US Treasury yields rise as dollar weakens in European trade amid oil surge and rate hike bets

The bond market opened the week doing what it does best: making everyone nervous. The benchmark 10-year US Treasury yield rose 2.4 basis points to 4.808% in early European trading on September 8, while the dollar index moved in the opposite direction, weakening despite the yield bump. That divergence, yields up but the dollar down, tells a story about shifting confidence in the broader economic picture. Meanwhile, Brent crude climbed 2.2% to $99.10 per barrel, flirting with the psychologically important $100 level as geopolitical friction between the US and Iran continued to heat up. A packed week for rate decisions Two major central bank events loom over markets. The European Central Bank meets on September 10, where it is widely expected to raise its deposit rate by 25 basis points to 2.50%. Just days later, on September 16, the Federal Reserve takes its turn, and futures markets are pricing in a 59% probability of another rate hike. The 10-year German Bund yield also ticked higher, rising 1.2 basis points to 3.393%. Yields have remained near their highest levels since January 2025, a stretch of more than 18 months at elevated borrowing costs. For context, the 10-year yield spent...