U.S. and Eurozone government debt sold off as traders factored in the prospect of tougher sanctions on Russia and comments from a senior Federal Reserve policymaker who signaled that the central bank would act more aggressively to curb inflation.
The yield on the 10-year US Treasury note, which moves inversely to its price and is a benchmark for borrowing costs around the world, rose 0.16 percentage points to 2.56%, its highest level since May 2019. The yield on the two-year note jumped 0.11 percentage points to 2.53 percent.
The U.S. selloff was exacerbated by comments from Federal Reserve Governor Lael Brainard, who said on Tuesday she expected the central bank to begin a “rapid” reduction in its balance sheet to tighten its grip. Politics.
The German 10-year Bund rose 0.11 percentage points to 0.61%, and the equivalent Italian bond yield rose 0.19 percentage points to 2.26%. The UK 10-year gilt yield rose 0.11 percentage points to 1.65%.
Brussels has said it is ready to launch a fifth sanctions package against Russia, which would include a ban on coal imports from the country. Restrictions on oil imports are being considered, although they are not expected to be included in this week’s package.
On Monday, the United States and France had called for a significant escalation of punitive measures against Russia, following reports of atrocities committed by its forces in Ukraine.
Coal futures for April rose 15% on Tuesday to $296 a tonne. Oil prices were down slightly, with Brent, the international benchmark, down 0.83% at $106.64 a barrel.
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