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Treasury yields ignore Fed minutes, track oil higher

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 17, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    The rising caution at the Federal Reserve amid global turmoil showed by the Fed minutes failed to weigh over treasury yields, which continue to follow oil prices higher.

    A minor dip from the daily highs following the minutes release was quickly undone. At the time of writing, the 10-yr yield traded more than six basis points higher at 1.84%. The 2-year yield, which mimics short-term rate hike bets, was up more than 3.5 basis points at 0.758%.

    Fed minutes showed policymakers are concerned about the rising downside risks to the US economy, but are still expect inflation to rise to 2% over the medium term. Policymakers also cheered labor market strength.

    Furthermore, oil prices are up more than 6% on increased possibility of a OPEC and non-OPEC production freeze. Consequently, treasury yields remained resilient as continues recovery in oil prices could push up inflation expectations.
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