US Treasuries maintained a bullish flattening trend, with long-dated bonds outperforming. A sharp drop in oil prices eased inflation worries and pushed breakeven inflation rates lower. A selloff in chip stocks dragged down equities, generating safe-haven buying that provided support for US Treasuries.
Just after 3pm New York time, long-dated yields fell by as much as 2 basis points but had clearly pulled back from their intraday lows; the 30-year breakeven inflation rate stood at approximately 2.21%, compared with around 2.23% at the open.
The long end outperformed other maturities, driving the 2s10s and 5s30s spreads narrower by 2.2 basis points and 1.2 basis points respectively, though both also moved off their session lows as afternoon buying in the long end partially faded.
WTI crude oil futures hovered near their daily low, down roughly 7.5% from Friday's close, marking the largest three-month decline, after Washington and Tehran signaled willingness to resolve their months-long conflict through negotiations.
US dollar investment-grade bond issuance was active, with Oracle leading a slate of 17 issuers bringing US investment-grade deals to market, targeting $27.9 billion in fundraising for the day.
As of 4:41pm New York time, the 2-year Treasury yield stood at 4.5771%; the 5-year Treasury yield was at 4.6896%; the 10-year Treasury yield was at 4.894%; and the 30-year Treasury yield was at 5.2762%. The spread between 2-year and 10-year Treasury yields narrowed to 31.48 basis points; the spread between 5-year and 30-year Treasury yields stood at 58.48 basis points.
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