FX.co ★ Treasury Yields Edge Higher

The yield on the US 10-year Treasury note rose to 4.50% on Tuesday, its highest level in two weeks, as a renewed climb in oil prices stoked inflation concerns. Crude gained more than 1% after an LNG carrier was struck by a projectile while exiting the Strait of Hormuz, highlighting the fragility of security in the Middle East and the associated risks to global energy supplies. The rebound in oil prices modestly increased expectations that the Federal Reserve could raise interest rates, with market-implied odds of a hike as early as September climbing to about 58%, up from 56% the previous day. Investors now await Wednesday’s release of the FOMC meeting minutes for additional insight into the Fed’s policy outlook, following the central bank’s more hawkish tone at its June meeting.