The 10-year Treasury yield closed at 5.26% yesterday. That ties the June 12, 2007 close, the peak before the financial crisis.
One more basis point would be the highest close since May 17, 2002, the 10-year has traded above 5.25% only once since 2002.
The Long End Did the Work
The move came entirely from the back of the curve. The 2-year fell 3 basis points to 4.89%, and the 30-year rose 3 to 5.59%, Treasury data show.
That widened the 2s10s spread to 37 basis points from 32 on Monday. Short yields fell on soft data, but long yields climbed anyway.
That pattern points to rising term premium, not a faster Fed. Today's PCE shows whether the front end rejoins the selloff.
Consumers Blinked
The Conference Board's index fell to 81.9, its lowest reading since 2014. August job openings came in at 7.079 million, short of the 7.335 million consensus.
Those two prints line up with the 2-year's drop. They also raise the stakes for this morning's ADP report, where a weak number would extend the front-end rally.
Stocks Absorbed It, Unevenly
The S&P 500 slipped 0.16% to 7,671, after Monday's 0.77% drop erased September's gains. The Dow lost 0.25% and the Nasdaq 0.09%.
The quiet index hides a split month. Technology is up 4.4% in September.
Financials, REITs, consumer discretionary and materials are each down more than 6%. Those are the sectors most exposed to the borrowing costs above.
Today is the last session of the quarter. Rebalancing flows could distort the close more than any single data point.
Oil Eased, Gold Steadied
WTI settled at $89.38, down from $92.60 on Monday. Middle East exports rose to 12.8 million barrels a day in September, the highest since February, per Morgan Downey.
Cheaper crude weakens one inflation argument, yet the 30-year still climbed. That gap suggests the long end is pricing something beyond energy.
Gold rebounded about 1.5% to near $4,182, after a seven-week low of $4,111 Monday. EIA inventory data at 10:30 a.m. ET is the next oil test.
The Day Ahead
ADP private payrolls arrive at 8:15 a.m. ET. The forecast is about 49,000, against 38,000 last month.
At 8:30, August core PCE is forecast up 0.3% on the month and 3.4% on the year, up from 3.3%. A hot print would land on a 10-year already at a 19-year high.
The final Q2 GDP estimate arrives at the same time, forecast at 1.5% against 2.1% previously. Chicago PMI follows at 9:45, after 47.1 in August.
Fed Governor Lisa Cook and Chicago Fed President Austan Goolsbee speak later today. After yesterday's confidence print, their read on the consumer may matter as much as their read on inflation.
