Ten-Year Yield Spikes To Highest Level In Over Twelve Years

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After a modest pullback to start the session, treasuries saw further downside over the course of the trading day on Monday.

Bond prices slid more firmly into negative territory as the day progressed, closing sharply lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, skyrocketed 18.1 basis points to 3.878 percent.

With the substantial increase on the day, the ten-year yield ended the session at its closing level since April 2010.

The sharp pullback by treasuries came amid continued strength in the value of the U.S. dollar, with the greenback hitting a record high versus the British pound.

Aggressive interest rate hikes by the Federal Reserve continue to contribute to the increase by the dollar along with Britain's new chancellor Kwasi Kwarteng's announcement of a sweeping package of tax cuts.

The U.S. dollar's continued strength suggests the currency is the preferred safe-haven asset, reducing the appeal of bonds.

Concerns about the outlook for interest rates also weighed on treasuries, as the Federal Reserve and other central banks have indicated they plan to continue raising rates in an effort to combat stubbornly elevated inflation.

Reports on durable goods orders, consumer confidence and new home sales are likely to attract attention on Tuesday along with remarks by Fed Chair Jerome Powell.

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