Treasury Action: yields are redoubling their rise
Treasury Action: yields are redoubling their rise with a vicious squeeze at the long-end continuing to drive the move amid fresh concerns about the uptrend on oil and commodity prices driving the rise despite the downdraft on stocks. WTI crude marked a fresh trend high of $69.56 earlier and remains over 1% higher near $69.19 bbl after recent inventory draws were met with Saudis signaling a preference for a $80-100 target range. The RJ/CRB commodity index likewise marked a 52-week high of 208.18 for a 5.5% YTD return. The U.S. curve is 0.9-7.4 basis points higher now, steepening sharply as bond long longs are unwound, the 2s-30s spread gaps out 6.5 bps to +68 bp and the 30-year yield tops 3.12% to 1-month highs after drifting down from 3.233% highs back in February to 2.96% by early April. Bunds yields have followed suit, lurching nearly to 0.60% from 0.53% yesterday; Gilt yields jumped to 1.516% from 1.41%; and even sticky JGB yields topped 0.040% from 0.033%. The Bund/T-note spread at -233 bp is little changed from the close, however, implying a mutually negative reaction to commodities, though its well out from -200 bp at the start of the year.