U.S. 10-year Treasury yield reaches 5.10% as oil rises after Trump remarks
Key Facts
The U.S. 10-year Treasury yield reached 5.10% on November 12, compared with 4.98% at Tuesday’s close, according to the Associated Press. The rise in the yield coincided with a climb in oil prices after President Donald Trump made remarks about Iran. Trading in the U.S. bond market was closed Wednesday for Veterans Day, so Thursday’s reading is compared with Tuesday’s close. Brent crude jumped from about $92 to more than $94 a barrel after Trump’s post, before later retreating. Crude stood at $94.47, up 1.8%, the agency reported.
Trump said the United States no longer needs a deal with Iran, adding: "We don't need a deal with Iran. Those days are long gone. We have their money, hundreds of billions of dollars, and we have their strait!" His remarks came as oil prices rose, which the Associated Press linked to increased inflation concerns. That makes the oil move relevant to the yield reading, as higher energy prices can add to the inflationary pressures markets are watching. But the published yield reading charts its change from Tuesday’s close to Thursday’s level, without breaking out how much Trump’s remarks contributed to the rise. The agency links Brent’s move in time to the president’s post, while noting that it retreated from its subsequent peak.
On prices, the U.S. all-items Consumer Price Index, seasonally adjusted, rose 0.4% in October after a 0.6% increase in September, according to the Bureau of Labor Statistics. The index excluding food and energy rose 0.3% in October, the same monthly increase recorded in September and August. The shelter index rose 0.3% in October and accounted for more than 30% of the monthly increase in the all-items index. On an unadjusted basis, the Consumer Price Index stood at 337.511 points, up 0.2% month over month. These readings provide a picture of the pace of inflation in October, while the oil move in the session is drawing added attention to the possibility that energy costs could feed through to prices.
In the labor market, initial jobless claims rose to 200,000 in the week ended November 7, from 191,000 after revision in the previous week, and came in above economists’ forecast of 195,000, according to the Associated Press. The four-week average of claims, which smooths weekly volatility, was unchanged at 195,250. Claims remained at 200,000 or below for nine consecutive weeks through November 12. They also did not exceed 230,000 in any week from the start of the year through that date. These figures put the latest weekly increase alongside a trend in which claims stayed within those bounds during the weeks and dates cited by the agency.
Attention now turns to the U.S. data and events calendar. The Bureau of Labor Statistics scheduled the release of the October Producer Price Index for November 13 at 08:30 a.m. Eastern time. On the same day, the Federal Reserve’s calendar lists Vice Chair for Supervision Michelle Bowman for a discussion on supervision and regulation at 10:50 a.m. Eastern time. The Fed also scheduled the release of minutes from the October 27 and 28 Federal Open Market Committee meeting for November 18 at 2:00 p.m. These dates give markets subsequent readings on producer prices, a discussion on bank regulation, and then details of deliberations at the Fed’s previous meeting.