US treasury yields surrender gains as oil drops

FXStreet (Mumbai) - The US treasury yields trimmed gains as oil prices fell into losses and are heading towards losses for the third straight day.

The benchmark 10-year yield now trade largely unchanged around 2.216%. The yield clocked a high of 2.231% earlier today. Meanwhile, the 2-year yield, which is more policy sensitive, trimmed gains from the high of 0.947% to trade around 0.931%.

The yield curve has flattened on account of the drop in the oil prices as traders sell short duration securities and buy long duration securities in anticipation of oil led drop in short-term inflation expectations.