(Bloomberg) -- Treasuries fell after reports suggesting the Middle East war is heating up lifted oil prices.
The selloff lifted yields across maturities to session highs, with short-term tenors rising most. The two-year note’s climbed as much as five basis points to 4.83%, the highest level in a week. The US dollar strengthened.
After having been moribund for much of the session, Treasuries were hit at around 2:45 p.m. New York time, concurrently with US stock indexes, as West Texas Intermediate crude oil futures jumped to about $98.50 a barrel from $97.
The move appeared to have been touched off by a Reuters report that the US — which started a war with Iran in February — was preparing to order some staff to leave embassies in the Persian Gulf. It faded after US officials said the order was limited to Saudi Arabia.
“The Iran risk has never really gone away fully,” said John Briggs, head of US rates strategy at Natixis North America. “If concerns over re-escalation return, then global yields in general could face renewed pressure due to inflation risks and central bank pricing potentially rising.”