Surging Oil Prices May Finally Break The Bond Market

The 10-year Treasury yield is approaching key resistance at 4.5%–4.6% as surging oil prices rekindle upward momentum in the long end; a breakout could target cycle highs near 5%. This renewed move threatens a multi-year trading-range breakout, likely pressuring fixed income, raising borrowing costs and adding upside inflationary pressure via higher energy prices.

Analysis

The 10-year Treasury yield is approaching key resistance at 4.5%–4.6% as surging oil prices rekindle upward momentum in the long end; a breakout could target cycle highs near 5%. This renewed move threatens a multi-year trading-range breakout, likely pressuring fixed income, raising borrowing costs and adding upside inflationary pressure via higher energy prices.