2018.06.0419:54:00UTC+00Demand for Treasuries Slumps as Investors Look Past Trade Jitters

Stocks climbed on Monday, weakening demand for safe-haven assets such as Treasuries and drivin up yields as investors looked past heightened trade tensions to focus on solid jobs data-inspired gains at the end of the previous week.

The yield on the 10-year benchmark 10-year Treasury note advanced 4.4 basis points to 2.939 percent, while the two-year Treasury note yield edged up 3.8 basis points to 2.510 percent. The yield on the 30-year Treasury bond advanced 3.7 basis points to 3.083 percent.

U.S. equity markets ended up on Monday, with tech-heavy Nasdaq notching its first record close since March 12. Risky assets saw strong demand, benefiting from the impetus provided by the strengthening growth expectations after the May jobs data showed that the economy had added 223, 000 jobs during the month compared to the expected 200, 000 increase.

The data solidified expectations that the Federal Reserve will move to lift interest rates at least two more times in 2018 after its March rate hike, while increasing the odds of a third further rate hike back to around 40 percent, according to Fed funds futures.

In a week lacking high-level economic data, traders are now focused on the U.S. regulator. Recent speeches by Fed officials such as Fed Gov. Lael Brainard have helped to discourage speculation that policymakers may hold off on a fourth rate increase this year. According to Brainard said she would not slow down the rate of rate hikes based on a flattening yield curve which some have perceived as the bond market pricing in an economic slowdown.