Investing.com - U.S. Treasury yields pushed higher on Thursday, resuming their upward march toward multi-decade peaks as global fixed-income desks weighed heavy domestic primary auction supply against crude oil shocks and escalating sovereign debt friction across Europe.
The long end of the U.S. curve led the push higher, with the 30-year Treasury yield rising to 5.705%, lingering near its highest levels since 2002.
Further down the curve, the benchmark U.S. 10-year Treasury yield rose to 5.33%, while the policy-sensitive two-year Treasury yield edged up to 4.814%.
The renewed duration selling follows a brief respite on Wednesday after the U.S. Treasury Department successfully digested a $39 billion 10-year note auction.
However, market participants remain cautious ahead of a crucial 30-year bond auction scheduled for later in the session - a key test of foreign institutional appetite for long-dated American debt amidst rising global inflation risks and oil prices holding stubbornly above $100 a barrel.
The cocktail of sticky energy inflation and heavy debt issuance was further reinforced by Wednesday's release of the September FOMC meeting minutes, where a majority of Federal Reserve officials indicated another interest rate hike remains on the table before year-end.
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Eurozone finance ministers pressure Paris as French yields near 5%
Across the Atlantic, the global debt sell-off continues to be exacerbated by a severe fiscal crisis in France, where borrowing costs have surged to 24-year highs and spilled over into broader peripheral paper.
Eurozone finance ministers and European Central Bank officials are assembling in Luxembourg on Thursday afternoon for monthly policy talks, where the ongoing turmoil in French sovereign debt is set to dominate discussions. Senior Eurozone officials confirmed to Reuters that ministers will urge Paris to pass its 2027 draft budget bill quickly to restore credibility and stem market contagion.
The French 10-year OAT yield edged up to 4.897% - marking a spike of nearly 80 basis points since early September - holding near its highest level since July 2002. The relentless liquidation of French assets has also widened spreads on Italian BTPs and Greek debt, while dragging the euro toward 17-month lows against the dollar.
"France's widening borrowing premium over Germany reflects concerns about fiscal credibility and the ability to support its debt burden," added Luke Davis, founder and chief market strategist at Bull Market Blueprint.
The relentless liquidation of French debt has blown spreads over German Bunds past 140 basis points, dragging Italian BTPs and Greek sovereign debt lower while knocking the euro down to 17-month lows against the dollar.
Bank of France Governor Emmanuel Moulin acknowledged the country's fiscal situation was "serious" due to a projected 5.4% deficit, but firmly ruled out ECB intervention—signaling to global desks that international investors must bear the burden of Parisian political gridlock.
Original Article
U.S. yields resume upward march while Eurozone finance ministers pressure Paris
Canadian dollar gains as oil rally, narrower yield gap support loonie
Euro limps toward fifth weekly loss as dollar pauses near 18-month highs
