- The 30-year Treasury bond yield ended the week at 5.17%
- Weekly initial unemployment claims were 187,000 for the week ended July 18th
- Brent crude oil reached $100 per barrel last week
Top Three Market Headlines
U.S. Treasury Yields Jump: Yields on U.S. Treasury bonds rose last week amid rising expectations that the Federal Reserve will soon boost its policy interest rate. The yield on the 2-year Treasury bond, most sensitive to Federal Reserve policy expectations, rose during the week from 4.18% to 4.33%. At week's end, markets were pricing in a roughly 35% chance the Fed will hike its federal funds rate target at its meeting this week, up from 13% one week prior. Meanwhile, the bellwether 10-year Treasury bond yield increased from 4.55% to 4.68%, an 18- month high, while the 30-year Treasury bond yield rose from 5.07% to 5.17%, its highest level in nearly 20 years.
Weekly Unemployment Claims Lowest in Decades: The Department of Labor reported last week that initial claims for state unemployment benefits in the U.S. totaled 187,000 for the week ended July 18th, a decline of 22,000 from the preceding week and well below expectations of 212,000. Notably, this was the lowest level of new weekly applications since September 1969. While the report signals continued stability in the labor market, analysts noted that the sharp drop could be due in part to seasonal quirks associated with the summer months.
Oil Prices Jump Again on Renewed Mideast Tensions: The price of Brent crude oil, the international oil price benchmark, surpassed $100 per barrel in futures markets last Thursday for the first time since May following renewed geopolitical tensions in the Middle East. Prices subsequently eased on Friday but still rose more than 4% on the week, the third straight weekly increase. After settling at a four-month low of $71.57 on July 1st in the aftermath of the initial ceasefire between the U.S. and Iran, the benchmark has risen nearly 30%.