U.S. government debt prices were lower on Monday morning even as global stock prices rebounded.
The yield on the benchmark 10-year Treasury notes was higher at around 2.8857 percent at 3:59 a.m. ET, while the yield on the 30-year Treasury bond was higher at 3.194 percent. Bond yields move inversely to prices.
Earlier Monday, the 10-year Treasury yield rose to a new four-year high at 2.902 percent, as concerns over inflation continued. Traders are waiting for new consumer price data coming Wednesday, but fears that inflation numbers might creep up faster-than-expected were affecting the bond market Monday.
Jitters in the bond market were transposed to stock markets last week, which had one of its worst weeks in years.
Robin Griffiths, chief technical strategist at ECU Group, told CNBC on Monday that inflation fears and thus the current state of the bond market are not offering investors the safe option that they usually have when stock prices come down.
“In normal rotation from bull to bear, you’d go straight into government bonds, but this is the problem. With interest rates going up, because the economy is strong and inflation is picking up, government bonds have become not the safest asset class in the planet but toxic waste,” he said.
“So, by relative comparison you’re sort of trapped into equities even though you know they are not good value,” he added.
Meanwhile, in data news, federal budget numbers are due out at 9 a.m. ET and the White House is due to outline a new infrastructure plan.
In auctions, the U.S. Treasury is expected to sell $90 billion in 13 and 26-week bills.