Treasury Yields Rise As Curve Inversion Narrows

The 10-year Treasury yield keeps rising faster than the two-year, narrowing the inverted gap that many see as an indication of recession fears. Ahead of July’s payrolls data, the 10-year gains 0.111 percentage point to 4.188%, the highest since early November, and the two-year inches up 0.005 pp to 4.894%. The 0.706 pp spread is the narrowest since May. But the 10-year rally could be ending, Spartan’s Peter Cardillo says in a note. “Further good inflation news on the labor front tomorrow, and next week’s CPI and PPI will likely reverse this upward trend with a big bond market rally.”