The US 10yr hits 5%

• Long term yields continue to push higher on concerns around persistent energy inflation, with the US 10yr reaching 5%, levels not seen since the post financial crisis highs 19 years ago. A poor turnout at the 20yr auction added to the selling pressure.
• This comes ahead of the FOMC meeting tomorrow morning Sydney time, with around 90% priced for a hike. Attention will quickly turn to any guidance or commentary provided, and the dot plot for a read on where officials see rates heading from here, with the top of the curve resting at ~4.50%.
• Brent rose 2.7% to US$108.50/bbl and WTI 4.4% to US$105.83/bbl, with clarity still lacking on the extent of the disruption from the closure of Saudi Arabia’s East-West pipeline, which now looks likely to run longer than initially expected.
• The Australian 10yr is at 5.38% in line with those concerns, while at the short end futures are pricing around a 75% chance of an RBA hike at the end of the month.