US Treasury yields climbed to their highest levels in more than two decades on Monday as investors assessed fresh economic data and awaited minutes from the Federal Reserve’s September meeting.
Oil prices fell as Middle Eastern crude exports increased and G7 countries pledged to boost supplies, although geopolitical risks continued to limit the decline.
Gold prices edged lower as a stronger dollar and elevated Treasury yields offset reduced expectations of a Federal Reserve rate hike this month.
Bitcoin remained near recent highs after entering October with gains, although technical indicators pointed to cooling short-term momentum.
Treasury yields hit more than two-decade highs
The benchmark 10-year Treasury yield rose 9 basis points to 5.349%, its highest level since April 2002, while the 30-year yield rose more than seven basis points to 5.703%, its highest since May 2002.
The moves came after the Institute for Supply Management reported that its services Purchasing Managers’ Index rose to 54.9 in September.
The reading was broadly in line with expectations but slightly below the August rate of growth.
The prices component of the services ISM increased 1.4 points to 74, lifting its 12-month average to the highest level since March 2023.
Investors are now focused on minutes from the Fed’s September policy meeting, due Wednesday.
A weaker-than-expected September jobs report had recently reduced expectations for another rate increase at the October meeting.
Traders were pricing in an almost 82% probability that the Fed would leave rates unchanged at its next meeting, according to the CME FedWatch tool.
Oil prices fall as supply outlook improves
Brent crude futures settled 2.36%, lower at $99.84 a barrel, while US West Texas Intermediate crude fell 2.41%, to $88.91.
The decline came as Middle Eastern crude exports rose above pre-war levels on four of the seven days in the final week of September, according to shipping data.
The G7 also agreed to release 100 million barrels of diesel and crude from emergency reserves and pledged to avoid energy export restrictions.
However, uncertainty remained over how much of the pledged supply would come from the International Energy Agency-coordinated 400 million-barrel emergency release announced in March.
The broader supply backdrop remained tight. Saudi Aramco CEO Amin Nasser said crude and refined fuel supplies could remain stretched, with global stockpiles potentially taking two years to replenish after emergency withdrawals.
US Strategic Petroleum Reserve inventories fell to 283 million barrels last week, the lowest level since October 1982.
Gold gains as October Fed hike bets fall
Spot gold was up 0.02% at $4,143.31 an ounce, while US gold futures for December delivery settled 0.17% higher at $4,169.70.
The stronger US dollar and elevated Treasury yields weighed on the precious metal.
Higher interest rates can reduce the appeal of non-yielding assets such as gold, although the metal can also act as an inflation hedge.
Expectations for a Fed rate hike in October declined following weaker US employment data.
Traders were pricing a 22% probability of an October increase, compared with about 70% a week earlier. The probability of a December increase remained at 84%.
Metals Focus expects gold to reach new record highs in 2027 and forecasts an average price of $5,330 an ounce next year.
Bitcoin consolidates near recent highs
Bitcoin was up 0.2% in the last 24 hours and was trading near $85,680.
The cryptocurrency was consolidating near recent highs, although its technical setup showed weaker short-term momentum.
An RSI reading around 41 and a MACD below its signal and zero lines indicated that momentum had cooled.
Bitcoin’s broader backdrop remained supported by corporate treasury activity.
Strategy bought 334 BTC for $28.7 million, while Metaplanet increased its holdings to 44,000 BTC after adding 1,000 BTC during the third quarter.
Bitcoin ETF flows also remained positive, with $164.22 million of net inflows over one day and $226.41 million over seven days, according to CoinGlass data.
The market-implied year-end high on Kalshi rose to $95,000, while Bitcoin could potentially test $90,000 if the current positive setup continues.
Meanwhile, proposed CFTC crypto market rules could provide a clearer federal framework for Bitcoin, Ethereum and registered crypto exchanges.
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