Treasuries: US yields rise ahead of inflation, jobs data; oil dips

Skydance

29/09/2026 15:38

CME FedWatch shows traders price 68% chance of October Fed hike
August job openings fall to 7.08 million, below 7.23 million consensus
30-year Treasury yield touches highest level since mid-May 2004
By Sinéad Carew
Sept 29 (Reuters) - US Treasury yields were up slightly in a choppy session on Tuesday as oil prices took a step back and expectations for Federal Reserve interest rate increases steadied as investors waited for a key inflation reading and September's job market report.
Oil prices declined as investors focused on signs of recovering crude exports in the Middle East while officials said that US and Iranian officials spoke separately with mediators in a renewed effort to end seven months of war. 
On the economic data front, job openings for August fell to 7.08 million, below consensus expectations for 7.23 million and July's 7.34 million. Investors were waiting for Wednesday's final reading of August's Personal Consumption Expenditures (PCE), which is closely watched by the Fed. The inflation reading will be followed by September's nonfarm payrolls report on Friday.
Along with oil prices, Tom di Galoma, managing director at Mischler Financial, said that fixed-income investors were also watching the European bond market, where a selloff paused on Tuesday, although yields stayed close to their highest in years as robust growth and elevated energy costs are expected to push global interest rates higher. 
Traders are now pricing in a roughly 68% probability that the Fed will raise rates in October, up from 55% a week ago, according to the latest data from CME Group's FedWatch tool.
"Investors are looking at this and saying we've got some very decent levels to buy paper. There's enough things that are going on with AI and with stocks and geopolitical issues that accounts will be paid off by buying dips," di Galoma said, adding that investors are waiting on a lot of economic data and Fed speakers.
He also noted that heavy corporate supply was putting some pressure on the market after Paramount Skydance PSKY.O announced on Monday that it would offer $44.4 billion in notes.  
Later on Tuesday, Fed officials due to speak publicly include Michael Barr, Austan Goolsbee, Alberto Musalem and Christopher Waller. 
The yield on benchmark US 10-year notes US10YT=RR rose 0.9 basis points to 5.251%, after touching a high of 5.2678% and a low of 5.2047%.
The 30-year bond US30YT=RR yield rose 1.63 basis points to 5.5783%, touching its highest level since mid-May 2004. 
The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 0.44 basis points to 4.928% after earlier hitting 4.9596%, its highest level since late May 2024.
A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=RR, seen as an indicator of economic expectations, was at a positive 32.1 basis points. 

(Reporting by Sinead Carew; Editing by Will Dunham)
((sinead.carew@thomsonreuters.com))