data showed strong activity in the services and manufacturing sectors.
This data reinforced investors’ expectations that the Federal Reserve may raise interest rates again.
The yield on the 2-year Treasury note rose by 8 basis points to 4.464%.
The yield on the benchmark 10-year Treasury note also rose by 7 basis points, reaching 5.058%.
This is the highest level since July 2007. The yield on 30-year bonds increased by more than 4 basis points, reaching 5.347%.
This rise followed an increase in the services sector Purchasing Managers’ Index (PMI) to 58.7 points in September
compared to 56.5 points in August. The manufacturing PMI also reached 56.7 points, hitting a four-year high.
Global markets expert Daniel Al-Banna said that the rise in U.S. bond yields reflects concerns about the U.S. economy and public debt, as well as interest rate expectations and geopolitical tensions.
He added that the Treasury Department’s interventions have not, so far, succeeded in calming the market in a sustainable manner.
Al-Banna believes that stabilizing yields requires greater clarity in monetary policy, a decline in inflation and oil prices, as well as an easing of tensions in the Middle East.
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