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US Treasury yields rise after consumer prices post biggest annual gain in 6 years

Thomas Franck

U.S. government debt yields rose Thursday morning after the Department of Labor reported that consumer prices posted their largest annualized gain in more than six years.

The government said Thursday that its Consumer Price Index inched up 0.1 percent as gasoline price increases cooled off and apparel prices slipped, pushing the annualized increase to 2.9 percent, the biggest gain since February 2012.

So-called core CPI, which excludes volatile food and energy components, rose 0.2 percent, matching its gain in May; the annualized increase in core CPI rose to 2.3 percent.

The yield on the benchmark 10-year Treasury note , which moves inversely to price, was higher at around 2.869 percent, while the yield on the 30-year Treasury bond was also higher at 2.966 percent.

Elsewhere, in oil markets, Brent crude traded at around $74.90 a barrel on Thursday morning, up 2 percent, while U.S. crude stood at $70.96 a barrel, up 0.84 percent.

Oil markets recovered some ground following sharp losses in the previous session after Libya said it would resume exports. The rally received an extra boost Thursday morning when the International Energy Agency (IEA) warned the world’s spare oil capacity could soon be “stretched to the limit.”

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