Treasury yields rise on oil

Strength in oil is pulling treasury yields higher, although gains remain restricted due to flight to safety amid wobbly equity markets and Brexit fears.

At the time of writing, 10-yr treasury yield was up just one basis point (bps) around 1.74%. The 2-yr yield, which mimics short-term rate hike bets, was largely unchanged around 0.728%.

Oil prices strengthened today on prospects of a drop in the US inventories and joint OPEC and non-OPEC output freeze. Meanwhile, an upbeat China services PMI data also helped equity markets stabilize.

Consequently, yields rose, although they still trade around multi-week lows.